WINDHOEK – A defiant Nico Josea yesterday heard he will spend most of the next 17 years behind bars while his co-convicted got off with fines coupled with suspended sentences when Windhoek High Court Judge Christi Liebenberg concluded the long-running Avid fraud trial.
Josea was heard saying he will appeal the conviction and sentence and will apply for bail pending his appeal.
Judge Liebenberg sentenced Josea to 17 years on the conviction of theft by conversion and two years on the conviction of contravention of the Companies Act. He ordered the two sentences to run concurrently, leaving Josea with an effective 17-year jail term.
The judge sentenced former MP Paulus Kapia, former accountant Inez Gases and Ralph Blaauw, also a former MP, each to pay a fine of N$60,000 or by default three years imprisonment, plus a further two years imprisonment suspended for five years, on condition they are not convicted of fraud during the period of suspension.
Ralph’s wife Sharon got a fine of N$8,000 or alternatively to spend six months in jail for her conviction on a count of reckless trading with intent to defraud, a contravention of the Companies Act.
According to the judge, Kapia, Gases and the Blaauws do not deserve custodial sentences as they did not benefit from the massive fraud that saw the Social Security Commission (SSC) lose N$30 million through an investment with a little-known investment firm, Avid Investments, the brainchild of the late Lazarus Kandara.
The judge said they were unknowing partners in the fraud that was perpetrated by Josea and Kandara with the help of Alan Rosenberg, a South African citizen.
According to the judge no evidence was adduced to show that when they made misrepresentations to the financial managers of the SSC, they did so with the knowledge the funds would be embezzled.
“Their actions went no further than to make substantial misrepresentations to the SSC during the bidding stage of an investment tender by knowingly submitting misleading information and documentation essential to the awarding of the tender. In the process they abdicated their fiduciary duty and responsibilities by consciously allowing and implementing the decisions of a person who, for all means and purposes, was detached from the company,” the judge said and continued: “Each accused individually attributed to the misrepresentations made in order to convince the managers of the SSC in awarding the tender to Avid, in circumstances where they had no intention to fulfil assurances and guarantees given by them during the tender process. “
He added that although the court found that they did not directly gain anything from their fraudulent conduct, their actions and intentions jointly satisfy the elements of the offence of fraud.
As for Josea, the opposite holds true, Judge Liebenberg said. According to the judge, the evidence showed that he, from the onset, was in cahoots with the main perpetrator, the late Lazarus Kandara, with the sole intention to embezzle the SSC investment funds.
“With the assistance of a third person in South Africa by the name of Alan Rosenberg, they devised a scheme in order to create the impression that an alleged investment made with Alan Rosenberg was ongoing, whilst it was not. In the meantime, N$14.9 million of the N$20 million transferred to Rosenberg was paid back into the private account of accused No. 7 (Josea),” the judge said.
He said that in addition, Josea, through his company, Namangol, falsely created a paper trail to give credence to his version of personal loans allegedly made between him and the late Kandara.
The judge further said the most aggravating factor against Kapia, Gases and the Blaauws is that they failed in their duty as directors and should have been more vigilant in dealing with public funds, but instead they abdicated their responsibilities to a person who, unknowing to them, had only one thing in mind and that was to hijack the investment and misappropriate the funds.
The State, before the sentencing, informed the court that they received fresh instructions from the SSC to institute a section 300 application to order the convicted persons to reimburse them for their losses, but after hearing submissions from the State and the defence counsels, Judge Liebenberg barred the State from bringing the application. He said it would not be fair to the defendants to give the SSC another bite at the cherry, especially since they bungled their first attempt.