Rex v Loketi [2014] TOSC 8; CR 6 - 10 of 2013 (23 April 2014)

IN THE SUPREME COURT OF TONGA
CRIMINAL JURISDICTION
NUKU'ALOFA REGISTRY

CR 6, 7, 8, 9 & 10 of 2013

R E X

V

1. MO'UI LOKETI
2. FIFITA 'ULUHEUA LATU
3. SIONE MATAFAHI
4. TAVAKE KAUFUSI
   

BEFORE THE HON. JUSTICE CATO

Mr Sisifa for the Crown
Mrs Taufateau for the first defendant
Mr Niu SC for the second, third and fourth defendants;

SENTENCE

[1] The prisoners appeared before me today for sentence. Ms Loketi, Ms Latu and Mr Matafahi had been found guilty after a lengthy trial of charges of embezzlement contrary to section 158 of the Criminal Offences Act, and false accounting contrary to section 159 (a) of the same Act. Mr Kaufusi, although initially defending the same charges, at the conclusion of the Crown case pleaded guilty to embezzlement and false accounting. I remanded all of the accused in custody, and ordered probation reports. I have read those reports, and references.

[2] These prisoners are the last in a series of prosecutions relating to fraudulent activity (guilty embezzlement and false accounting) brought against staff of the Westpac bank, who at the material time were working in the foreign exchange section of the bank. Other offenders had pleaded guilty at an early opportunity and had been sentenced by me to various prison terms. I shall refer to those that are relevant during the course of my sentencing.

[3] Two of the factors, however, I mention at the outset in relation to the other offenders whom I have dealt with is that they were given substantial discounts for their early pleas did save the Crown from adducing lengthy evidence in proof of the case against them, and was evidence that the prisoners were truly contrite about their offending. Further, all had similar backgrounds to the present prisoners. All were first offenders and had shown some promise in their schooling, and in some cases had tertiary qualifications; and most if not all had church and community or family support. Their early pleas were also considered by the Court, together with their contrition to be evidence of genuine regret, and as such they were all considered good prospects for rehabilitation, which justified the Court partially suspending their sentences. I have attempted in this sentencing to keep some parity in these sentences with those offenders who have been dealt with already.

[3] In those cases, I emphasized the importance of trust and the need for sentences to deter others from committing such offences. It appears that offending of this kind amongst employees and not uncommonly young offenders is rather prevalent in Tonga. Offending of this kind is serious not only because of the offender's breach of trust or fidelity to his or her employer, but also because it brings into question the reliability and integrity of the institution, in this case a bank, both in so far as its local and international reputation is concerned aside from any financial loss it incurs.

[4] As an illustration of the sentences I had imposed, there was Stephanie Cocker CR3/13 who was the most serious of those who had pleaded guilty to charges of dishonesty; embezzlement, falsification of accounts and theft. She had converted a sum of $99,450.10. There were a large number of conversions over a period of about two years. She was a first offender aged 27 was married with one child, had received a good education, was a senior officer and had good references. The starting point I considered appropriate in her case was four and half years. This, by Tonga standards, appeared to me to be significant offending. After taking into account her early guilty plea, and the fact that she was a first offender and other favourable references, I reduced the sentence to three years. She was the first person to be sentenced. Because I considered her early plea demonstrated her genuine contrition, I suspended the final year of her sentence by one year on condition she commit no further crimes punishable for two years.

[5] A further case by way of comparison was 'Anasitasisi To'a, CR7/13 who pleaded guilty to the same charges when he was working as a foreign teller. In his case, there were a considerable number of conversions also totalling $25,208.30 over a period of two years. He also was a first offender, aged 30, and was separated with children. He also had a good education and references. Taking into account his early guilty plea and the fact this was his first conviction, I sentenced him to two years imprisonment. In his case, I also allowed a partial suspension of the sentence by nine months on condition he commit no further crimes punishable by imprisonment for a period of two years.

[6] Of relevance here also is Salote Latu CR5/13. Over the same period of two years, she pleaded guilty to embezzling $15,141.69. At the time of her arrest, she was a senior officer with the Bank at Eua. She had been working as a foreign teller when the frauds arose. She also was a first offender, had a strong church background and support from the Church. She was sentenced also to 2 years imprisonment with the final 12 months in her case suspended on condition she commit no further crimes for a period of 2 years.

[7] In each case, the offending had been systematic and deliberate over a significant period of time. What distinguished however, those offenders from the present offenders was their early guilty pleas and their acceptance without qualification of responsibility. In this case, as I have indicated all, apart from Mr Kaufusi, who entered a very late plea after the Crown case had concluded, elected to plead their innocence. I considered that, although there may have been a very small number of transactions which the Crown could not sustain, there was a little if any serious challenge to the allegation of systemic dishonesty. What challenges there were seemed to me to be rather by way of suggestion that the defendants may have made corrections to log entry statements, in a way which did not reflect the orthodox method of reversing entries or that other employees were involved in these frauds. In my judgment, having heard a great deal of evidence from the bank's principal witness, an auditor, over several days I dismissed these connections. Unlike the position where the offenders had pleaded guilty, I was able to more fully consider all the evidence and better appreciate the degree of dishonesty demonstrated, and the calculated and systemic manner in which their dishonest objects had been achieved.

[8] The Crown had delivered to the prisoners, at the committal, sufficient if not all the evidence they required to make an informed judgment about their guilty or otherwise. In so far as they disputed quantum, they were in a position to have resolved this with the Crown before the trial commenced. Instead, they essentially put the Crown to proof in a lengthy trial and all, aside from Mr Kaufusi, gave evidence. I did not find their explanations at all convincing, and nor did I have any doubt about the reliability of the Crown case against each and found so accordingly.

[9] A common position taken by Mr Niu SC for his clients was that the Bank in failing to audit as comprehensively as it might otherwise have done over a lengthy period, had contributed to the situation in which these employees found themselves. He contended that his clients had in effect in taking up employment with the bank fallen into a trap because other more experienced employees had exploited them or seduced them into joining in the fraud. In a sense, he claimed they were victims also directly of the more experienced employees, and also the bank's failure to audit and expose the fraud earlier. I have considered this argument and, although I accept that initially there may have been some seduction or pressure even to become involved, I reject this argument as justifying any real mitigation, although it my to some degree explain their errant conduct. In each case, the offender was a reasonably intelligent person, (Ms Latu had qualifications in accounting) and all must have appreciated that deception, falsification of foreign exchange rates and log entries were very dishonest acts. Each participated frequently and in each case there were sizable frauds. I do not accept that they can now blame the bank for their position, nor any pressure placed on them by other employees for their collusion. I concluded they were willing participants, and their failure now to accept this tends to detract from their late acceptance of responsibility. Indeed, It is not altogether surprising that the bank did not discover the fraud earlier. The bank had good reason to trust the integrity of its employees who were people with some education, ability and former good character. The method of perpetrating the frauds, (falsification of rates of exchange and teller log entries), was quite sophisticated, and not immediately obvious. Only when it seems an employee eventually did reveal what was happening did the bank appreciate that it had a major problem.

MO'UI LOKETI

[10] As for the offending, Ms Loketi participated as a teller in about 30 transactions over a period between 2nd July 2009 and the 24th August, 2011 involving $12,303.79. I have no doubt she well understood she was stealing from the bank, and possibly justified this in her mind because other tellers were also engaged in this dishonest activity. I have considered her position. She is a first time offender aged, 27 from a large family with a young child who lives with her parents, who have suggested the child may be suffering from her absence, which is sadly a consequence, if so, of her offending. The probation report spoke well of her; as do referees from the Church and a town clerk. She had a promising education and had some tertiary education for a short time before joining the bank. Although the money she stole was the lowest of the offenders, nevertheless the transactions spanned a period of two years. I note that whilst some of the transactions were for smaller amounts, three of the transactions were $1000.00 or above. The paramount sentencing consideration I have to apply, as with the other offenders, is her repeated breach of trust, and deterrence of this kind of offending. I consider, applying the case of Salote Latu CR5/13, who pleaded guilty to a not dissimilar amount, that an appropriate starting point for her is two years and 3 months imprisonment. From this, I deduct 6 months for her previous good character. Her sentence is accordingly one of one year and nine months imprisonment backdated until the time she went into custody. On the false accounting charge, I sentence her to 9 months imprisonment and I make this concurrent with the sentence I have imposed on the embezzlement count.

[11] I turn to the issue of whether I should suspend any part of this sentence. She has shown little in the way of contrition, only belatedly acknowledging her dishonest actions. Having said that, she is young and a first offender, and she may have been seduced or initiated into committing the crime by other employees and free of those associations, may well be rehabilitated. Her parents have suggested she is repentant. I accordingly suspend the final 6 months of her sentence on condition that she commit no further crimes punishable by imprisonment for a year.

FIFITA LATU

[12] I turn now to Fifita Latu. She stole a larger sum also involving 19 transactions, between the 22nd June 2011 and the 3rd January 2012. Some of those transactions involved substantial sums of money, in total $30, 917.60. She is aged 24 and recently married. She graduated with a diploma in accounting studies in 2009, so she must have well understood the seriousness of what she was doing. Again, I suspect in part she fell victim to the seductive influence of others around her who were engaging in this fraud, but she would have known better. She also now states she accepted the convictions and only pleaded not guilty because she disagrees with the amount of money that was stolen. I do not accept this latter explanation. I find her apology like Ms Loketi both belated and convenient in this regard. However, it is at least some acknowledgement of responsibility for her criminal offending. She also has support from the community and I refer to references filed, in this regard from a Church leader and town officer, which have been translated for me. The Church leader would suggest she has repented of her crimes, but against this are the qualifications to which I have made reference.

[13] Again, the paramount sentencing consideration is the breach of trust. Applying To'a where over $25,000 was stolen, I would in her case set a starting point of two years and 9 months. For her previous good character, I would reduce this also by 6 months making her sentence two years and 3 months imprisonment to be backdated to the time she was remanded in custody. On the false accounting charges, I sentence her to 15 months imprisonment to be served concurrently with the embezzlement charge.

[14] The comments I made about a suspended sentence in relation to Ms Loketi apply also to Ms Latu. Taking into account her references, however, I suspend, the final six months of her sentence also on condition she commit no further crimes for a period of one year.

SIONE MATAFAHI

[15] In relation to Sione Matafahi, between the 7th April, 2010 and the 3rd August, 2011 he embezzled $30,419.12 in about 20 transactions. In his case, quite large sums exceeding in some cases $2000.00 were stolen. No explanation was given as to how these moneys were applied.

[16] I consider again that he is a person, who well knew that what he was doing was wrong, although he chose in his evidence to blame the bank for overworking its staff. He is married with one young child. His wife supports him and asks the court for mercy. He also claims that the amount he stole only amounted to two thousand dollars, which I do not accept, at all. He also maintains he only pleaded not guilty because he considered the amount alleged to be embezzled to be excessive. I see little or no contrition at all. Indeed, I detected a certain arrogance about him when he gave evidence. He was less well educated that the others and is being supported by his wife.

[17] I sentence him to the same sentence as I did with Ms Latu, namely I set a starting point of two years and nine months and I allow him 6 months for his previous good character, making a sentence of two years and three months imprisonment backdated to the time he was remanded in custody. I also sentence him to 15 months imprisonment on the false accounting charge to be served concurrently with the embezzlement charge.

[18] I do not see any significant reason to suspend any part of his sentence either. He has displayed little contrition and shows little apparent acknowledgment or insight into the seriousness of his offending, denying it seems to his probation officer that he embezzled more than $2000 which I do not accept, as I have said. Mr Niu pointed out his offending seemed to stop after he had formed a relationship. It seems possible with the assistance of his wife, he will rehabilitate. This was his first offending, and I allow him the final 4 months of his sentence also to be suspended on condition that he commit no further crimes for a period of 12 months.

TAVAKE KAUFUSI

[19] Mr. Kaufusi is aged 33. Between the 17th January 2008 and the 30th June, 2011 he embezzled $41,301.03. He stole money and falsely made entries on about 48 occasions. His is the most serious of the offending before me now. At the time he was dismissed, he had been appointed to the position of a chief cashier and was being paid well for his services. This suggests the bank held him in high regard. He joined the bank in 2006 after a promising school and later had a University career before he left University, after three years of study, it seems without a formal qualification to get married and work, to support a family. He has five children. There have been a large number of references from his family and others such as the Church detailing their support for him, pointing to good aspects of his character and requesting leniency.

[20] Mr Kaufusi was plainly well trusted by the bank. Plainly, aside from this offending, he would appear to have been competent. Equally plainly, however, he abused that trust. His wife asks for mercy for him. There are a number of other quite moving letters in support that I have read. He seems, on his admission, to have spent the money on alcohol and social activities. I suspect this was something of a pattern for some of the money stolen by employees, but the larger sums stolen would suggest that there may have been other motives in some of this offending, although no explanation has been given by any of the offenders about this. He seems to now accept responsibility for his actions and chose to plea guilty, albeit very belatedly, at trial. He is doing his best to support his family by farming activities and has taken on it seems a managerial role, in that regard. A considerable part of the lengthy Crown case, however, and the audit evidence related to proof of his embezzlement, which was systematic and over a long period.

[21] From reading the probation report and references, it appears he does accept responsibility for what he has done, and family members have assisted to pay back the bank. Mr Niu submitted to me that I should fully suspend the entirety of his sentence because family members had reimbursed the bank. I do not accept that I can take that approach bearing in mind the seriousness of his offending, and the systemic nature of it. Although not involving suspension, R v Pickering [1985] 1 NZLR 7 is a case in New Zealand involving serious breaches of trust by a solicitor and embezzlement of a large sum of money. Although the money was paid back by Pickering, an appeal against the sentence imposed was rejected by the Court of Appeal who laid emphasis on the lengthy, systematic course of deception and theft motivated by greed for the appellant's own benefit. It would seem, however, that sensibly restitution should be a factor that can be taken into account both in mitigation and on the issue of suspension. I refer also to Kofutu'a v R [2010] Tonga LR Rep120 where one of the factors the Court of Appeal advanced for reducing a very lengthy sentence for manslaughter was the fact that family members had paid restitution to the family of the deceased. I intend to recognise the fact that the money has been repaid, and will take that also into account also by the suspension order I make but I do not accept that restitution should involve a fully suspended sentence, nor given the serious nature of the offending can it be taken as more than a factor in mitigation, although one that should be recognised in a meaningful and practical sense. As the Court said in Pickering, this case involved a lengthy and systemic course of deception and theft, and further it involved a very belated plea of guilty, with the Crown being put to proof on a substantial number of transactions.

[22] In the case of Mr Kaufusi, whilst he is not as serious as Ms Cocker where I set a starting pint of four and half years, his offending was objectively still very serious, systemic and dishonest. He completely duped the bank who promoted him to a chief cashier, as I have said. He must have been a reasonably influential figure in the overall deception which took place over a number of years. An appropriate starting point, in my view is 3 years 9 months imprisonment. However from this, I allow a figure of 13 months by way of mitigation of that starting point to reflect his very belated guilty plea, the fact that his family have repaid, the seriousness of his repeated offending and his breach of trust, however, remains.

[23] Accordingly, the sentence I impose upon him is 2 years and 8 months imprisonment to be backdated to the commencement of his remand in custody. For the false accounting, I sentence him to 18 months imprisonment to be served concurrently with the embezzlement charge.

[24] In his case, because he has accepted it would seem responsibility for his actions, has pleaded guilty albeit belatedly, and has obviously had to call on family to assist to repay the bank, a humbling experience in itself, I consider he has sufficient awareness of his offending to be considered a good prospect for rehabilitation. He has I am told already taken steps to attempt to maintain he and his large family by plantation farming. His direct assistance in that will obviously be limited for some time, but that is a consequence of his offending. I suspend the final year of his sentence by 9 months on condition he commit no further crimes for a period of two years.

DATED: 23 APRIL 2014
J U D G E