Republic v Kum Kee [1999] KIHC 32; HCCrC 14.98 (8 June 1999)

IN THE HIGH COURT OF KIRIBATI
(BEFORE THE HON R LUSSICK C.J.)

HCCrC 14/98

THE REPUBLIC

versus

JOHNNY MOSI KUM KEE

Mr D James for the Republic
Mr B Berina for the Accused

Date of Hearing: 31 May, 1, 2, 3 June 1999

JUDGMENT

The accused, Johnny Mosi Kum Kee, has pleaded not guilty to the following charges under the Customs Act 1993:

Count 1

Statement of Offence

FRAUDULENT EVASION OF IMPORT CUSTOM DUTIES contrary to section 134(2)(f) of the Customs Act 1993

Particulars of Offence

JOHNNY MOSI KUM KEE on or about 3 May 1995 was knowingly concerned in a fraudulent evasion of import customs duties at Betio.

Count 2

Statement of Offence

FRAUDULENT EVASION OF IMPORT CUSTOM DUTIES contrary to section 134(2)(f) of the Customs Act 1993.

Particulars of Offence

JOHNNY MOSI KUM KEE on or about 27 June 1995 was knowingly concerned in a fraudulent evasion of import customs duties at Betio.

Count 3

Statement of Offence

BRIBERY contrary to section 140(1)(d)(i) of the Customs Act 1993.

Particulars of Offence

JOHNNY MOSI KUM KEE on or about 27 June 1995 offered reward in the form of Radio/Cassette player, a push bike and two single mattresses to custom officer Teraakau Tii to induce neglect of the said officer's duty.

Count 4

Statement of Offence

BRIBERY contrary to section 140(1)(d)(i) of the Customs Act 1993.

Particulars of Offence

JOHNNY MOSI KUM KEE on or about 27 June 1995 promised to give a reward namely a saloon car to custom officer Teraakau Tii to induce neglect of the said Officer's duty.

The prosecution alleges that the accused bribed a customs officer, Terakau Tii, to arrange for the clearance of two shipments of beer, one of which was released on 3 May 1995 (2,000 cartons) and the other on 27 June 1995 (2,060 cartons), without paying any customs duty. The evidence was that the duty payable on the first shipment was $25,200 and on the second shipment $25,956.

Six witnesses were called by the prosecution to prove its case.

The first was Takirua Taabu, a customs officer of 16 years standing whose duties include auditing and investigation. He obtained the copy of the bill of entry for each shipment which was used to release the cargo. The procedure is that the importer must file 5 copies of a bill of entry. The original and duplicate go to the customs cashier, one copy goes to the statistical section and two copies go to the importer, who uses one copy to clear the goods from the shipping service and retains the other.

The witness testified that both bills of entry (exhibits B1 and E1) showed the importer as JMKK Enterprises, which he understood to be the accused, Johnny Mosi Kum Kee. The witness knows him and used to see him come to the Customs office about twice a month to take out his cargo. Each bill of entry bears the signature of the importer or agent, the signature of the examining officer who certifies that all entries in the document are correct, and a cashier's stamp and signature to show that the duty has been paid. The witness said that in both cases he recognised the signature of the person who had signed as cashier to be that of Teraakau Tii

Endorsed on each document was a handwritten bill of entry number and receipt number. The witness testified that he checked both bill of entry numbers in the register and found that they referred to entirely different importers and cargoes (copies of the two register pages are exhibits C and F). Similarly, he looked up the receipt numbers in the receipt book and found that those receipts had nothing to do with the cargoes in question. In either case, no genuine cashier's record or bill of entry record could be found relating to the subject cargo and no customs duty had been paid.

The witness continued that, in company with Detective Corporal Tewatana Merang, he spoke to Teraakau Tii and took into custody from him a pushbike, a stereo set and two mattresses. Again accompanied by Detective Corporal Tewatana, he spoke to the accused outside his store. He said that he told the accused that he wished to ask him some questions about the goods he had taken out, but the accused was not prepared to talk to him.

The next prosecution witness was Detective Corporal Tewatana Merang of the Kiribati Police. He testified that he worked with the previous witness to investigate the matter now before the Court. He knows the accused as a businessman who imports cargo from overseas and sells it at his store at Temakin. He said that the name "JMKK Enterprises Ltd" refers to Johnny Mosi Kum Kee. He searched the company register and found that the accused was the managing director and, as at 1996, owned 499 of the 500 shares issued. On 15 November 1995 he went with the previous witness to the place of business of the accused and asked him to accompany them to the customs office to record his statement. The accused told him that he was not prepared to give a statement and the witness made a note to that effect which the accused signed.

The witness said that he then went with a warrant to the Bank of Kiribati to inspect the company's account for the period 1.5.95 to 26.6.95. There were no withdrawals corresponding to the amount of customs duty payable on the beer which had been released.

The witness also interviewed Teraakau Tii and took into custody 2 single mattresses, a stereo system and a speed bike. Those items have been placed in a warehouse and can be produced if required.

The third prosecution witness was Nei Benebene Teburea who, in 1995, was employed with Kiribati Shipping Services Ltd as a cashier. She knows the accused as a businessman and in 1995 she sometimes saw him in her job as cashier when he came to clear his cargo.

She gave evidence that on 3 May 1995 the accused presented a document bearing bill of entry no. 1101. She wrote that number in the cash receipts book together with the words "JMKK port charges" and accepted a cheque for $350 from the accused in payment of the port charges (copy of that page of the cash receipts book is exhibit G). On 27 June 1995 the accused presented another document bearing bill of entry number 1652 and the witness wrote up a payment of $410 for port charges (copy of page of cash receipts book is exhibit H).

The fourth witness for the prosecution was Teraakau Tii, a customs officer. He gave evidence that he has known the accused for about 10 years and had performed services on his goods ever since becoming a customs officer in 1990 or 1991.

He testified that in 1995 the accused telephoned him at his house and asked him to take out a container of beer at the wharf for him. The witness went to the accused's home and was told by the accused that if the container of beer was released he would receive some things in payment. He told the accused to make out his bill of entry and the accused later delivered it to him at his office. Although 5 copies were required, the accused gave him only 2 copies, as no duty was going to be paid.

According to the witness, when he received the bill of entry from the accused it had already been filled out and the figures for the duty, value and import levy had already been entered. The witness stamped and signed the document as cashier, although it was not his duty to do so. The witness also wrote in a bill of entry number and receipt number. These numbers were fictitious and were written in so that there would be no problem taking out the cargo. He identified exhibit B1 as the document he was referring to. He said that he also stamped the attached bill of lading (exhibit B2) and wrote on it "OK to release". Otherwise the cargo could not have been taken out. He gave the 2 copies of the bill of entry back to the accused, who then went to release his cargo. In return, he received a pushbike, a mattress and a sound system which were dropped off at his house by employees of the accused.

The witness said that there was a second occasion when the accused telephoned him and he went to his shop, where the accused asked his assistance with another container of beer. This time the accused told him that he had ordered a car for him from overseas. The accused filled out another bill of entry and gave it to the witness who wrote on it a fictitious bill of entry number and receipt number and stamped and signed it as cashier. Again, only 2 copies were filled out and no duty was paid. The witness also stamped and signed the attached bill of lading. He delivered the 2 completed documents to the accused at his store and the accused told him to wait for the delivery of his saloon car. The accused used the documents to clear his cargo. The car never arrived. Some time later, the witness reported the matter to Customs. The witness identified copies of the bill of entry and bill of lading, both stamped with the date 27 June 1995, as copies of the documents he was referring to (exhibit E1 and E2).

The fifth witness for the prosecution was Etita Mareko, a cashier with Kiribati Customs, a position she held in 1995. She knows the accused and remembers him from 1995 when he used to come to pay his customs duty, although sometimes his employees would come.

She testified that she checked receipt no. 843088 and found that it did not correspond with bill of entry no. 1101 as written on exhibit B1, but was payment of $1 for an entry form received from a person named Bong. She also checked receipt no. 852801 shown on exhibit E1 as being for bill of entry no. 1652. She found that the receipt was for a payment of just over $8,000 made by JMKK, but it concerned another order and not bill of entry no. 1652.

The sixth and last witness for the prosecution was Susan Tabutoa, an examining officer with Kiribati Customs. She swore that she did not sign either of the bills of entry exhibits B1 and E1 as examining officer. She said that the signatures appear to be similar to hers but that they are both forgeries.

At the close of the case for the prosecution I found that a prima facie case had been established. In accordance with section 256 of the Criminal Procedure Code Cap. 17, I explained to the accused the options open to him. He elected to remain silent and to call no evidence.

Before considering the evidence I must direct myself that the burden of proof beyond reasonable doubt remains upon the prosecution from first to last. The prosecution must prove the charge and each element of the charge beyond a reasonable doubt and if it fails to do so then the accused is entitled to be acquitted. There is never any onus on the accused to prove his innocence.

I must also warn myself that the witness Teraakau Tii was clearly an accomplice of the accused and that, although I may convict on his evidence, it is dangerous to do so unless it is corroborated.

In order to discharge the burden of proof to the required standard in respect of Counts 1 and 2, the prosecution must establish:

(i) that import customs duties have been evaded;

(ii) that such evasion was fraudulent; and

(iii) that the accused was knowingly concerned in such evasion.

In respect of Counts 3 and 4, the prosecution must establish that:

(i) the accused offered or promised a reward

(ii) to a customs officer

(iii) for the purpose of inducing that officer to neglect his duty.

The evidence of the prosecution witnesses Takirua Taabu, Teraakau Tii and Etita Mareko clearly establishes that two bills of entry were falsified to misrepresent that customs duty had been paid on the cargoes described therein, as a consequence of which the said cargoes were released from Customs without any such duty having been paid. The evidence of those witnesses was not challenged on that point, nor does counsel for the accused dispute it.

Fraudulent evasion of import customs duty has thus been proved beyond reasonable doubt in respect of Counts 1 and 2.

The remaining question is whether the accused was knowingly concerned in such evasion.

Against the accused on this issue is the evidence that he did not, and has not, paid the import duty, even though the goods were released to him. The two shipments in question were large enough to attract duty amounting to over $50,000. It would be impossible to believe that any businessman would not have been aware from the very beginning that such a large amount of duty had not been paid. In such circumstances, it would be reasonable to expect an importer who was not himself involved in any criminal activity, having obtained the goods without paying any customs duty, to take immediate steps to rectify the situation. A reasonable first step would be to enquire into how the goods came to be released without any duty being paid, and the next step would be to pay the duty. On the evidence, it cannot be said that the accused did anything at all in that direction, even after having been spoken to by the police. His behaviour leads to the conclusion that his intention in taking possession of the goods without paying duty was to evade duty.

Then there is the evidence of the witness Teraakau Tii which, if accepted, leaves no doubt at all that that the accused was not only knowingly involved in the fraudulent evasion of import customs duty but was also guilty of bribery as charged.

A number of arguments were put forward on behalf of the accused as to why this witness should not be believed.

First, it was argued that Teraakau made a report involving the accused to save himself from punishment after he had failed to burn down the Customs building, which contained incriminating documents. Teraakau's evidence was that the idea to burn down the Customs building came from the accused himself. Teraakau said that he had visited the accused to ask him to pay the customs duty. The accused had promised to pay but never did. Instead, he told Teraakau he was going to burn down the Customs office to destroy the records. According to Teraakau, that was how he got the idea. However, there was no evidence that he actually tried to burn down the building. Therefore it cannot be said that his decision to report the accused resulted from his failure to burn down the building. The reason Teraakau gave for reporting the accused was that he knew that what had been done was wrong. That evidence was not contradicted.

It was also argued for the accused that Teraakau had been told that if he blamed the accused he would retain his job. The question was put to Teraakau and his answer was that he could not remember being told that. That was the only evidence on the point and it is not sufficient to entitle a court to find that Teraakau's evidence had been tainted by the motive suggested.

Another argument for the accused was that Teraakau falsified the documents not because of anything the accused had said but just as a test case to see if he could obtain the release of the goods, with the idea of asking the accused for a reward if it could be done. The basis for this argument is a statement which Teraakau had given to the police (exhibit I) in which he said: "I confirm that what I have done was unprocedural but the reason being that I wanted to see whether or not his cargoes can be released from the Shipping". I do not consider that such a statement can be used to throw doubt on Teraakau's reasons for clearing the cargoes. In his evidence, he made it very clear more than once that the reason he had wanted to see whether that accused's cargoes could be released was that the accused had promised to give him things if it were done. When cross-examined, he did not agree to any other reason that was put to him and there was no evidence of any other reason.

It was also submitted for the accused that no adverse inference can be drawn from the fact that he had not offered to pay the duty because there was evidence to say that where Customs discovers a mistake has been made whereby lesser duty or no duty was paid, the mistake is rectified by notifying the person who has to pay. This submission is entirely without foundation as there was no evidence at all of a mistake having been made in the present case.

Another argument for the accused was that there was a possibility on the evidence that others were to blame. Counsel for the accused seeks support for this argument from the evidence of the last two prosecution witnesses, both of whom agreed that, on occasions, employees of the accused's company would come to pay the duty rather than the accused himself.

It was put to the Court that the last witness, Susan Tabutoa, had in fact signed both bills of entry as examining officer but had denied doing so because it might point to the involvement of others rather than the accused. However, when this was put to her in cross-examination she was adamant that she had not signed the documents exhibits B1 and E1. She gave an example of her signature (exhibit 1) and documents bearing her authenticated signature (exhibits K and 2) were compared with her signatures on exhibits B1 and E1. All were similar, and one would expect forgeries to be similar, but no two signatures were exactly the same. There was no other evidence on the issue. I accept her sworn evidence and find that she did not sign the documents in question.

In my view, the evidence that other employees sometimes paid the duty was not sufficient reason for me to reject or doubt all of the other evidence.

The accused does not deny that he gave to Teraakau the items alleged (i.e. a stereo system, push bike and two mattresses) but his counsel argues that this was because he was obliged to do so after Teraakau had asked for them under the Kiribati custom of bubuti. This proposition was put to Teraakau in cross-examination and he flatly denied it. That is where the evidence rested, and the argument is thus unsubstantiated.

It was also put to Teraakau in cross-examination that the accused had told him that he would pay the duty if he were given a debit note. This was also denied by Teraakau and there was no other evidence which would entitle a court to make a finding in favour of the accused on the issue.

It is trite law to say that the accused is not obliged to give evidence, and the fact that he has not done so proves nothing, one way or the other. It neither establishes his guilt nor does it rebut or contradict the prosecution evidence. Of course, rebuttals may be obtained from concessions made in the cross-examination of prosecution witnesses, but that did not happen in the present case. It should be made clear, however, that the accused's failure to give evidence has no bearing on the credibility of Teraakau as an accomplice, nor does it amount to corroboration of his evidence.

As regards the evidence of Teraakau, it is true, as submitted by counsel for the accused, that cross-examination brought out some inconsistencies. It was clear that he did not have a good memory for incidental matters such as dates and procedures, and he was very easily confused. However, although he was cross-examined at considerable length, he could not be shaken on his evidence that his reasons for falsifying the documents were because the accused had promised him the rewards he had mentioned. What he told the court was substantially what he had told the police 4 years ago. There was other evidence to confirm that the goods had been released to the accused by the use of falsified documents, that no duty had been paid, and that the accused had given him the gifts he had described. I was satisfied beyond a reasonable doubt that when Teraakau testified as to his motives for preparing the false documents and the promises made to him by the accused, he was telling the truth.

In fact, I had no reason to doubt the testimony of any of the prosecution witnesses. Looking at the whole of the evidence, I find that the prosecution have proved all four of the charges against the accused beyond a reasonable doubt. He is therefore found guilty as charged of 2 counts of fraudulent evasion of import customs duties contrary to section 134(2)(f) and 2 counts of bribery contrary to section 140(1)(d)(i) of the Customs Act 1993 and he is convicted accordingly.

THE HON R B LUSSICK
CHIEF JUSTICE
(08/06/99)

SENTENCE

The offences must be regarded as serious. Fraudulent evasion of import customs duties was committed on a grand scale after the accused had corrupted a customs officer to neglect his duty. The duties evaded amounted to more than $50,000, a large amount in any country but, in Kiribati, a fortune.

The penalty for the offence of bribery is prescribed by section 140(2)(d) of the Customs Act 1993 as a fine of $5,000 or imprisonment for not more than 5 years.

For an offence of fraudulent evasion of customs duty, section 134(8) prescribes a fine not exceeding $5,000 or imprisonment for a term not exceeding 24 months or both. However, the fine is increased by subsection (10) in cases such as the present where the value of goods involved in the offence is higher than the amount of $5,000 referred to in subsection (8). In such a case, a fine not exceeding three times the value of the said goods shall apply.

In respect of Count 1, I have before me a certificate under section 133(9) certifying the value of the goods to be $22,700. In respect of Count 2, a similar certificate certifies the value of the goods to be $25,000. So that the accused is liable in respect of Count 1 to a fine of $68,100, and in respect of Count 2 to a fine of $75,000.

There are also the two offences of bribery to be considered. In the case of R v. Weerasinghe (HCCrC 5/95) the High Court emphasised the seriousness of offences of that nature. The case of R. v. Ozdemir (1989) 7 CR.App.R. (s) 382 was cited, where the Court of Criminal Appeal stated: "We wish to make it clear that corruption is always a serious offence and will lead almost inevitably to a custodial sentence".

The accused's prior criminal history certainly goes against him. The record shows that on 5.8.94 he was convicted of the offence of fraudulent evasion of customs duties and was fined $10,000. On that occasion he was warned by the High Court that he would go to prison the next time he tried to cheat Customs.

The accused obviously ignored that warning by the High Court because 9 months later he became involved in the present serious offences.

I think therefore that in the present case a period of imprisonment is inescapable.

The accused is aged 30 and has a business that he started in 1992. He is married and has 3 young children. I am told that he is a diabetic with kidney complications and was due to leave for treatment in Australia on 1 July 1999. If that is true (and I have seen no evidence in support of it) then it will be the responsibility of the prison authorities to ensure he receives any necessary treatment. The accused is also a Member of Parliament. Being sentenced to prison will probably cause him to lose his seat. That is perhaps a form of punishment in itself. Nevertheless, all citizens are equal before the law and the fact that the accused is a Member of Parliament does not earn him any special consideration. I also realise that a term of imprisonment is likely to cause some hardship to his family. That is to be regretted but is one of the prices to be paid for committing a crime, and it is not a mitigating factor.

Taking everything into account, the accused is sentenced as follows:

As regards the two offences of bribery, he is convicted and sentenced to imprisonment for one year on each offence.

As regards the two offences of fraudulent evasion of import customs duty (Counts 1 and 2), on Count 1 the accused is convicted and fined $68,100 to be paid forthwith in default 1 year'' imprisonment. On Count 2 the accused is convicted and fined $75,000 to be paid forthwith in default 1 year's imprisonment.

I add the following for the avoidance of any possible doubt. All sentences are to be served cumulatively. Thus if neither fine is paid the accused will spend 4 years in prison. If one fine is paid then the period of imprisonment in default will be terminated and the accused will serve 3 years in prison. If both fines are paid then the period to be served will be 2 years.

THE HON R B LUSSICK
CHIEF JUSTICE
(08/06/99)