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D'Attanasio v The State [2025] PGSC 71; SC2757 (31 July 2025)
SC2757
PAPUA NEW GUINEA
[SUPREME COURT OF JUSTICE]
SCRA NO 48 OF 2024
CARLOS D’ATTANASIO
Appellant
V
THE STATE
Respondent
WAIGANI: CANNINGS J, TOLIKEN J, BERRIGAN J
23 JUNE, 31 JULY 2025
CRIMINAL LAW – OFFENCES – money laundering, Criminal Code, s 508B(1) – elements of offence.
EVIDENCE – CRIMINAL TRIAL – whether permissible for conviction to be based entirely on evidence tendered by the State
without oral testimony – whether weight can be attached to uncorroborated evidence of a sniffer dog’s search of a place
for suspicious material – circumstantial evidence – principles applicable – accomplice evidence – principles
applicable.
The appellant appealed against his conviction at a trial with three other accused for money laundering under s 508B(1) of the Criminal Code. He argued that the trial judge erred in law and fact in two respects. First, by misinterpreting the elements of the offence, when
the State’s allegations, even if sustained, did not support a conviction under s 508B(1). Secondly, by entering a conviction
in the absence of sufficient admissible evidence, in that: (a) the State’s case was based entirely on tendered evidence without
oral testimony; (b) reliance was placed on uncorroborated evidence of a sniffer dog’s search of the appellant’s yacht;
(c) the trial judge misapplied the principles of circumstantial evidence by not assessing a reasonable and innocent explanation of
evidence tending to implicate the appellant, in the appellant’s record of interview; and (d) evidence of co-accused, which
identified the appellant as being directly involved in commission of the offence, was used against the appellant contrary to the
principles of accomplice evidence.
Held
(1) Elements of the offence of money laundering under s 508B(1) are that the accused: (a) deals with; (b) property (c) that is criminal
property; and (d) knows or reasonably ought to know that the property is criminal property.
(2) The trial judge did not misinterpret the elements of the offence. The State’s case, which alleged that the appellant concealed
cocaine, which was criminal property, which the appellant knew or ought reasonably to have known, if sustained, supported the offence
of money laundering, as charged.
(3) No error of law was committed by the trial judge in allowing the State to proceed solely on evidence tendered by the State without
oral testimony in the circumstances of this case.
(4) Evidence of a sniffer dog’s search of the appellant’s yacht, which was admitted into evidence without objection by
the appellant, and supported by evidence as to the expertise of the handler and training of the dog, was admissible. No error of
law was committed by the trial judge in that regard.
(5) The trial judge did not fail to properly consider the appellant’s record of interview. The appellant’s denial was
limited in nature, untested and of little weight.
(6) In a joint trial of two or more accused, the principles of accomplice evidence require that prior out of court statements made
by one accused (such as in a record of interview or confessional statement) implicating another accused is not admissible against
the latter unless it is adopted by the former at the trial. Here, the trial judge correctly set out the principles but erred by relying
on admissions in the records of interview of two of the accused, which implicated the appellant in commission of the offence.
(7) Though there was some circumstantial evidence implicating the appellant, the Supreme Court could not be satisfied beyond reasonable
doubt that the only rational inference arising from it was the guilt of the appellant.
(8) The conviction was unsafe and unsatisfactory. The appeal was allowed and the verdict was set aside.
Cases cited
Aparo v The State (1983) SC249
Beng v The State [1977] PNGLR 115
Birch v The State [1979] PNGLR 75
Bukoya v The State (2007) SC887
Cutmore v The State (2024) SC2684
Davinga v The State [1995] PNGLR 263
Guli v State (2022) SC2272
Ingian v The State (2022) SC2263
Kaya v State (2020) SC2026
Lati v The State [2015] 1 PNGLR 242
Pawa v The State [1981] PNGLR 498
Pritchard v The State (2016) SC1541
R v Sykes (1977) Crim LR 752
The State v Bae (2019) N8029
The State v Cutmore (2022) N10001
The State v Tomande (2019) N8030
Tom v The State (2019) SC1833
Consel
D Dotaona, for the appellant
D Kuvi, for the respondent
- BY THE COURT: Carlos D’Attanasio appeals against his conviction at a trial with three other accused for money laundering under s 508B(1) of
the Criminal Code.
- The appellant is an Italian national. He was jointly indicted with three Papua New Guineans, Shane Dikana, Dominic Terupo and Morgan
Mogu, that they between 1 February 2020 and 26 July 2020 concealed 611 kilograms of cocaine/narcotic drug valued at K200,000,000
when they knew or ought to reasonably to have known that it was criminal property, contrary to s 508B(1) and (3)(a) of the Criminal Code.
- The State alleged that the appellant and Mogu first met in Milne Bay in 2018 with two others now believed to be in Australia. Mogu
kept in contact with the latter two. In early 2020 Mogu was told that there was a “big job” coming up and that in March-April
2020 there was a yacht passing through the Solomon Islands that would drop off cargo to him at Kupiano, Central Province. Mogu enlisted
his brother-in-law, Terupo, to travel out to where the appellant was moored in his yacht at Kupiano to collect packages, which were
packages of cocaine, and transport them to Mogu’s house at Five Mile, in Port Moresby.
- On or about 24 or 25 July 2020 Terupo and Dikana transported the packages to Papa-Lealea in Central Province where they concealed
the packages in the bush and lay in wait for a small plane to collect the packages and fly the packages to Australia. On 26 July
2020 another accomplice, John Cutmore, landed in a small plane at Papa-Lealea. Terupo and Dikana with the assistance of relatives
loaded the packages onto the plane but the plane crashed upon take-off at the end of the makeshift runway. The group removed the
packages (the cocaine), concealing it in the bush.
- At the trial the State relied on tendered evidence consisting of 137 exhibits, including records of interview of the four accused,
which was admitted by consent. There was no oral testimony. All accused including the appellant remained silent.
- After hearing submissions the trial judge accepted the State’s allegations and convicted the four accused including the appellant
of money laundering, as charged.
GROUNDS OF APPEAL
- The appellant argues that the trial judge erred in law and fact in two respects.
- First, by misinterpreting the elements of the offence, when the State’s allegations, even if sustained, did not support a conviction
under s 508B(1).
- Secondly, by entering a conviction in the absence of sufficient admissible evidence, in that:
- (a) the State’s case was based entirely on tendered evidence without oral testimony;
- (b) reliance was placed on uncorroborated evidence of a sniffer dog’s search of the appellant’s yacht;
- (c) the trial judge misapplied the principles of circumstantial evidence by not assessing a reasonable and innocent explanation of
evidence tending to implicate the appellant, in the appellant’s record of interview; and
- (d) evidence of co-accused, which identified the appellant as being directly involved in commission of the offence, was used against
the appellant contrary to the principles of accomplice evidence.
ARGUMENT AS TO MISINTERPRETATION OF ELEMENTS OF THE OFFENCE
- The offence of money laundering is created by s 508B(1) of the Criminal Code, which states:
A person who deals with property that is criminal property and who knows or reasonably ought to know that the property is criminal
property is guilty of an offence.
Penalty:
(a) if the offender is a natural person - a fine not exceeding K500,000.00 or imprisonment for a term not exceeding 25 years or both;
or
(b) if the offender is a body corporate - a fine not exceeding K1,000,000.00.
- The elements of the offence have been properly described by Berrigan J in the National Court in The State v Bae (2019) N8029, The State v Tomande (2019) N8030 and The State v Cutmore (2022) N10001. There are four elements, viz that the accused:
(a) deals with;
(b) property;
(c) that is criminal property; and
(d) knows or reasonably ought to know that the property is criminal property.
As to element (a), there is an inclusive definition of “deals with” in s 508B(3), which provides:
For the purposes of Subsection (1) "deals with property" includes one or more of the following:
(a) conceals property; and
(b) disguises property; and
(c) converts property; and
(d) transfers property; and
(e) removes property from Papua New Guinea; and
(f) brings property into Papua New Guinea; and
(g) receives property; and
(h) acquires property; and
(i) uses property; and
(j) possesses property; and
(k) consenting to or enabling any of the actions referred to in any of Paragraphs (a) to (j); and
(l) using an electronic system or device to do any of (a) to (k).
- The meaning of concealing or disguising property is refined by s 508B(4):
For the purposes of Subsection (3), conceals or disguises property includes concealing or disguising its nature, source, location,
disposition, movement or ownership or any rights with respect to it.
- As to element (b), “property” is defined in s 508A:
"property" means assets of every kind, whether tangible or intangible, corporeal or incorporeal, moveable or immovable, however acquired,
including an enforceable right of action, and legal documents or instruments in any form, including electronic or digital, evidencing
title to, or interest in, such assets, including but not limited to currency, bank credits, deposits and other financial resources,
travellers cheques, bank cheques, money orders, shares, securities, bonds, drafts and letters of credit, whether situated in Papua
New Guinea or elsewhere, and includes a legal or equitable interest, whether full or partial, in any such assets.
- As to element (c), “criminal property” is defined in s 508A:
"criminal property" means property that is, in whole or in part and whether directly or indirectly, derived from, obtained or used
in connection with criminal conduct and includes any interest, dividends or other income on or value accruing from or generated by
such property, regardless of who carried out the criminal conduct or who benefited from it.
- “Criminal property” refers to “criminal conduct”, which is defined by s 508A:
"criminal conduct" is conduct which —
(a) constitutes an offence in Papua New Guinea for which the maximum penalty is death or a term of imprisonment for at least six months;
or
(b) would constitute an offence in Papua New Guinea if it occurred in Papua New Guinea and for which the maximum penalty under the
law of Papua New Guinea is death or a term of imprisonment for at least six months.
- As to element (d), s 508B(2) is relevant to determination of whether an accused knows that the property is criminal property. It provides:
Knowledge in Subsection (1) may be inferred from objective factual circumstances.
- Mr Dotaona, for the appellant, submitted that the trial judge misinterpreted the elements of the offence. He urged us to take a purposive
approach to s 508B, which is a provision inserted in the Criminal Code as part of a new Division VIA (money laundering and terrorist financing) by the Criminal Code (Money Laundering and Terrorist Financing) (Amendment) Act 2015. He contended that we should adopt the analysis of s 508B of Kariko J in Cutmore v The State (2024) SC2684.
- In that case, which was an appeal against sentence for an offence under s 508B(1), his Honour suggested that “in drug-related
offences, particularly drug trafficking, it is the proceeds of crime, mostly money, that concerns the offence of money laundering”.
His Honour considered that the offence is intended to target the intentional concealment or integration of proceeds of crime into
the financial system. On this reasoning, cocaine would not be regarded as an asset.
- Mr Dotaona submitted that in the present case, there was no evidence that the appellant had converted or laundered the proceeds of
any crime into money. There was no evidence, and it did not form part of the State’s case, that the appellant obtained, let
alone laundered, any proceeds from sale of the cocaine that was alleged to be concealed on his yacht and later transported to Papa-Lealea.
He submitted that even if the State’s case were sustained, it would not support the charge of money laundering.
- We reject those submissions. We decline to adopt the reasoning of Kariko J in Cutmore. Whilst money laundering is generally understood to concern the processing of monies so as to conceal their criminal origin, the
offence prescribed under s 508B(1) is deliberately broad and designed to capture any dealing with criminal property: The State v Bae (2019) N8029.
- Most attention must be given to the words used to create the offence. The first step to take when interpreting any statutory provision,
in particular a provision that creates an offence, is to read the provision and ascertain the plain and ordinary meaning of the words
used.
- If the plain and ordinary meaning of the words is clear and unambiguous and does not yield an absurd result, the words should be given
that meaning. If the meaning is unclear or ambiguous or yields an absurd result, it may be necessary to consider the purpose of the
law under which the provision was made.
- Here, we consider that the plain and ordinary meaning of the words used in s 508B is clear. It does not yield an absurd result. Section
508B clearly covers a broad range of activities that involve dealing with criminal property. The elements of the offence are drawn
from those plain and ordinary words.
- The learned trial judge did not misinterpret the elements of the offence. The State’s case, which included the allegations that
the appellant’s yacht was used to possess and conceal cocaine, which cocaine was criminal property, being derived from, obtained
or used in connection with criminal conduct, which the appellant ought reasonably to have known, if sustained, supported the offence
of money laundering, as charged. The appellant was not charged with the wrong offence.
- We find no error of law or fact on the part of the trial judge in that regard.
ARGUMENT AS TO ENTERING CONVICTION IN THE ABSENCE OF SUFFICIENT ADMISSIBLE EVIDENCE
- It is argued that the appellant’s conviction is unsafe and unsatisfactory as there was insufficient admissible evidence on which
the court could be satisfied beyond reasonable doubt of the existence of all elements of the offence. The appellant argues that the
trial judge committed four errors of law.
(a) Entering conviction based entirely on tendered evidence without oral testimony
- It is argued that the trial judge erred by permitting the State’s case to proceed solely on tendered documents contrary to Bukoya v The State (2007) SC887. We reject the argument.
- The adversarial nature of a criminal trial is well established. The trial judge must be careful not to interfere in the conduct of
a trial or unduly participate in it themself. That is not to say that a trial judge may not intervene to control proceedings and
ensure the efficient administration of justice. A trial judge in a criminal proceeding has the power to intervene by asking questions
and calling or recalling witnesses if they consider in their discretion that the course is necessary to the ascertainment of truth
or in the interests of justice (Birch v The State [1979] PNGLR 75). Such intervention may be extensive or detailed but a trial judge must not intervene unduly such that the trial is unfair so as
to amount to a miscarriage of justice (Guli v The State (2022) SC2272).
- Subject to limited exceptions, parties are bound by the conduct of their counsel, who exercise a wide discretion in deciding what
issues to contest, what witnesses to call, what evidence to lead or to seek to have excluded, and what lines of argument to pursue
(Kaya v State (2020) SC2026, Tom v The State (2019) SC1833).
- Bukoya was a unique case. The issue was self-defence and that issue turned on the credibility of the State witnesses, none of whom were produced
by the State, some of whose evidence was conflicting and some of whom might have been considered accomplices. It was clearly unsafe
for the trial judge to convict in those circumstances.
- The admission of statements, documents and other materials by consent is a common and proper occurrence for the reasons outlined in
Devinga v The State [1995] PNGLR 263. It would advance neither the interests of justice nor its efficient administration to do otherwise in most cases, and parties are
increasingly expected to identify the issues in the trial prior to its commencement for that purpose.
- In addition, an accused has a right to require witnesses listed on the indictment for cross-examination. There may be strategic reasons
for deciding not to do so and in general terms that will be a matter for the accused and their counsel. If the State chooses to rely
on a tendered statement rather than calling a witness then depending on the nature of that evidence that may affect its weight. Ultimately,
it is the State’s case to prove and the question will always remain whether the State has established its case beyond reasonable
doubt.
- There was no error on the part of the trial judge in allowing the State to take the course it did. The appellant did not and was not
in a position to challenge much of the State’s evidence. It was not his case that there was no cocaine, simply that he had
nothing to do with it. He did not require for cross-examination the members of the Royal Papua Yacht Club, Port Moresby, who gave
evidence about his stay from late April 2020, much of which was supported by documentation and hardly controversial. He did not challenge
the search of the vessel on 3 and 4 August 2020. He made very few admissions in the record of interview. He did not challenge its
voluntariness or its accuracy.
- It is hardly surprising having regard to the above that he chose not to challenge the evidence. Most importantly those were all matters
he and his lawyer were best placed to decide.
- No error was committed by the trial judge allowing the State to rely solely on tendered evidence.
(b) Reliance on uncorroborated evidence of sniffer dog’s search of the appellant’s yacht
- There was evidence that a police sniffer dog team had been brought on to the appellant’s yacht moored at the Royal Papua Yacht
Club on 3 August 2020, and that the search resulted in the police seizing 50 grams of cocaine from the yacht. The trial judge assessed
that evidence as follows:
The evidence of the sniffer dog is corroborated by the evidence of 50 grams of cocaine found on his boat and the tampering of the
floorboards on the vessel. All these circumstances lead me the conclusion that he [the appellant] was the transporter of the 28 bags
of cocaine. His presence in PNG waters was not coincidental, and the purpose was to facilitate transportation of cocaine from his
yacht to Kupiano beach. He was part of the syndicate involved in drug trafficking.
- Mr Dotaona submitted that his Honour erred by relying on that evidence, as it should have been corroborated, but was not. There was
no evidence that substantiated the dogs’ training or the handlers’ qualifications.
- We reject that submission. As observed by the trial judge that evidence was admissible if it could be established that the handler
had the requisite expertise to handle a dog which was trained and reliable in detecting certain scents. Furthermore, that the relevance
and weight to be given to such evidence is a matter to be determined according to the circumstances of the case at hand (R v Sykes (1977) Crim LR 752).
- No objection was taken to the execution of the search warrant. There was a statement from the dog’s handler as to his expertise,
the training and experience of the dog and the conduct and result of the dog’s search of the yacht. The appellant did not require
the handler for cross-examination. Those were decisions for the appellant and his counsel, and may well have been made on the basis
that there was no advantage in challenging the evidence, which would perhaps only have served to emphasise the expertise of the handler,
the dog’s training and experience, the reliability of the evidence, the areas of interest within the boat and the evidence
found.
- There was no error in the reliance of the trial judge on the evidence that a sniffer dog identified areas of interest within the boat.
(c) Application of principles of circumstantial evidence
- The trial judge acknowledged that there was no direct evidence that the appellant was the transporter of the drugs in the yacht that
sailed to Kupiano, which were off-loaded and then taken to Papa-Lealea. His Honour set out the principles to apply when the case
against an accused is based on circumstantial evidence, arising from the leading case Pawa v The State [1981] PNGLR 498: the accused can only be convicted if the circumstances are such as to be inconsistent with any reasonable hypothesis other than
the guilt of the accused.
- It is argued for the appellant that his Honour erred in law by basing the conviction on circumstantial evidence without assessing
the appellant's record of interview, which offered an exculpatory inference, ie that he was transporting cargo without knowledge
of its contents. There were other reasonable hypotheses available including that the 50 grams of cocaine found on his yacht was for
personal use.
- We reject those submissions. The trial judge did not fail to properly consider the appellant’s record of interview. The few
admissions made did not assist the appellant, namely that he was an Italian ice-cream maker on a voyage of self-discovery, who had
sailed from South America, through Barbados, San Lucia, Aruba, Panama, Christmas Island and Tarawa before reaching Bira Bira, Milne
Bay on a date which was not established. He was not asked and did not make any admissions about the 50 grams of cocaine found on
his boat. The fact that the appellant denied any knowledge of the cocaine found at Papa-Lealea is hardly determinative.
- The trial judge did not err in the manner contended.
(d) Application of principles of accomplice evidence.
- In a joint trial of two or more accused, the principles of accomplice evidence require that the statements made by one accused outside
of court (other than statements made in the course of a joint criminal enterprise to which the accused was a party for the purposes
of the co-conspirator’s rule), such as in a record of interview or confessional statement, implicating another accused is not
admissible against the latter unless it is adopted by the former at the trial (Aparo v The State (1983) SC249, Pritchard v The State (2016) SC1541, Ingian v The State (2022) SC2263).
- Here, the trial judge correctly set out those principles. However, it is argued for the appellant that his Honour erred in law by
taking into account admissions in the records of interview of two of the accused, Mogu and Terupo. Those admissions implicated the
appellant in commission of the offence by identifying him as “Butterfly” or “Kapiten,” the person whose yacht
was moored at Kupiano from which the cocaine was offloaded.
- We uphold this submission. It is apparent that his Honour relied on admissions by Mogu and Terupo that they received the cocaine
from a person referred to as “Kapitan” or “Butterfly” in Kupiano in late March-early April 2020 and that
the person was most likely from Italy and spoke broken English.
- It was evidence that was considered by his Honour in finding that the appellant was the person whose yacht was moored at Kupiano and
that that was the yacht from which 28 packages of cocaine were conveyed by dinghy to shore at Kupiano, and then by road to Five Mile,
and then by road to Papa-Lealea. The State concedes, and having reviewed the material, we find that there is no evidence of this
aspect of the State’s case other than that contained in the out of court statements of the co-accused.
- It was an error for the trial judge to rely on those statements to make adverse findings against the appellant. We uphold this ground
of appeal.
DETERMINATION OF APPEAL
- Having determined that there was an error of law we must consider whether a miscarriage of justice has actually occurred and if not
dismiss the appeal: Lati v The State [2015] 1 PNGLR 242, applying Beng v The State [1977] PNGLR 115.
- There was uncontradicted evidence at the trial that cocaine was loaded onto a plane at Papa-Lealea. Its weight and volume were uncontested
as was the fact that it originated from Columbia, that it was intended to be flown to Australia by an Australian pilot. This evidence
established a coordinated plan involving international and national participants.
- As for the appellant’s connection to these events, the evidence established that he was from Italy. He admitted that he sailed
in his yacht, MV Badu, from South America to Tarawa, Kiribati, and then to Bira Bira Bay, Milne Bay in PNG and then to Cape Rodney
near Kupiano in Central Province before sailing to Port Moresby to declare his arrival for custom purposes. Morgan Mogu has a house
at Kupiano, where he owns a dinghy.
- According to the records of the Royal Papua Yacht Club and PNG Customs, which evidence was tendered by consent, the appellant sailed
to the Royal Papua Yacht Club marina on 26 March 2020. Due to the Covid State of Emergency Lockdown he was told to anchor in isolation
between Manubada and Ela Beach for 14 days.
- Between 9 and 14 April 2020 repeated requests were made by the appellant via radio to come ashore. MV Badu anchored outside the marina
awaiting clearance. On 14 or 16 April 2020 the appellant completed documentation at the Royal Papua Yacht Club. The yacht was cleared
by Customs on 20 April 2020. Due to Covid protocols Customs did not search the yacht.
- According to the documentation that the appellant provided to PNG Customs he was the owner of MV Badu, registered in Holland, and
departed Panama on 24 October 2019. His passport expired on 7 March 2020. His stated reason for travelling to PNG was repair and
tourism. His intended destination was Bali on 31 July 2020 with a couple from Europe, whose yacht it appears according to the statement
of the Customs officer concerned was at the Royal Papua Yacht Club after being rescued after suffering damage to its sails by an
international cargo vessel and their yacht was later salvaged by Pacific Towing based in Motukea. MV Badu left the marina on 28 May
and returned four days later.
- In early July the appellant informed the Royal Papua Yacht Club that he intended to go to Alotau and sought a final bill. On 26 July
2020 a plane piloted by John Cutmore crashed at Papa-Lealea. John Cutmore surrendered himself on 27 July 2020 to the Australian High
Commission and was interviewed by police on 30 July 2020.
- On 30 July 2020 the appellant’s co-accused were arrested. At about 3 pm that day 28 bags of cocaine were located hidden in the
bush 3 kilometres from the Papa-Lealea airstrip. The cocaine originated from Columbia in South America. On the same day the appellant
sought clearance for Bali departing 1 August 2020. The clearance was issued on the morning of 1 August but the vessel did not depart.
- On 3 and 4 August 2020 a search was conducted of MV Badu by police and PNG Customs Service with assistance from the Police Dog Unit
during which a sniffer dog trained in identifying scents including cocaine, methamphetamine, ice, marijuana and explosives, indicated
four areas of interest within the exterior and interior of the yacht compartments, namely the exterior of the captain’s cabin,
the navigation area within the interior living room, the master bedroom at the back, a bedroom at the front and an adjacent front
storage room.
- It was also observed during the search that the original floor placements (floor material) of the two front rooms and the rear master
bedroom had been replaced. A small quantity of cocaine, 50 gm, was found in a plastic bag in the navigation area of the living room.
However, no comparison of that cocaine was made with the 28 bags of cocaine seized.
- The totality of the circumstances is clearly suspicious. The question is whether it excludes any rational inference other than that
the cocaine found at Papa-Lealea came from the appellant’s yacht.
- The timing of the appellant’s planned departure coincided with Cutmore’s flight. Having said that, the appellant remained
in the country after he had permission to leave. There was cocaine found on his yacht, however the quantity was small and there was
no evidence to show it was from the same cocaine found at Papa-Lealea. The areas of interest were multiple and covered a large area
within his yacht, which was capable of transporting the volume and weight of cocaine concerned, but those areas were not analysed.
- This is a borderline case. In the circumstances we must err on the side of caution. We are not satisfied beyond reasonable doubt that
the only reasonable inference arising from the circumstantial evidence was the guilt of the appellant.
- In all the circumstances, the conviction was unsafe and unsatisfactory. The appeal must be allowed, the conviction must be quashed
and substituted with a verdict of not guilty.
ORDER
(1) The appeal against conviction is upheld.
(2) The conviction for money laundering is quashed and substituted with a verdict of not guilty.
(3) The appellant shall be discharged from custody forthwith.
Lawyers for the appellant : Dotaona Lawyers
Lawyer for the respondent: Public Prosecutor
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