About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Kwazulu-Natal High Court, Pietermaritzburg
SAFLII
>>
Databases
>>
South Africa: Kwazulu-Natal High Court, Pietermaritzburg
>>
2012
>>
[2012] ZAKZPHC 50
|
|
S v Kwatsha (CC 65/2011) [2012] ZAKZPHC 50 (7 August 2012)
17
SENTENCE
REPORTABLE
IN THE KWAZULU-NATAL HIGH COURT, PIETERMARITZBURG
REPUBLIC OF SOUTH AFRICA
SOUTHERN CIRCUIT LOCAL DIVISION
CASE NO: CC 65/2011
RAMSGATE
DATE TYPED: 7 AUGUST 2012
In the matter between:
STATE
versus
THANDO KWATSHA
BEFORE
THE HONOURABLE MR JUSTICE NDLOVU
SITTING WITHOUT ASSESSORS
HEARD AT RAMSGATE
JUDGMENT DELIVERED ON 21 JUNE 2012
SENTENCE DELIVERED ON 24 JULY 2012
JUDGMENT ON LEAVE TO APPEAL DELIVERED ON 24 JULY 2012
JUDGMENT
(21 JUNE 2012)
NDLOVU J
The accused was arraigned on thirty-seven counts of
fraud involving the total sum of R5 955 000.00. The details
of these
charges are set out in the indictment. The charges were read
with the provisions of section 51 (2) of the
Criminal Law
Amendment Act 105 of 1997
.
The accused was legally represented by Mr M Chetty.
Upon such arraignment the accused pleaded guilty to all thirty-seven
counts of fraud. Mr Chetty confirmed that all these guilty
pleas were
in accordance with his instructions and thereupon handed up a
statement in terms of
section 112
(3) of the
Criminal Procedure
Act 51 of 1977
, which set out the plea explanation amplifying the
guilty pleas of the accused. He read out into the record the
statement, which
was duly translated to the accused in the isiXhosa
language, being the language in which the accused elected to conduct
the proceedings.
The accused confirmed the correctness of the
contents of the statement and he confirmed that it was indeed his own
statement. He
also confirmed that the signature appearing on the
statement was his own. The Court admitted the statement and marked it
Exhibit A.
Ms Jacobs, who appeared for the State, confirmed that the statement
of the accused was indeed in accordance with the State’s
case
and that on that basis the State was accepting the accused’s
plea explanation.
I have considered the statement myself in relation to the pleas that
the accused tendered and both the elements of the crime as
well as
the alleged facts in the indictment. Having done so, I am satisfied
that the accused is admitting all the elements of the
crime of fraud
as well as the alleged facts contained in the indictment.
Accordingly –
THE ACCUSED IS FOUND GUILTY AS CHARGED ON ALL THIRTY-SEVEN COUNTS
OF FRAUD INVOLVING THE SUM OF R5 955 000.00
.
SENTENCE
(24 JULY 2012)
NDLOVU J
On 21 June 2012 the accused was convicted, on his
plea of guilty,
1
of 37 counts of fraud involving the total sum of R5 955 000
2
,
upon the Court being satisfied of his tendered written plea
explanation
3
that he was, indeed, guilty as charged. The charge was subject to the
provisions of
section 51(2)
of the
Criminal Law Amendment Act
4
>.
The
modus operandi
whereby the accused misrepresented the
true state of facts to the 37 complainants and to the prejudice
of both the complainants
and Standard Bank (the Bank), in the
commission of the crimes concerned, is clearly set out in
paragraphs 3 and 4 of the preamble
to the Indictment which, for the
sake of convenience, I propose to repeat:
‘
3.
Whilst employed as (financial planner) at either the Kokstad, Ixopo
and Matatiele branches (of Standard Bank), the accused interacted
with the complainants herein and misrepresented to them that the
amounts invested by them will be deployed to approved investment
companies within the Standard Bank group.
4. The accused however deployed
the money paid in by the complainants herein to Messin Projects CC,
which account is operated by
an associate of the accused and not one
of the approved investment companies within the Standard Bank group.’
In mitigation of sentence the accused elected to give evidence and he
furnished his personal particulars. He is 38 years old currently
resident at 9283 NU3 Mdantsane in East London, Eastern Cape, with his
mother and younger brother. He has his own property registered
both
in his name and that of his estranged wife who left him together with
their two minor children aged 7 years and 12 months,
consequent upon
the accused’s arrest on this matter. At the moment their
Kokstad home is being rented out.
The accused holds a tertiary education qualification – that is,
a national diploma in inventory and stores management. He
had worked
for the Bank as financial planner since 1 October 2001. He was based
in Kokstad but also serviced the Bank’s branches
in Matatiele
and Ixopo. His duties mainly involved selling life insurance and
investment products, long and short term. In this
regard, he gave
advice to the Bank’s clients who came to him for service. The
Bank’s approved and associated investment
companies were
Stanlib and Liberty Life. The accused further told the Court that he
did not have a basic salary and that he earned
his income from an
average monthly net commission of R15 000 which he received from
the Bank. He was dismissed from work as
a result of this case.
He then sought to explain that he committed these crimes through the
influence of his father. He told the Court that in or about
April
2008 just before the offence referred to in count 1, his father who
was then employed by a sorghum breweries company in Midrand,
Gauteng,
contacted him and requested an amount of R100 000 which the
accused responded, saying he did not have. His father
then introduced
to him the existence of Messin Projects CC in which he (his father)
said he was involved with a certain other lady
partner whose name was
also given to the accused. The accused said his father then suggested
to him that he should get his clients
to invest their funds at Messin
Projects, instead of the Bank’s approved investment companies,
saying that the clients would
get a more lucrative interest return by
investing with Messin Projects. His father supplied him with the
banking details of Messin
Projects into which the accused would
deposit or transfer the clients’ investment funds.
His father had also told him that he (his father) was owed in the
region of R2 million by Industrial Development Corporation (the
IDC)
for which his father’s business had rendered security services
under a tender contract. According to his father, certain
officials
at IDC who had to process the R2 million payment, were demanding an
amount of R100 000 (which appeared to be bribe money)
in order for
them to expedite the processing of his father’s payment. This
was the sum of money which his father initially
asked for from the
accused. His father had promised that the money would be repaid after
a week. However, when that did not happen
his father told him that
the IDC officials were demanding more money and that the accused had
to get that from other clients, which
the accused then did. He said
he kept on believing that his father would eventually ensure that the
clients’ investment funds
would be paid back.
The accused said he had trusted and respected his father as someone
who had never committed a wrong and he had believed in him.
As a
result, he had then transferred, or caused to be transferred, the
clients’ investment funds into the account of Messin
Projects,
as alleged in the Indictment.
He said he started encountering a problem in or about March 2009 when
Mrs CN Conana the complainant in count 5, who had invested
R200 000,
requested a refund of her money. However, the refund was not possible
because the accused had transferred the money
to Messin Projects
account, although he had told Mrs Conana that her money would be
invested on an open account with Stanlib. Confronted
with this
problem, he had then phoned his father and informed him that there
was a client who wanted her money back, which was
R200 000. His
father said he and his business partner would try and get the money
paid back soon. However, that did not happen.
In the meantime Mrs Conana kept on coming to the Bank asking for her
money from the accused. Out of fear that the issue would probably
come to the attention of the Bank authorities, the accused decided to
call in another client whom he knew had about R240 000
in her
estate account. That was Mrs PZ Langa, the complainant in count 7. He
advised her to take her money out of the estate account
and invest it
with Stanlib, to which the unsuspecting Mrs Langa agreed. Then, on 13
March 2008, instead of doing what he had undertaken
to Mrs Langa he
would do, the accused transferred her funds, in the sum of R210 000,
into the account of Messin Projects. In other
words, even at that
stage, notwithstanding Mrs Conana’s urgent demands, the
R210 000 which the accused obtained from
Mrs Langa, was not used
to refund Mrs Conana of her R200 000, but was again transferred
and paid into Messin Projects account.
The accused admitted that the same
modus operandi
continued,
on the dates mentioned in the Indictment, until the fraudulent
transaction on 22 January 2010 (count 37) proved
to be the final
straw. This was after the complainant, Mrs Mahlawe, suspected that
something untoward had occurred and she reported
the matter to the
Bank authorities, which resulted in the arrest of the accused shortly
thereafter. He said only three of the 37
clients were paid back their
monies by Messin Projects.
The accused’s spiritual adviser, Pastor Cecil Hemero, was
called by the defence to testify. He confirmed that the accused
and
his wife were members of his church, The Power of Love Church based
in Kokstad and that they regularly attended the church
services. He
told the Court that the accused came and confided to him that he was
having a problem at work which the accused described,
referring to
this incident. The pastor said he had also impressed on the accused
that the matter was serious indeed. The accused
had further told him
that one of the clients had sought to cancel her investment with the
Bank and wanted her money back, which
was unfortunately not
available. (This client was apparently Mrs Conana.) The pastor told
the Court that he had then advised the
accused to come clean to the
authorities with respect to what he had done.
The State called the Bank’s forensic investigator, Clifford
Michael Uppink. He had been in the employ of the Standard Bank
for
some 23 years, of which 14 years as a forensic investigator. He
told the Court that after the Bank received the complaint
from Mrs
Mahlawe, he was mandated to investigate the matter. During the course
of his investigation he interviewed the accused
who admitted to him
that he had indeed transferred the clients’ funds to Messin
Projects without the knowledge and authority
of the clients. The
accused had then signed an acknowledgment of debt with the Bank
whereby he undertook to repay the money. However,
no such repayment
was forthcoming. It would appear, however, that the accused was
arrested shortly thereafter.
Mr Uppink further testified that the Bank staff at all three branches
(that is, Kokstad, Matatiele and Ixopo) were extremely shocked
on
learning the news of the accused’s arrest, given the fact that
he was highly respected by his colleagues, due to his position
in the
Bank. He was regarded in a more senior level than the average Bank’s
front staff.
The witness had also interviewed most of the 37 complainants. He said
it appeared that most of the invested funds consisted of
pension
monies either of the clients’ deceased spouses or the clients’
own pensions. Most of the complainants were
elderly people, about 90%
of whom were unsophisticated and from rural areas. The Bank’s
analysis showed that the deposits
were their life savings which were
invested to secure their future.
Mr Uppink further stated that the Bank had, in the meantime and on a
goodwill gesture basis, taken a decision to refund all the
clients
who came forward and submitted their claims for refund. However, they
were only refunded their initial investments without
interest. The
Bank would consider the issue of interest after the finalisation of
this case. Thus far the Bank had written off
some R5,1 million which
was used to pay the clients.
The witness further pointed out that fraud and theft were very
prevalent in the banking industry, in that the current statistics
revealed that during the last financial year the banks, generally,
lost an estimated R2.5 billion through fraud and theft,
which
included cybercrime and card theft. Recovery of stolen money through
these crimes was usually very difficult.
He further told the Court that, as a result of this incident, the
Bank’s reputation was certainly impacted negatively in
the
Kokstad, Matatiele and Ixopo areas. The Standard Bank brand in those
areas was severely damaged in that the confidence which
the people
had of Standard Bank had been severely tarnished. In fact, the
witness was not even sure whether any of the 37 complainants
had
reinvested their monies with Standard Bank after their reimbursement,
which was effected only after a year since the matter
was
investigated.
Under cross-examination, Mr Uppink confirmed that during his
investigation he examined the accused’s personal account with
the Bank and noticed that there was insignificant credit balance
therein, although he could not remember how much it was. The witness
also conceded that this particular type of bank fraud (i.e. committed
with this typical
modus operandi
) was not a regular
occurrence.
Mr Chetty, in his address in mitigation, asked me to find that there
are substantial and compelling circumstances to justify the
Court’s
departure from the imposition of the prescribed minimum term of
imprisonment. He submitted that the mitigating factors
included the
following:
The accused is a first offender.
He was influenced by his father to commit the crimes. In this regard
he referred me to the decisions in
S v Flannagan
5
and
DeSousa v The State
6
.
The
modus operandi
in the commission of the crimes was
unique.
The accused pleaded guilty and thus showed remorse.
He did not acquire any personal gain from the crimes.
He agreed to assist the police with their further investigations.
However, Mr Chetty conceded that the crime was very serious and that
a term of imprisonment was the only suitable sentence. However,
in
the light of the mitigating factors he submitted that the Court
should still find the presence of substantial and compelling
circumstances.
Ms Jacobs submitted that the only mitigating factor in favour of the
accused was that he was a first offender and that this factor
was far
outweighed by the aggravating circumstances of the case. She asked
the Court to find that there were no substantial and
compelling
circumstances present.
As Mr Chetty correctly conceded, the crime of fraud is very serious,
more so that it involved such a large sum of money. Considering
the
nature and magnitude of the crimes I am not persuaded to accept that
the mitigating factors alluded to by Mr Chetty justify
the extent of
the leniency that Mr Chetty has implored me to show in terms of
sentence.
Whilst traditionally a first offender should be kept out of prison,
it is not necessarily so with respect to serious crimes
.
In
S
v Krieling and Another,
7
the Appellate Division (per Smalberger JA) stated:
‘
While
it is a salutary principle of sentencing that a first offender
should, as far as possible, be kept out of prison, it
is well
recognised that in appropriate cases first offenders may, and
indeed should, be incarcerated. Whether or not imprisonment
is
indicated depends essentially upon the facts of each particular case.
It is true that imprisonment will cause the appellants
great
hardship. It will effectively terminate their careers, they will
probably lose their homes, their families will unfortunately
suffer
and they will be exposed to all the negative influences of
prison … One is not unmindful of these considerations.
No
court would deliberately seek to harm a convicted person or cause him
undue hardship – no enlightened system of justice
would
tolerate that. But harm or hardship may be the unavoidable
consequence of an otherwise fair and proper sentence. A balanced
approach to sentencing requires that not only the appellants'
personal circumstances and the potential hardship to them be given
due weight, but also the nature of their crime and the interests of
the community.’
In
S v Holder
8
the Appellate Division (now the Supreme Court of Appeal) emphasised
that the approach that imprisonment is only justified in certain
cases cannot be accepted and is a limitation which does not exist in
the meting out of punishment. Any serious offence, irrespective
of
the nature thereof, can lead to imprisonment and imprisonment is
sometimes the only appropriate sentence which ought to be imposed.
9
In the application of the principle that imprisonment ought to be
avoided, the punitive element of punishment must, in serious
offences, of whatever nature, come to the fore and be properly
considered, if punishment is to have any meaning in the criminal
law.
10
In the present case the accused committed 37 counts of fraud
involving approximately six million rand against mostly elderly and
unsophisticated rural people who had placed their trust and
confidence in him. Mr Chetty has conceded that custodial punishment
was the only suitable sentence. In my view, it is indeed so. On this
basis, the consideration of correctional supervision or a
suspended
sentence as an option simply falls away.
I am certainly not convinced that the accused’s conduct in
committing all 37 counts of fraud was as a result of direct influence
by his father, which he could not resist. The facts in the present
case are, in my view, clearly distinguishable from
Flannagan
and
De Sousa,
relied on by Mr Chetty. In
Flannagan
the
appellant, a female bank clerk, was convicted of one count of fraud
involving R8,5 million which she fraudulently transferred
from one
account to another. It was established that she had been forced by
her husband to commit the fraud. She was 31 years old
and a mother of
three children. She was sentenced to seven and a half years’
imprisonment, of which two years was conditionally
suspended. On
appeal, the sentence was reduced to 4 years’ imprisonment in
terms of
section 276(1)(i)
of the CPA.
In
De Sousa
the appellant was convicted of 13 counts of fraud
involving the sum of R1.228 million. The trial Court found that there
were substantial
and compelling circumstances present and sentenced
her to seven and a half years’ imprisonment. She was 32
years old
and a first offender. The facts established that she
had committed the crimes ‘
at the instance of her
boyfriend who preyed on her vulnerabilities’
11
and that she ‘
had assisted her boyfriend to implement a
fraudulent plan.’
12
She only benefitted R90 000 from the crime and she had
repaid that amount. She co-operated fully with the police and
had
shown genuine remorse. There was also little likelihood that she
would commit the crime again. On appeal, her sentence
was
reduced to four years’ imprisonment.
It seems to me there is simply no comparison between the two
decisions and the present instance. In fact, I do not even appreciate
on what basis Mr Chetty, with respect, referred to
Flannagan
because the question of influence, in the context relied on, clearly
did not arise there. In that case the accused
was
not just influenced, but forced by her husband to commit the crime.
Further, there was only one count of fraud involved, as
opposed to 37
counts in this case. Similarly, in
De Sousa
the Court found
that the accused’s boyfriend had preyed on her
‘vulnerabilities’ and further that she had at
least
repaid the amount of R90 000 which she had benefitted from
the crime. Such facts or considerations are not present
here.
In any event, any influence which a husband may have over his wife or
a boyfriend over his girlfriend, on the one hand, cannot
be equated
or compared with the so-called influence by a father living in
Gauteng over his 36 year old, married, sufficiently qualified
and
independent son living with his own family in the KZN south coast
town of Kokstad. The accused was a sophisticated and intelligent
adult person. It was highly unlikely that he could so easily, without
more ado, submit to any influence, from whomsoever, to commit
a
serious crime such as this one. The accused’s version in this
regard was so highly improbable that, on questioning by me,
he
conceded that if he were to be placed in the position of a listener
to his story he would himself not have believed the veracity
thereof.
In short, the accused’s feeble explanation about his father
influencing him in this regard is so simplistic and
ludicrous that it
falls to be rejected outright as a clear fabrication. It can only
exist as a figment of his imagination. I do
not need to have any
opposing evidence to controvert it.
The fact that the accused committed these crimes using a
modus
operandi
that may be described as unique is, to my mind, simply
immaterial. The upshot of the matter is that this is bank fraud and a
white
collar crime, which is quite serious and prevalent in the
country. In
De Sousa
the Court remarked that ‘
white-collar
crime had reached alarming proportions and its corrosive impact upon
society was all too obvious.’
13
Whilst it is noted that the accused was convicted on his guilty plea,
which is usually regarded as a sign of remorse, this is not
necessarily always the case. The accused did not, once the matter
appeared before court, indicate his intention to confess to the
crimes. Instead, the contrary was shown when he chopped and changed
his legal representatives and caused the trial not to proceed
on its
first set down but instead postponed more than once at his own
instance. A number of witnesses were arranged and secured
by the
State to come to Court and testify and this was obviously done on the
assumption that the accused was not admitting his
guilt. Had he
indicated otherwise at the outset, all those arrangements would not
have been made.
The accused took some two and a half years to make up his mind to
plead guilty. In this situation I am inclined to conclude that
his
tendering of a guilty plea was more to do with his realisation of the
overwhelming and watertight case against him than his
showing of
genuine remorse.
It is not uncommon that in some, if not many, cases the disposal or
whereabouts of the proceeds of crime involving monetary assets
permanently remains the secret of the perpetrator, who would rather
choose to go prison and serve whatever sentence than to reveal
the
secret. In any event, it seems to me that in such situation where the
stolen money is never recovered by the owner, this factor
should only
serve as an aggravating feature.
If the accused is genuinely willing to assist the police in their
further investigation of this matter it is strange why the police
are
apparently still not in possession of evidential material enabling
them to effect further arrests or, at least, to recover
something
from the stolen loot. As stated, this matter has now taken some two
and a half years already without the accused’s
professed
assistance being seen to bear fruit. Instead, he decided to flee
Kokstad and went to stay with his mother in East London
against the
knowledge and approval of the investigating officer as it was
required in terms of his bail conditions. In any event,
from what he
told the Court about this case, it is inconceivable what other
information, he would want the Court to believe, he
could assist the
police with.
In my view, this is a typical case where the consideration of
rehabilitation was to give way to that of retribution and deterrence.
In this regard, I am reminded of the remarks by Nugent JA in
S v
Swart
14
where the learned Judge of Appeal stated the following:
“…
[I]n
our law retribution and deterrence are proper purposes of punishment
and they must be accorded due weight in any sentence that
is imposed.
Each of the elements of punishment is not required to be accorded
equal weight, but instead proper weight must be accorded
to each
according to the circumstances. Serious crimes will usually require
retribution and deterrence should come to the fore
and that the
rehabilitation of the offender would consequently play a relatively
smaller role.”
I agree with Ms Jacobs’s submission that the only mitigating
factor may be that the accused has a clean criminal record.
However,
I do find that the following constitute aggravating features in this
case:
36.1 This fraud involves a large sum of money in aggregate, namely,
approximately R6 million.
36.2 The crimes were not committed on the spur of the moment, but
over a period of about two years and on 37 different occasions
and
against 37 different complainants, during that period.
36.3 The crimes were committed against unsuspecting Bank customers
who were mostly rural and unsophisticated elderly people who
had
placed their trust and confidence in the accused, which the accused
so mercilessly abused.
36.4 The accused also breached and abused the position of trust and
confidence which the Bank, as his employer, had placed in him.
36.5 His conduct had damaged and tarnished the Bank’s image and
reputation not only with the 37 victims but generally in
the Kokstad,
Matatiele and Ixopo areas.
36.6 The stolen money was never recovered.
36.7 The fact that the stolen money could not be traced at the
accused’s door is not, in my view, necessarily proof that
the
accused acquired no personal gain from the proceeds of these crimes.
36.8 Despite Mrs Conana having confronted the accused for her refund,
the accused did not thereafter stop perpetuating his crimes.
It is
likely therefore that had he not been arrested he would have
continued doing so indefinitely.
36.9 Finally, this kind of crime does not only affect the banking
industry, but it has a huge negative impact on the economy of
the
country.
In my finding, the aggravating circumstances far outweigh the
mitigating factors. Accordingly, substantial and compelling
circumstances
as envisaged in
section 51(3)
of the
Criminal Law
Amendment Act 105 of 1997
do not exist in this case.
In the result, the accused is sentenced to undergo 15 (fifteen) years
imprisonment. All counts are taken as one for the purpose
of
sentence.
JUDGMENT
(24 JULY 2012)
APPLICATION FOR LEAVE TO APPEAL
NDLOVU J
An application has been made on behalf of the accused
for leave to appeal against the sentence imposed by this Court and an
application
for bail pending the appeal.
Mr Chetty has submitted that the Court ought to have found that
substantial and compelling circumstances
do
exist on the basis of the mitigating factors that the Court alluded
to, if those were to be taken cumulatively. The
State
opposes the application.
The test in an application of this nature is whether there are
reasonable prospects of success on appeal - in other words, whether
another court may come to a different conclusion then the one reached
by the Court.
I have considered the matter. In my view, there are no reasonable
prospects of success on appeal in this matter.
Accordingly –
THE APPLICATION FOR LEAVE TO APPEAL AGAINST THE SENTENCE IS
REFUSED
.
THAT BEING THE CASE, THE APPLICATION FOR BAIL PENDING APPEAL
NATURALLY FALLS AWAY
.
APPEARANCES
FOR THE STATE
ADVOCATE (MS) S JACOBS
ON BEHALF OF ACCUSED
MR M CHETTY
INSTRUCTED BY THE LEGAL AID BOARD
INTERPRETER
MR MADLEBE
1
Section
112(1)(b) of Act 51 of 1977 (the CPA)
2
The
detailed particulars of all 37 counts appear in Schedule ‘A’
to the Indictment. The amount per count ranges between
R40 000
and R500 000.
3
Section
112 (3) of the CPA. The written plea statement was admitted and
marked as Exhibit ‘A’.
4
Act
105 of 1997
5
1995
(1) SACR 13
(A)
6
[2008]
JOL 22428
(SCA)
7
1993
(2) SACR 495
(A)at 497A. See also:
S v Kulati
1975 (1) SA 557
(EC) at 559A-560H;
S
v Sakabula
1975 (3) SA 784
(C) at 786H-787H;
S v Makkahela
1975
(3) SA 788
(C) at 789F - G;
S v Ceylon
1998 (1) SACR 122
(C) at 123j-124b.
8
1979
(2) SA 70
(A)
9
S
v Holder
, above, at 77H-78A . See also
S v Silimela
1999
(2) SACR (C)
10
S
v Holder
, above, at 74H-75A
11
Par
[9]
12
See
head note
13
par
[11]
14
2004
(2) SACR 370
(SCA) at para 12. See also:
Director
of Public Prosecutions, KwaZulu Natal v Ngcobi and others
2009 (2) SACR 361
(SCA) at para 22;
Director
of Public Prosecutions, North Gauteng, Pretoria v Thusi and others
2012 (1) SACR 423
(SCA).