The Tribune

• But ex-accounting employee gets sentence quashed

• Even though 14-year payback branded ‘rather lenient’

• Convict appealed 11 days after default arrest warrant

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A former accounting firm employee yesterday failed to overturn her conviction for defrauding the National Insurance Board (NIB) of $180,000 that was earmarked for the government’s housing initiative.

But the Court of Appeal, while upholding the Magistrate’s Court ruling against Shukuanya Thompson, a former corporate services supervisor at HLB Galanis & Company, also overturned a sentence that it described as “rather lenient”.

The magistrate at the original hearing, who was not named in the Court of Appeal ruling written by Sir Michael Barnett, its president, had ordered Ms Thompson to repay NIB over a 14-year period at a rate of $1,000 per month following an initial lump sum payment of $10,000. Any default was to result in a five-year jail term at Fox Hill prison.

Noting that she did not object to that sentence, which was imposed on May 11, 2018 following a so-called “plea bargain agreement”, Sir Michael said Ms Thompson did not seek to appeal until 11 days after a warrant was issued for her arrest for defaulting on the payment arrangement.

Rejecting Ms Thompson’s bid for “an extension of time” to appeal her conviction, Sir Michael and his two fellow appeal judges nevertheless overturned the sentence on the basis that the magistrate had exceeded their powers and jurisdiction under the Penal Code for dealing with “summary offences” such as this.

Unclear as to the basis of the magistrate’s compensation award, the Court of Appeal found that this exceeded the limits set by the Penal Code and gave Ms Thompson permission to appeal out of time against the sentence. The matter has now been sent back to the Magistrate’s Court for resentencing.

This was despite Sir Michael finding that, on the surface, the original sentence was “rather lenient”. He added: “The applicant [Ms Thompson] would avoid jail time if she paid almost $179,557.05 over 170 months or over 14 years.

“The applicant made no complaint about the sentence when it was agreed and imposed. She made payments (although not in strict compliance to the sentence) up to the following year, stopping in December 2019. She made no further payment after that date and a warrant of apprehension was issued on 19 August 2020. On August 30, 2020, she applied for an extension of time within which to appeal.”

Noting that the appeal was “woefully out of time” by almost two years, Sir Michael said: “In this case the appellant pled guilty and agreed the sentence. She made payments pursuant to the agreement for more than one year.

“It was only after she defaulted for more than six months and discovered that a warrant for her arrest was issued that she sought further advice from different counsel and decided she wanted to appeal her sentence, and subsequently decided to appeal her conviction.

“The guilty plea and conviction were following a plea agreement signed by the appellant acting on advice. There is no suggestion that it was done under undue influence or that the guilty plea was in any way equivocal.”

The Tribune reported in February 2018 how Ms Thompson was charged with 18 counts of falsifying accounting records between May and December 2016, along with a number of fraud-related counts. The entries were alleged to have enabled five people to receive a collective $283,264 in fraudulent payments.

However, it was never disclosed at the time that these funds belonged to the Bahamian people as NIB’s beneficiaries, or that these actions had deprived the Government’s housing programme - and potential homeowners - of much-needed financing.

Ms Thompson was the HLB Galanis & Company staff member “primarily responsible” for the accounting firm’s role as a watchdog to protect all sides’ interests and oversee how the $10m NIB loan made to the Ministry of Housing was being used.

This was disclosed in an Auditor General’s report, which disclosed that a fire at HLB Galanis & Company destroyed key documents relating to the fraud just as an investigation was set to begin.

During a follow-up meeting with the administrator [HLB Galanis & Company], we were advised that there was a fire at the offices of the administrator at the beginning of 2018 during which several documents were destroyed,” the Auditor General’s report said.

“In addition, prior to the fire, there was a discovery of a fraud committed by a former employee of the administrator [Ms Thompson] who was primarily responsible for the administration of the housing programme..... Our analysis of reports provided by the administrator indicated a number of payments that appeared to be duplicate payments made to contractors.

“The administrator advised that these two events may have contributed to the apparent ‘duplicate payments’ on the reports submitted and the now-inability of the administrator to provide original documents that were destroyed in the fire”

Crediting the probe carried out by Mr Galanis’s accounting firm, the Auditor General’s report said: “HLB Galanis conducted a separate internal investigation and have identified some $140,404 as possible duplicate payments and some $283,264 as fraudulent payments. HLG Galanis referred the fraud matters to the police, and a former employee has since pleaded guilty to the fraud charges.”

The Auditor General’s investigation into the tie-up between the Ministry of the Environment and Housing and NIB criticised both entities for failings in an arrangement that it branded “inefficient”.

It found that homes had not been built in the designated “locations”, while some had been constructed as single homes rather than duplexes without prior approval from the housing programme’s management committee.

NIB also came under fire for advancing $800,000 more to HLB Galanis & Company than required under the loan contract, with the Auditor General finding it “did not properly track the status of amounts advanced under the facility”.

The report also revealed that changes were made to HLB Galanis & Company’s “terms of operations” without the Memorandum of Understanding (MoU) with NIB being changed accordingly. As a result, the Auditor General, the Government’s main internal financial watchdog, found that the requirements to make regular financial reports, monthly bank reconciliations of construction payments, prevent “double payments” and ensure an annual audit “were not complied with”.