THE REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
WESTERN CAPE HIGH COURT, CAPE TOWN
CASE NO: CC 50/2010
In the matter between:
THE STATE
and
JOSEPH ARTHUR WALTER BROWN
J UD GME NT: 1 5 MA Y 2 0 1 3
VELDHUIZEN ,J:
[1 ]
Mr Br own yo u ha ve bee n co nvic ted o f two c ri mes o f fr a ud
and it is now my duty to sentence you.
[2 ]
Yo u a re 43 ye ar s o ld. It is a n im po rta nt fa ct tha t yo u ha ve
no p re vio us co nvic tio n o f a ny ki nd . The e vi de nc e s ho ws tha t yo u
enjo yed a goo d upb ri ngi ng. A t a n ea r ly ag e yo u los t yo ur fa the r
whe n he died i n a n a tte mp t to s a ve the li ves o f o t he rs . A d eed fo r
2
whic h he , pos t humo us ly, rec ei ved the W o lra ad Wo ltem ade go ld
cla ss a wa rd . Yo ur mo the r r e- ma r ried a nd b y a ll ac co unts yo ur
ste p- fa ther i s a lso a ma n of c ha ra cter w ho has s et a g ood
e xam p le . Yo ur mo the r , who p ass ed awa y s ho r tly a fter yo ur a r res t
some se ve n ye ar s ago , s ubsc ribe d to the C hri s tia n va lues a nd se t
a g ood e xa mp le to her c hi ld re n i n her e ve r yd a y life . Yo u ha ve two
c hildre n a nd b eca use yo ur wi fe mo ve d to A us tr a lia a nd b eca use
of yo ur b ail co ndi tio ns yo u ha ve no t s ee n the m for the pas t fi ve
year s whic h I ac cep t is pai nful . I a ccep t that yo u wer e s co r ned b y
yo ur frie nds a nd the p ub li c a t lar ge , e ve n b y yo ur c hur c h. Yo u
we re i nca rce ra te d i nte rmi tte ntly for a pe r iod o f ab o ut 8 m o nths .
Yo u ha ve b ee n thro ug h tra uma a nd pe rso na l s uffe ri ng for the pas t
7 years.
[3 ]
Yo u te sti fied tha t yo u were a r res te d o n mo re tha n 190
c har ges . Be fo re us yo u we re i niti ally i ndic ted o n a ll to ge the r ni ne
c har ges . Fo ur co unts of fra ud , two c o unts o f the ft, o ne co unt o f
co ntra ve ni ng se c tio n 1 (1 )( a) o f the Co r r up tio n A ct, No . 94 o f
1992 , o ne co unt o f co ntra ve ni ng s ec tio n 3 (b )(ii )( aa ) a nd /o r (bb )
and/or (cc ) a nd /o r 3( b) (i v) or the P re ve ntio n a nd Com ba ti ng
Corr up t A cti vi tie s A ct, No . 1 2 o f 200 4 a nd a c o ntr a ve ntio n o f
sec tio n 4( a) a nd o r 4 (b) o f the P re ve ntio n o f Orga ni sed Cri me
Act, No . 121 o f 1 998 . On the fac e of i t the se wer e e xtre me ly
serious charges which carry heavy penalties.
3
[4 ]
Conside ri ng the p ub licity whic h yo ur case has recei ve d i n
the me dia, I thi nk i t ap pr opri ate to m ake i t clea r wha t yo u ha ve
no t bee n co nvi cted of. Yo u ha ve not bee n co nvi cted of ha vi ng
sto le n m o ne y fro m i nves to rs o r p e nsio ner s o r tha t yo u de fra uded
the m . Yo u ha ve no t b ee n co nvi c ted of ha vi ng s to le n mo ne y fro m
Fide nti a
or
i ts
s ubsidia ries .
Yo ur
c o nd uct
unde rlyi ng
yo ur
co nvic tio ns ca n i n no wa y b e des cri bed a s a p yra mid sc he me . I
ca nno t o ver em p hasi ze tha t the two co unts o f fra ud that yo u ha ve
bee n co nvic ted o f a re a n e xtre me ly di luted ver sio n of the fr a ud
tha t the i ndic tm e nt a llege s. The s eco nd co unt of fra ud r elates
only to fr a ud a gai ns t the s ha re ho lde rs o f MA TC O, no t a gai ns t
wido ws a nd o rp ha ns . The se two co unts o f fra ud pa le whe n
comp ar ed to the c ha rge s i n the i ndic tme nt. B ut i t has b ee n
accep te d b y the p rose c utio n that yo u ne ve r had the i nte ntio n to
ca use a ctua l pr e judice o r da mag e. Yo u ha ve o nly ad mitte d a nd
bee n fo und to ha ve i nte nded po te ntia l p re judice a nd yo ur mo ra l
blameworthi ne ss must accordingly be judged in the light thereof.
[5 ]
The s ta te te nd ere d the e vi de nc e o f M r Seed at fro m the
Fina ncia l Se r vi ces Bo ard . He wa s r espo nsib le fo r the i ni tia l
inves tiga tio n i nto the a ffai rs of Fide ntia . He te sti fied tha t the re
was am o ngs t other thi ngs a s ho r tfa ll o f app ro xima te ly R4 06 M . His
repo r t was ha nded o ve r to the Di rec to r o f P ub lic P rose c utio ns. If
his fi ndi ng s a re fac tua lly co r rec t the n I fi nd it as to undi ng tha t yo u
ha ve bee n bro ug ht to co ur t o n o nly the ni ne c o unts lis ted i n t he
4
indi ctme nt. I fi nd i t e ve n mo re as to undi ng tha t the s ta te sa w fi t to
accep t yo ur p leas o f g ui lty o n the fac ts s et o ut i n the ad missio n s
yo u made i n te rm s o f sec tio n 220 o f the C rimi na l P roce d ure Ac t,
51 o f 1 977 . If the fac ts re la te d b y this wi tne ss ar e c or rec t the n
some thi ng is so re ly wro ng a nd I ca n o nly thi nk the pr ose c utio n
case has been poorly handled.
[6 ]
Be tha t as i t ma y the fa c ts b efor e m e a re c lea r a nd I ca nno t
se nte nc e yo u o n a ny o the r basis . The S ta te s ubmi ts tha t s ec tio n
51(2 ) (a ) o f Ac t 105 o f 1 997 , ofte n re fe rr ed to as the Mi ni m um
Sente nce s A ct, app lie s to the two co unts o f whic h yo u ha ve b ee n
fo und
g ui lty
a nd
pr ess ed
me
to
imp ose
a
sti ff
ter m
of
s ub jec t
to
imprisonment. The relevant part of this section reads:
‘51(2)
No twiths ta ndi ng
a ny
othe r
la w
b ut
s ubse c tio ns (3 ) a nd (6 ), a regio na l co ur t o r Hig h Co urt
s ha ll se nte nc e a pe rso n who has bee n co nvic ted o f a n
offence referred to in –
(a )
Part II of Schedule 2, in the case of –
(i) a fi rs t offe nde r to i mp riso nme nt for a peri od
not less than 15 years;’
Amo ng s t the offe nce s lis ted i n Pa r t II o f Sc hed ule 2 is the cri me
of fraud ‘involvi ng amounts of more than R500 000.’
[7 ]
On the fra ud des cri bed i n co unt 2 yo u ad mitted tha t mo nthly
sta te me nts o ver a le ng thy pe riod wer e se nt to TE TA a nd tha t
the se s ta te me nts , to yo ur k no wled ge , did no t re flec t the tr ue s ta te
5
of a ffai rs . Yo u admi tted that the r ep rese ntati o ns c o ntai ne d i n the
mo nthly s ta te me nts we re fa lse a nd had the po te nti al to ca use
pre judice a nd yo u r eco nci led yo urs e lf with tha t fa c t. As far as the
fr a ud des crib ed i n co unt 6 is c o nce r ned yo u ad mitted tha t yo u
ind uced MA TCO to e nte r i nto a n a gr eem e nt b y re pre se nti ng tha t
Fide nti a
had
re ad y cas h at ha nd
to
pa y the s ha re ho lde rs .
Altho ug h as s ta ted b y yo u Fide ntia ha d s uffi cie nt ass ets whi c h , i f
liq uid ated , wo uld ha ve be e n s ufficie nt to mee t the p urc ha se p rice
it i n fac t did not ha ve s u fficie nt liq uid funds to do so . The mi no ri ty
s har e ho ld er s wer e paid a nd thro ug h the ha ndi ng o ver o f co ntro l
of
MA TCO ,
funds
be cam e
a vai la ble
to
pa y
the
ma jo ri ty
sharehold er .
[8 ]
Those i n es se nce a re the fac ts whic h co nsti tute the two
cri mes o f whic h yo u ha ve be e n co nvic ted . The se two c rime s , as
yo u a dmi tted i nvo lve p ote ntia l p re judi ce a nd no t a ctua l p re judice
and ce r tai nly do no t ‘i nvo lve a mo unts o f mor e tha n R50 0 000 .
After yo u ma de the a dmi ssio ns whi c h I m e nti o ned a nd c ha nged
yo ur plea the S ta te si mp ly c lo sed i ts c ase . The S ta te wi th r ega rd
to b oth co unts a cce pted tha t yo ur c o nd uct e ntai led po te ntia l
pre judice a nd not a ctua l pr ejudi ce . A fter we co nvic te d yo u the
Sta te lead e vid e nc e whic h , i f i t be acc ep ted , co nsti tute c rim es
whic h ar e far mo re se rio us . I c a nno t s e nte nce yo u fo r c ri mes o f
whic h yo u ha ve no t be e n co nvic ted . That wo uld be wr o ng . I ca n
only se nte nce yo u for that o f whic h yo u ha ve bee n co nvic ted . It is
acco rdi ng ly m y judgm e nt that sec tio n 5 1 of Ac t 10 5 of 1 997 do es
6
no t app ly. I, the re for e , ha ve a n unfette re d disc re tio n to pas s a
sentence which is, in all the circumsta nc es , just and fair.
[9 ]
It i s clea r that the se c rime s , whe n co mpa red to the c rim es
wi th whi c h yo u we re o rigi na lly c ha rge d , do no t ca rr y the sa me
hig h deg ree o f mo ra l b la me wo r thi ne ss . I do no t thi nk tha t a
se nte nc e e mp hasisi ng the re habi litati ve p urp ose of se nte nci ng is
req ui red . I m us t e mp hasi ze tha t the b usi ness wo rld, like the res t
of so ciety, m us t be s cr up ulo us ly ho nes t a nd fair i n thei r b us i ne ss
dea li ngs , a nd this s e nte nce m us t se r ve to de te r o the r like mi nded
pers o ns a nd a lso s er ve as a p unis hme nt fo r yo u. A t the e nd o f the
da y s ocie ty de ma nd s tha t a se nte nce be i mpos ed whi c h is fai r
and
jus t , ke epi ng
in
mi nd
yo ur
cri mes
a nd
yo ur pe rs o na l
circumsta nce s.
[10 ]
I ha ve had the be ne fi t o f writte n hea ds o f a rg ume nt fro m
yo ur co unse l a s we ll as co unse l for the s ta te a nd I ha ve gi ve n the
ma tter m uc h tho ug ht. If I ha ve o mitte d to me ntio n so me fac ts i n
this judg me nt the n i t is not bec a us e the y wer e no t co nsi der ed o r
no t ta ke n i nto ac co unt. In the e nd , ha vi ng ba la nced yo ur pe rs o na l
circ ums ta nce s, the need s o f so ciety a nd the s e ve ri ty of the
cri mes of whic h yo u ha ve b e e n co nvic ted , I ha ve deci ded that the
following sentences will meet all the purposes of sentencing.
[11 ]
On co unt 2 yo u a re se nte nce d to p a y a fi ne o f R75 000 o r
ser ve 18 mo nths i mp riso nme nt. A fur the r 18 mo nths im pri so nme nt
7
is i mpos ed b ut s us pe nd ed for a pe ri o d o f fo ur ( 4) year s o n
co ndi tio n that yo u ar e no t a gai n co nvi cted o f the c rime o f fr a ud
committed during the period of suspension .
[12 ]
or
On co unt 6 yo u a re a lso se nte nced to pa y a fi ne o f R75 000
se r ve
18
mo nths
imp ris o nm e nt.
A
fur the r
18
mo nths
impri so nme nt i s i mpos ed b ut s uspe nded fo r a pe rio d o f fo ur (4 )
year s o n co ndi tio n tha t yo u a re no t agai n co nvic ted o f the cri me
of fraud committed during the period of suspension .
_______________________
A .H. V E L D HUIZE N, J
JUDGE OF THE HIGH COURT