S V Majiedt (CC 11-2013) 2015 NAHCMD 289 (1 December 2015)

1

REPUBLIC OF NAMIBIA

HIGH COURT OF NAMIBIA MAIN DIVISION, WINDHOEK

JUDGMENT

Case no: CC 11/2013

In the matter between:

THE STATE

and

ESMERELDA MARTINA MAJIEDT ACCUSED

Neutral citation: S v Majiedt(CC 11-2013) [2015] NAHCMD 289(1December 2015)

Coram: LIEBENBERGJ

Heard:16 - 17November 2015

Delivered:01 December 2015

Flynote:Criminal procedure – Sentence – Fraud – Accused pleaded guilty to 396 counts – Prejudice suffered by complainant amounts to N$56 million – Court restating principles applicable to sentencing – Accused suffers from skin pigmentation disorder – Illness relied on to explain commission of crimes – Accused’s health condition a mitigating factor – Accused’s condition to be accorded limited weight – In matters of so-called ‘white-collar crime’ deterrence as objective of punishment emphasised – Direct imprisonment unavoidable – Accused showing genuine remorse – Plea of guilty coupled with contrition a mitigating factor leading to significant reduction in sentence.

Summary:The accused, aged 50 years, pleaded guilty and was accordingly convicted on 396 counts of fraud involving more than N$56 million. The accused worked for a company which sold building material and by way of fraudulent transactions,effected by manipulating the sales system, sold cement to two clients of the company at 30% of the actual cost price. Payments were directly made to the accused which, over a period of five years, accumulated to the sum of approximately N$17 million. The accused had spent all the money and except for two small businesses she had started with the stolen money, she had nothing to show at the time of her arrest. The main reason proffered for having committed the crimes is that the accused suffers from a skin pigmentation disorder called Vitigilo which impacted on her mental health and made her feel stigmatized. In order to boost her self-confidence she spent the money on her appearance and looks, and bought the acceptance of colleagues and friends by treating them and assisting them financially. In sentencing the court considered the triad of factors and principles applicable thereto.

Held, that although the accused’s skin condition was a factor relevant to sentence, it was not the sole cause for the accused to have committing the crimes. There was also an element of greed, therefore,it could not be accorded much weight.

Held, further that the accused’s position of trust bestowed on her in the company, the enormity of fraudulent transactions over a period of five years, the amount involved and the accused’s inability to make restitution,are all seriously aggravating.

Held, further that the accused’s plea of guilty, coupled with a genuine show of remorse, is a mitigating factor weighing heavily with the court which should lead to a significant reduction in sentence.

Held, further that so-called ‘white-collar crime’ has become prevalent in this jurisdiction and the court is entitled to take judicial notice thereof and impose deterrent sentences to deal with this scourge.

Held, further that though the taking together of counts for purposes of sentence should be reserved for exceptional circumstances, the imposition of one composite sentence in the present circumstances is appropriate.

The court having taken together all the counts convicted of, sentenced the accused to 25 years’ imprisonment of which 8 years’ is suspended on condition of good conduct.

ORDER

The convictions are taken together for purposes of sentence and the accused is sentenced to 25 years’ imprisonment of which 8 years’ imprisonment is suspended for a period of five years, on condition that the accused is not convicted of the crimes of fraud or theft, committed during the period of suspension.

SENTENCE

______

LIEBENBERG J:

[1] On 03 July 2015 the accused pleaded guilty to and was convicted on 396counts of fraud committed during the period 31 January 2006 to 31 January 2011, involving the amount of N$56 557 220.19. The accused filed a comprehensive plea explanation in terms of s 112 (2) of the Criminal Procedure Act, 51 of 1977, in which not only she admitted the commission of the offences pleaded, but also comprehensively elucidated her modus operandi, enabling her to defraud her employer, AfriSam Namibia (Pty) Ltd, during the said period. For a proper understanding as to how the fraudulent transactions were actually committed without detection, it seems necessary to paraphrase some aspects of the accused’s plea explanation.The magnitude of the offences committed and the circumstances under which it was done, will also become apparent from the explanation.

Background

[2] At all relevant times the accused was employed by the said company of which the main business comprised the sale of cement throughout Namibia. During 1996 the accused was employed in the Sales Department and was subsequently promoted to the position of Customer Fulfilment Team Leader which brought with it a wide range of responsibilities,inter alia, sales administration, full inbound chain processing and finished goods inventory administration. Rundu Build-It, also trading as Discount Hardware, and Cool Properties, were both clients of AfriSam with whom the accused had dealingsduring therelevant time at Afrisam. In respect of the former the accused had dealt with Daniel Baptista de Jesus, the managing member of Luso Investments CC, who had been indicted as accused no 2 in this case. In respect of Cool Properties she had dealt with Calvin Bezuidenhout, the managing member of CPI Construction, together with his brother Gerhard Albertus Bezuidenhout, accused no’s 3 and 4, respectively. The accused, during the said dealings, informed them that if they were to purchase cement from her directly, she would be able to offer them better discount than what they ordinarily would qualify for. Also, that to qualify for better prices, payments had to be effected in cash and that quantities ordered would influence the price. As a result thereof large orders for cement were placed with the accused which were paid for in cash, as agreed. This obviously meant that these two clients of AfriSam were undercharged, a fact unknown to them. Cash moneys so received were not deposited with AfriSam and, as cover-up, the accused would write off the actual amounts of the orders placed against the freight clearing accounts. Discount Hardware and Cool Properties would then subsequently be provided with invoices of AfriSam.

[3] The accused admitted having manipulated the accounting system of AfriSam to enable the completion of the fraudulent transactions and subsequent deliveries of cement to Discount Hardware and Cool Properties. On each occasion, and after orders were processed for the said businesses, the accused would either divert funds from the AfriSam Freight Clearing Account, or from other customers’ accounts who had made actual deposits into AfriSam’s bank account, to balance out the purchases of the two businesses. Funds were then transferred from the Freight Account to AfriSam’s Cash Account to replenish funds taken from other customers’ accounts which had been used to fund the transactions with Discount Hardware and Cool Properties. The accused further made dummy deposits into the accounting system of AfriSam in respect of the two businesses so that it would appear as if actual cash payments had been made by them, where after the said dummy deposits were reversed once the system had authorised the fraudulent orders and deliveries.

[4] The accused admitted that she had committed fraud as indicated above and by which AfriSam during 396 transactions had sufferedan actual loss of

N$53 020 055.41. During her testimony in mitigation of sentence the accused explained that she surreptitiously had sold cement for her own benefit and charged the buyers only 30% of the actual price. She explained that she did not keep record of moneys paid over to her directly, but estimated it to have generated between N$200 000 and N$300 000 per month. By calculating the percentage charged by the accused on these transactions (30%), she would have received just short of N$17 million over a period of five years.

[5] In respect of a further charge of fraud contained in count 624, on which the accused also pleaded guilty, she admitted having falsified the cement stock records of AfriSam and on diverse occasions stole large quantities of cement which wasthen sold to various customers, using Lu Properties CC as the trading vehicle, and into whose bank account the deposits were made. She admitted having received payments unlawfully channelled through Lu Properties CC for cement sold and delivered, and appropriated such payments for her personal benefit. Again this was done to the actual prejudice of AfriSam to the amount of N$3 537 164.78.

[6] As shown above, the accused over a period of five yearsdeceived AfriSamon hundreds of occasions to its own prejudice, as a result of which itsuffered a totalloss of N$56 557 220.19.

Legal principles applicable to sentencing

[7] It is trite law that in consideration of what appropriate sentence to impose, certain guidelines are of general application. These are normally referred to as the triad, comprising the personal circumstances of the offender, the nature of the offence and the interests of society.[1] The court,at the same time, and regardbeing had to these factors, must consider the objectives of punishment and what sentence, in the light of the particular circumstances of the case, would be suitable and just. It is settled law that the applicable principles need not be given equal weight as the circumstances may be such that it becomes necessary to emphasise one at the expense of the other. This will mainly depend on the facts of each case and the court often needs to balance and harmonise competing factors to arrive at a just sentence. Punishment should fit the offender, reflect the seriousness of the crime, be fair to society and be blended with a measure of mercy according to the circumstances.[2]

[8] Whilst the State did not lead evidence in aggravation of sentence, the accused testified in mitigation and called a clinical psychologist, Ms Mensah-Husselmann, to give evidence on her behalf.

Personal circumstances of the accused

[9] The accused is 50 years of age and the mother of four children, the youngest 14 years of age and still attending school. He currently lives with his father. She also has three grandchildren. Her father passed away when she was still young whilst her mother, who had been living with her, died in 2007. Her marriage of 21 years presented its own problems and whilst in custody awaiting trial in August 2011, she got divorced from her husband.

[10] The accused testified about her health and explained that, since she was seven years old she had been suffering from a skin pigmentation disorder called Vitiligo, an illness known to impact on a person’s mental health. I will return to this aspect of the evidence shortly. The accused said that because of the discolouring of her skin she had been teased since childhood for being different from her peers, and at the age of 27 her skin colour changed to white. In 2006 she was diagnosed with cancer which is currently in remission; whilst in custodyshe had also undergone a hysterectomy. She had her gallbladder removed and, as a result thereof, her metabolism is sensitive to fatty foods. Currently the accused suffers from chronic hypertension and ulcers. During her detention awaiting trial, she had unhindered access to the required medical treatment; though her family mostly provides her in prison with home cooked meals which helps with the particular diet she requires.

[11] As regards her working relationship with AfriSam, the accused testified that she started working for the company in 1997 (then called Namibia Portland Cement) as Administrative Clerk and progressed to the position of Sales Order Clerk. At the time she resigned from AfriSam to join Ohorongo Cement as their Logistics Officer, she held the position of sales team leader. Her main duties were customer order fulfilment and the ordering of stock. At times she acted as Depot Manager and stood in for the company’s accountants and sales representatives. Prior to her joining Ohorongo Cement in February 2011 she gave instructions to Afrisam what to do with her Provident Pension Fund, which, at that stage,was valued at between N$600 000 and N$700 000. These funds, however, to date, have not been paid over to her. She had also been informed that any outstanding performance or profit sharing bonuses were suspended, pending an investigation into the affairs of AfriSam. Previous bonuses paid to the accused during 2010 amounted to approximately N$40 000. Following discussions between her and her new employer, Ohorongo Cement, it was agreed that she would resign and a formal disengagement agreement was signed between the parties on 17 March 2011. The accused was arrested on 04 April 2011 by officers of the Anti-Corruption Commission and remained in custody for a period of 18 months and two weeks, before being admitted to bail in the amount of N$250 000.

[12] As regards the commission of the offences, the accused said she was approached by a school friend of hers, Calvin Bezuidenhout,[3] who told her that his business was experiencing financial difficulties and whether it was possible that AfriSam could sell cement at discount price to him. This prompted her into creating fraudulent transactions whereby large quantities of cement was delivered to Bezuidenhout at only 30% of the cost price. These amounts the accused pocketed. On her own volition she thereafter approached Daniel Baptista de Jesus[4] and offered him the same deal, provided that payment had to be made to her directly. Before the commencement of proceedings the accused exonerated both these persons, claiming that they were unaware of the transactions being fraudulent and to the prejudice of AfriSam. In view thereof the State withdrew charges against both.

[13] The accused had been an employee of AfriSam for about 14 years and described herself as a loyal and hardworking person;this culminated in her having received several performance bonuses and rewards during that period. Sadly, the accused accepted these accolades the time she substantially defrauded the company. Though I find it difficult to believe that the accused currentlycannot remember what her monthly salary at AfriSam was, she set the net amount at approximately N$15 000. Add thereto the moneys paid to her for the cement sold[5] and the income generated from her own businesses[6], then the accused received an astronomical amount every month, more than what she could ever have needed to sustain a proper living. It was the accused’s testimony that she had used part of the stolen money to start small enterprisesin catering and decorating, which she occasioned to be sold off after her arrest. She was criticised by State counsel for not having returned the proceeds thereof to the complainant, instead of using it to maintain herself and cover legal costs. She was not questioned on the amount the sale of these businesses generated.

[14] It is common cause that the accused’s application for legal aid was refused and though it would have been proper and decent for the accused to have offered the proceeds thereof to the complainant as restitution, irrespective of the amount, sight should not be lost of the predicament she had found herself in when she got arrested. She was in custody and like most other persons, likely to have had a household to maintain in her absence. The money was spent to buy food whilst in custody, andused to paylegal costs. Though her actions cannot be condoned nor justified, there seems to me some understanding for the decision taken by the accused if regard is had to the position she was in. Though this would normally constitute an aggravating factor,[7] inthe circumstances of this case, the court, in my view, should not accord it too much weight.

[15] It was conceded that, given the high number of separate incidents of fraud committed by the accused over a long period of time; the amount involved being the highest ever met by the judiciary in this jurisdiction whilst the accused was in a position of trust, areseriouslyaggravating. When asked why she had committed these crimes the accused said that it was partly because of need, but also out of greed. During her testimony in mitigation the accused, in the most harrowing manner, opened up her inner-self to the court and described feelings of rejection she had to endure since childhood because of the skin pigmentation disorder called Vitiligo, she was suffering from. She described how she had spent a lot of the stolen money on herself and that it was important to her to stand out amongst others. Not only did she want to look good, it made her feel good about herself. This is borne out by her having had seven different pairs of glasses to match her outfits. She treated and entertained friends, and even took some of her colleagues on fully paid holidays. Others she helped by paying their household expenses and admitted having bought their friendship and acceptance in that way. She said these so-called friends have all disappeared since her arrest;this made her realise that there are things money simply cannot buy. She had also spent money on her children and to her shame had to admit that it was done with stolen moneyand which she tearfully apologised for.Part of the money was also used to cover medical expenses. The accused said by the time she left AfriSam she had nothing left of the stolen money as all had been spent.