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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
CR NO 872 OF 2011
THE STATE
-V-
ACHILLES JAMES PENI
(No 2)
Waigani: Kawi-iu, AJ
2013: September 23, 24, 25, 26, 27, 30
October 3, 4, 8, 16, 30, 29
November 29; December 19
2014: 27th March
CRIMINAL LAW- Sentence - Misappropriation of property - Dishonestly applies property belonging to another - money paid by Government for specific projects - Money misappropriated large K2.7 million – Offence prevalent – Consideration of sentence – Interest of victim considered – Sentence suspended with orders for full restitution – S. 19 CCA, ss. 16, 22 Probation Act.
Cases Cited:
The State v Ao (No. 2) [2002] N2247
The State v Gibson Haulai [2004] N2555
State v Shirley Tainoli (24/11/2004)
The State v Daniel Mapiria, CR 1118 of 2000
The State v Imoi Maino [2002] N2773 Cr No 340 of 2003
The State v Jimmy Kendi (No 2) [2007] N3131
The State v Moko Essi Kom CR No 114 of 2008
The State v Iori Veraga [2005] N292
Public Prosecutor v Don Hale (1998) SC 564
Edmund Gima and Siune Arnold v The State (2003) SC730
Richard Liri v The State (2007) SC883
Counsel:
Ravunama Auka, for the State
E. Sasingen, for Prisoner
JUDGMENT ON SENTENCE
27th March, 2014
1. KAWI-IU, AJ: The prisoner was charged with one count of misappropriation in which it was alleged that he between the 01st of December 2008 and 31st December 2009, dishonestly applied to his own use and to the use of others, monies in the sum of Two Million Seven Hundred Thousand Kina (K2,700,000.00), property belonging to the Autonomous Region of Bougainville Government, contrary to s.383A (1) (a) (2) (d) of the Criminal Code Act.
2. The allegations of facts put to the accused for purposes of arraignment were these.
3. Mr Laimo made submissions for 10 feeder roads for some K4.1 million kina approved for South Bougainville feeder roads. When he lost his parliament seat in 2007 General Election the Regional Member for Bougainville learnt of this fact. He then sought approval for diversion of the funds to other projects.
4. So it was approved by Department of National Planning and a sum of K4.1 million kina was sent to Bougainville Treasury.
5. On the 1st August 2008, Mr Peni submitted a technical proposal on behalf of his company, Millennium Water Ltd to the Regional Member for Bougainville, Hon. Fidelis Semoso MP, showing his expression of interest for project to construct water treatment and supply for Buka General Hospital.
6. On the 13th December 2008, Millennium Water Ltd submitted an invoice number 164/08 for K2.7 million to Bougainville District Administration Treasury Office.
7. On the 30th December 2008, the cheque No. 172728 for K2.7 million kina was deposited into Millennium Water Ltd Account No. 1000876763, Bank South Pacific, Waigani Drive Branch, National Capital District.
8. On 2nd January 2009, Mr Peni wrote a cheque No. 858 for K470, 000.00 and made payable to Salonakori Cocoa Rehabilitation Limited which was engaged as a sub-contractor to Millennium Water Ltd.
9. On the 4th February 2009, Mr Peni deposited K500, 000.00 into an interest bearing deposit account with Kina Finance Ltd.
10. It is alleged the accused wrote other cheques and issued to other companies which were not directly related to the Buka Hospital Water project. These companies are: Ela Motors, LG Construction, Brian Bell, Noval Water Pty Ltd, PNG Sports Foundation, Air Niugini and Hertz Rent a Car.
11. It is further alleged that the accused wrote a further 32 "pay cash" cheques to individuals, in the like of Roger Token and Joseph Retsi.
12. For other cheques it is alleged he cashed them and used for his personal use and not for Buka Water Project.
13. Between the 01/12/2008 and 31/12/2009 it is also alleged that the money were used for purposes not related to Water Project for Buka General Hospital.
14. It is alleged that no proper tender process was followed. The project was given to the accused on mere expression of interest. This interest was revealed in a letter of 15/12/08.
15. Thus it is alleged that the accused used money for his own use or the use of other person.
16. On presentation of indictment on 23rd September 2013, the accused pleaded Not Guilty. Following trial he was found guilty and convicted for misappropriation of K2.7 million the property of Autonomous Region of Bougainville Government.
Antecedents
17. The prisoner has no prior convictions.
Allocutus:
18. When allocutus was administered, the Prisoner said he was sorry for what he did; he is a single parent his wife had left him some years ago and he has been looking after the 4 children for the last 9 years. He is a businessman, and has no previous convictions.
Submission for the Prisoner
19. Counsel for the Prisoner submits that each case must be decided on its own peculiar circumstances, and asks the court to be fair in its decision on sentence. The circumstances peculiar to the Prisoner are that he was a business man prior to and at the time when contracted to carry out the Buka General Hospital Water Project. The project was in line with the Prisoner's type of business. A large sum of money was spent, however little to no work was seen on the site.
20. In considering appropriate penalty, the court must consider factors of mitigation and aggravation.
Mitigation
21. The mitigating factors are:
Aggravation
22. The aggravating factors are:
23. Counsel for the Prisoner urged this court in considering appropriate penalty to pay attention to the Prisoner's personal particulars.
24. It is submitted for the Prisoner that in considering penalty the Court must not only be guided by the principles of punishment and deterrence, but also bear in mind the effect of prison sentence may have on the offender and his family.
Cases Discussed
25. In order for the court to impose a fair and appropriate sentence it should consider other cases relative to the offence committed by the Prisoner. The cases discussed are categorized under different heads of non-custodial sentence, partly suspended sentence, and custodial sentence.
Non Custodial Sentence
26. The court was referred to the case of The State v Ao (No. 2) [2002] N2247. In that case, the prisoner, a 47 year old female employed by the State through the Department of Education was convicted after a trial for eight charges of misappropriation of funds totalling K37,526.58, the property of her employer and a further charge of attempted misappropriation of K5,980.70 from her employer. The prisoner was the second in charge of the Department's Overseas Staff Section. The offences were committed over a period of two months by raising a number of false schedules for a number of overseas contract and volunteer officers employed with the Department of Education against which cheques were raised. The prisoner then forged signatures of the named payees and had the cheques cashed. The prisoner applied the funds towards meeting family and community needs. The prisoner was sentenced to three years imprisonment which was fully suspended on terms including orders for full restitution and community work under the supervision of the Probation Service.
27. In The State v Gibson Haulai [2004] N2555, the prisoner whilst in the employ of Air Niugini as a Cargo Officer in Vanimo between 8th April and 31st December 2002, applied to his own use the sum of K27, 320.00, property belonging to Air Niugini. The prioner's duties entailed the charging, collecting, depositing with the bank and accounting to his employer ticket and cargo sales. During this period, the prisoner collected various sums of money, ranging from K1, 266.10, the lowest to K17, 703.17 at the highest. Out of the sums the prisoner collected, he deposited only part of them in Air Nuigin's account, kept the balance to himself and applied them to his own personal use. This totaled K27, 320.00. To conceal his theft of this money, the prisoner falsified the customer's copy of the deposit slips to make it look as if he deposited the full amounts collect on each of the relevant occasions.
28. During the year-end closing of Air Nuigini's finances for the year 2002, internal audits showed that their records could not be reconciled with the bank account statements. This necessitated an investigation. The investigation revealed what the prisoner did. Air Niugini, therefore reported the prisoner to the police.
29. After its own investigations, the police eventually arrested and charged the prisoner with misappropriation. In his record of interview conducted with police on 25th March 2003, he admitted to committing the offences and gave details of what he did including the application of the money to his own personal use.
30. In State v Shirley Tainoli (24/11/2004) (Mogish J), unnumbered judgment, the offender had deposited a stolen cheque to the value of K185, 000 into an account controlled by her and her husband. At the time of sentence she had a 9 months old baby, the whole of the amount was recovered, she did not benefit from the fraud, there was no breach of trust and the offence was perpetrated only once. The offender was sentenced to 4 years imprisonment in light labour which was wholly suspended on probation conditions.
31. In The State v Daniel Mapiria, CR 1118 of 2000, Unreported & Unnumbered Judgment of Mogish, J delivered at Waigani on 7 September 2004, the offender in this case misappropriated K3,188,000.00 the property of the National Gaming Board while he was Chairman.
32. As Chairman of the Board, he was a signatory to the board's operating account. He would sign blank cheques and left them with the then Registrar of the board who was also one of the signatories. The prisoner countercheques were filled out for various sums of money.
33. He was found guilty after a trial and sentenced to a term of 9 years imprisonment. However he was found to have been suffering from a medical condition of some sort. This resulted in the whole sentence being suspended. If he was sent to jail, his condition would have been worsened and life threatening. It is noted here that, that case had special mitigating circumstances. In fact the presiding judge commented in that case that it was a case with special mitigations.
Partly Suspended Sentence
34. The State v Imoi Maino [2002] N2773 Cr No 340 of 2003 judgment of Acting Justice David as he was then. The offender misappropriated K106,355.02 whilst employed as pay-roll clerk with Education Department. In his Means Assessment Report it showed he had no means to repay the whole amount. He was sentenced to 4 years, 2 years to serve and balance of 2 years suspended with conditions.
Custodial Sentence
35. In the case of The State v Jimmy Kendi (No 2) [2007] N3131, the offender misappropriated K4, 298,037.33 by falsely pretending to own certain earth moving equipment and submitting false proposals to the State. This was the largest amount misappropriated. The court observed that the offender had no means to repay the amount. He was sentenced to nine (9) years imprisonment for misappropriation and four (4) years imprisonment for false pretence.
Submission for the State
37. In considering sentence Mr Auka for the State also referred to cases involving misappropriation. In the case of The State v Jimmy Kendi (No 2) [2007] PGNC 32; N3131, in which the prisoner was found guilty on two counts, one for obtaining monies by false pretence (S. 404 CCA) and the second one for misappropriation (S. 383A (1) (a) CCA) of the moneys obtained from the first offence. The total amount involved was K4, 298,037.33, the property of the State. He was sentenced to 4 years for false pretence and 9 years for misappropriation to be served cumulatively.
38. In The State v Moko Essi Kom CR No 114 of 2008, the prisoner was indicted on one count of misappropriation of a sum of K3, 780,000.00, the property of the Independent State of Papua New Guinea. The State invoked Section 7 of the Criminal Code alleging that the prisoner was deemed a principal offender. The prisoner pleaded guilty to the charge.
39. The court in that case considered the guilty plea of the offender and guided by the sentences imposed in the case of Daniel Mapiria (supra) and Jimmy Kendi (No 2) (supra), imposed a custodial sentence of 8 years on the prisoner.
40. In The State v Iori Veraga [2005] N2921, the accused who was a valuer was convicted after a trial on two counts of conspiracy to defraud and 4 counts of misappropriation of funds the property of National Provident Fund. The total amount misappropriated in the 4 counts was K144, 955.00. The accused fraudulently invoiced the National Provident Fund with excessive amounts for his services and when he was paid, he shared the money with his accomplice who was the Chairman of the National Provident Fund Board. The accused was sentence to 6 years imprisonment.
The Law
41. The offence of misappropriation is found in section 383A of the Criminal Code Act which is in this term:
383A. Misappropriation of property.
(1) A person who dishonestly applies to his own use or to the use of another person—
(a) property belonging to another; or
(b) property belonging to him which is in his possession or control (either solely or conjointly with another person) subject to a trust, direction or condition or on account of any other person,
is guilty of the crime of misappropriation of property.
(2) An offender guilty of the crime of misappropriation of property is liable to imprisonment for a term not exceeding five years except in any of the following cases when he is liable to imprisonment for a term not exceeding 10 years:—
(a) where the offender is a director of a company and the property dishonestly applied is company property; or
(b) where the offender is an employee and the property dishonestly applied is the property of his employer; or
(c) where the property dishonestly applied was subject to a trust, direction or condition; or
(d) where the property dishonestly applied is of a value of K2,000.00 or upwards.
(3) For the purposes of this section—
(a) property includes money and all other property real or personal, legal or equitable, including things in action and other intangible property; and
(b) a person's application of property may be dishonest even although he is willing to pay for the property or he intends to restore the property afterwards or to make restitution to the person to whom it belongs or to fulfil his obligations afterwards in respect of the property; and
(c) a person's application of property shall be taken not to be dishonest, except where the property came into his possession or control as trustee or personal representative, if when he applies the property he does not know to whom the property belongs and believes on reasonable grounds that such person cannot be discovered by taking reasonable steps; and
(d) persons to whom property belongs include the owner, any part owner, any person having a legal or equitable interest in or claim to the property and any person who, immediately before the offender's application of the property, had control of it.
42. For purpose of considering sentence on this prisoner the relevant provision is section 383A (1) (a) (2).
43. The prescribed maximum sentence that may be imposed under this section is 5 years imprisonment except in cases where the amount misappropriated exceeds K2000.00 where the maximum prescribed penalty is 10 years imprisonment, as is the case of this prisoner.
44. In search for guidelines in sentencing for offences of misappropriation and such offences the authority is the case of Wellington Belawa v The State (1988-89) PNGLR 496.
Wellington Belawa Guidelines
The prisoner took K2,7000,00.00.
Not applicable
Acts committed are premeditated and took place between1st December 2008 and 31st December 2009.
Contrary to what prisoner may say about the good use of the money he got, there is no water supply for the Buka General Hospital and no proper or reasonable explanation given for payments made. The prisoner and others benefitted.
The Autonomous Region of Bougainville Government lost K2.7 million, but the greatest effect was on the Buka General Hospital, losing its water supply through misuse of the K2.7 million by the prisoner. Those who lose more are the hospital patients where the only source of water is obtained from bore where the quality is not as high as that from supplied water which the prisoner was tasked to provide but for the misappropriation of the fund.
The prisoner is now being incarcerated, and being a single parent will be separated from his children. He is an entrepreneur; will now not able to control physically his daily business activities.
The money was given to the prisoner to construct water supply for the Buka General Hospital which service is of a public nature and therefore all persons who come into contact with the hospital have been robbed of a vital service. Public at large are crying for services but many do not see the tangible outcome as persons who should be the provider and deliverer of those services are diverting public funds for their own use.
The public have lost trust and confidence on the prisoner and would not approve of him if he were to be given another chance to complete the project.
The prisoner had not made any payments, but had expressed his desire to make restitution as indicated in the means assessment report. The prisoner says that some money had been recovered from Kina Finance in the sum of K500, 000.00 plus interest of K51, 448.00 and a further sum of K146, 000.00 recovered from Bank South Pacific. If these sums were in fact recovered it is not known where these moneys were paid to. Thus the court is not in a better position to confirm if such moneys were paid to the rightful owner which in this cases the Autonomous Region of Bougainville Government or the State.
The prisoner could not reveal the amount of his savings in his private and company accounts held with ANZ bank. The operating business account under the company name, Millennium Water Ltd is Account No. 13446927. His other personal saving account has about K200 or K300.
His other assets comprising of a house, 12 vehicles and trucks valued at K2 million (no documents to verify this claim). Prisoner has K300, 000.00 loan with Kina Finance.
Prisoner when interviewed by the Probation Officer as to his means and ability to restitute says that his earning from water bottling sales from both Lae and Port Moresby business is K20,000.00 to K30,000.00 per week. This amount will increase in 2014 when he expand into other water related businesses.
He is prepared and able to make full restitution by way of instalment at K100, 000.00 per quarter and for a period of 5 years.
The MAR appears to favour the prisoner to repay what he misappropriated. The financial situation of the prisoner's business Millennium Water Ltd seems to be healthy based on the projection of income, expenses and savings prepared by the company accountant. Yearly projection shows total income of K1, 362,240.00, total expenditure of K83, 771.28 and surplus of K1, 278,468.72.
The report of the probation officer recommends that the prisoner be given suspended sentence for purpose of making full restoration of the money misappropriated.
He has had an unblemished record with no prior convictions until now. He is a business man and a community leader.
10. Matters of Mitigation Special to Himself
He was 51 years of age at the time of the commission of this offence and would be about 53 years by now
11. He has been a single parent looking after four children for the last 9 years since the departure of his wife.
The case of Wellington Belawa also recommended a scale of sentences to be adjusted downward or upward depending on the various factors mentioned above; which are, where the amount misappropriated is between K1.00 and K1000.00, a gaol term should rarely be imposed; between K1000.00 and K10,000.00, a gaol term of up to 2 years; between K10,000.00 and K40,000.00, a gaol term of 2 to 3 years; between K40,000.00 to K150,000.00 a gaol term of 3 to 5 years.
45. It is generally accepted now that while the factors set out in the Wellington Belawa case are still relevant, the tariff recommended is outdated and therefore there is a need to impose stiffer sentences due to the prevalence of the offence. However, the court still has a considerable discretion under s.19 of the Criminal Code to impose an appropriate sentence depending on the facts or circumstances of a particular case.
Conclusion
46. This case does not fall under any of the categories of the tariff recommended in Wellington Belawa. The amount of money misappropriated in that case is far less than the present case.
Counsel for the prisoner urged this court when considering sentence, must not only be guided by the principles of punishment and deterrence, but also bear in mind the effect a prison sentence may have on an offender and on his family.
He submits that this case is similar to that of The State v Daniel Mapiria (supra) where the offender was found guilty after a trial for misappropriating K3,188,000.00, and sentenced to 9 years imprisonment but wholly suspended on conditions.
47. The State on the other hand submits that the offence of misappropriation is widely prevalent in this country and does not seem to be slowing down, thus, requiring sentence necessary for deterrence.
48. It further submits that the aggravating factors outweigh mitigating factors.
49. Should the court consider any suspended sentence it was submitted that the Supreme Court has held that there can be no suspension of sentence without the support of a Pre-sentence Report: Public Prosecutor v Don Hale (1998) SC 564; Edmund Gima and Siune Arnold v The State (2003) SC730; Richard Liri v The State (2007) Sc 883.
50. The State therefore submits that a custodial sentence be imposed as a personal and general deterrence on the prisoner and those who intend to follow suit.
51. It is finally submitted that guided by the cases cited in the submission a sentence with specific reference to the case of Jimmy Kendi, a trial matter, within the range of 8 and 10 years imprisonment be appropriate.
52. I have considered the cases referred to me by counsels. Of the cases cited the three more closer to the present case are that of Daniel Mapiria (misappropriation of K3,188,000.00), Jimmy Kendi (No. 2) misappropriation of K4,298,037.33, where both prisoners were sentenced to 9 years after trial and The State v Moko Essi Kom, CR No 114 of 2008, misappropriation of K3,780,000.00 and imprisonment for 8 years.
53. Taking into account the submissions of counsel in particular the cases cited and given the seriousness and prevalence of the offence, the circumstances in which this offence was committed would attract a prison term in the vicinity of the maximum allowed by law.
54. However, having considered the prisoner's antecedents, I am of the view that the interest of the State in particular the victim would be best served by a suspended sentence. If the prisoner is sent to gaol the victim would be greatly disadvantaged. However if the prison term is such that the prisoner will feel the effect of his misdeed and a sense of making good his wrong and the victim on the other hand benefits if the orders are made in the form of restitution.
55. In this type of cases where state funds had been misused the interest of the state would be better served by an order for restitution, so that those who have been affected by the loss may recover and enjoy the services previously neglected by the offender. To achieve this end a non custodial sentence would be an appropriate penalty to allow the offender an opportunity to restitute whilst at the same time maintaining the means of payment by continuing with his normal business.
Sentence
56. You are convicted and sentenced to eight (8) years imprisonment in hard labour, less 3 months and 1 week for pre-sentence detention, leaving the balance of 7 years, 11 months, 3 weeks which is your effective sentence.
However, pursuant to s.19 of the Criminal Code and sections 16 & 22 of the Probation Act the Court hereby:
(i) suspends the 7 years, 11 months, 3 weeks sentence of imprisonment imposed on you
(ii) releases you on Probation from the date of this Order,
effective from the day you are released from detention with the conditions below:
AND ORDERS THAT YOU BE PLACED ON PROBATION for a period of 5 years from the 11th day of April, 2014 with the conditions below.
1. You shall go and remain at your usual place of abode until you are contacted by Probation Officer; and
2. You shall report to a Probation Officer as and when required by the Probation Officer; and
3. You shall keep the peace and be of good behaviour; and
4. You shall not change address unless you have given a Probation Officer reasonable notice your intention to do so, and the reasons for the proposed changed; and
5. If you move to an area outside the Province, you shall report to Probation Officer of that area within 48 hours of arrival and advise that Officer of the nature and place of your employment and your new address; and
6. You shall give your Probation Officer reasonable notice of any intention to change your employment and advise him of nature and place of your proposed employment; and
7. You shall, for the purpose of the Probation Act, allow a Probation Officer to enter your home during reasonable hours; and
8. You shall not drink or take any alcoholic drinks or dangerous drugs.
9. You must not commit any criminal offence whilst you are on probation.
10. In addition you are to restitute the State the sum of K2.7 million money you misappropriated.
11. The repayment shall be by way of instalment at the rate of K100, 000.00 per quarter, commencing on the 27 June 2014 and thereafter on the last Friday of the 3rd month.
12. The period of full restitution shall be 5 years.
______________________________________________________________
Public Prosecutor: Lawyer for the State
Public Solicitor: Lawyer for the Accused
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