Treasure Moremi v The State

The appellant, Treasure Moremi, was a director and shareholder of Denmag Trading (Pty) Ltd, responsible for finances and general management. During the Covid-19 lockdown in 2020, Denmag had 22 employees. To alleviate financial hardship, the South African government introduced the Temporary Employee/Employer Relief fund (TERS). Between April and June 2020, the appellant submitted 32 fraudulent claims to the Department of Labour claiming benefits for 533 employees (when only 22 were employed) by using personal details of former employees and job applicants who were never appointed. Through these false claims, she obtained R10,619,677.89. The funds were used to purchase machinery, vehicles, containers, building materials for Denmag, and immovable property for herself and her husband personally. The appellant later admitted to being overpaid (claiming it was a 'mistake or error') and repaid R3,545,474.71. She was arrested in October 2021. Despite initially indicating she would plead not guilty in her bail application, she and Denmag pleaded guilty at trial and were convicted of fraud. The Specialised Commercial Crimes Court sentenced her to 10 years' imprisonment. The minimum prescribed sentence under s 51(2)(a) read with Part II of Schedule 2 of the Criminal Law Amendment Act 105 of 1997 was 15 years (the fraud exceeding R500,000), but the trial court found substantial and compelling circumstances to deviate downward.

• Whether the high court erred in refusing a petition for leave to appeal against a sentence of 10 years' imprisonment imposed on a first offender for fraud of over R10 million
• Whether there were reasonable prospects of success that the sentence would be altered if leave to appeal was granted
• Whether the trial court committed any material misdirections in sentencing
• Whether the sentence was so startlingly inappropriate as to induce a sense of shock
• Whether substantial and compelling circumstances justified a deviation from the prescribed minimum sentence of 15 years
• Whether a non-custodial sentence (such as correctional supervision or a suspended sentence) would have been appropriate
• Whether the trial court gave adequate consideration to the Pre-Sentence report and Correctional Supervision report
• Whether the trial court adequately considered the interests of the appellant's three minor children

The appeal against the high court's refusal to grant leave to appeal against sentence was dismissed.

The binding legal principles established are: (1) An appeal court will only interfere with a trial court's sentencing discretion if there was a material misdirection or the sentence is so startlingly inappropriate as to induce a sense of shock. (2) Under minimum sentencing legislation (Criminal Law Amendment Act), the prescribed minimum sentence is the starting point, and courts have limited (but not eliminated) discretion to deviate only where substantial and compelling circumstances exist based on weighty justification and truly convincing reasons. (3) All traditional sentencing factors remain relevant in assessing substantial and compelling circumstances, but the emphasis shifts to the objective gravity of the crime and the need for effective sanctions. (4) For leave to appeal against sentence to be granted, there must be reasonable prospects of success established on a sound rational basis that the sentence will be altered on appeal. (5) Being a first offender is a mitigating factor, but its weight is diminished where the offence comprises multiple repeated deliberate acts over time, each providing opportunity for reflection. (6) In white-collar crime cases involving substantial fraud for personal enrichment and breach of trust, imprisonment is appropriate notwithstanding first offender status or 'respectable' background. (7) While the interests of an offender's minor children must be considered in sentencing, they cannot trump the duty to impose appropriate punishment where custodial sentences are warranted and alternative care arrangements exist. (8) Pre-Sentence reports must be scrutinized and opinions therein tested against evidence rather than accepted uncritically. (9) A guilty plea is not necessarily indicative of genuine remorse where the offender has previously attempted to provide false explanations for their conduct.

The Court made several non-binding observations: (1) It noted with approval the statement from Sadler that 'white-collar' crime has often been visited with inadequate penalties in South African courts and rejected the 'heresies' that prison is only for violent offenders or that people from respectable backgrounds should not be imprisoned for dishonesty. (2) The Court observed that corruption and fraud are destroying the fabric of South African society and must be countered by effective deterrent punishment. (3) The Court commented that the appellant's conduct was not merely unlawful but 'inconsiderate, violates every aspect of ubuntu and displays a lack of empathy' given the context of national suffering during Covid-19. (4) The Court noted that punishment is now 'forward looking' to achieve future social benefits (the Utilitarian approach) and that offenders should be reformed and reintegrated into society, but this does not preclude imprisonment where warranted. (5) The Court observed that sentencing courts must differentiate between offenders who should be removed from society and those who, while deserving punishment, should not be removed - but this does not entitle first offenders to suspended sentences or non-custodial options. (6) The Court referenced that confiscation orders and sentences should be treated separately per Gardener. (7) The Court noted that no two cases are the same and each must be determined on its own facts and merits.

This case is significant in South African sentencing jurisprudence for several reasons: (1) It reinforces the approach to white-collar crime sentencing following Sadler, rejecting leniency based on 'respectable' backgrounds and emphasizing that substantial fraud warrants serious custodial sentences even for first offenders. (2) It clarifies the application of minimum sentencing legislation under the Criminal Law Amendment Act, confirming that the prescribed minimum is the starting point with limited scope for deviation, and that substantial and compelling circumstances must be based on weighty justification, not flimsy or speculative grounds. (3) It addresses the relevance of an offender's children in sentencing, reaffirming that while their interests must be considered, they cannot trump the duty to properly punish serious criminal misconduct, particularly where alternative care arrangements exist. (4) It provides guidance on the weight to be given to Pre-Sentence reports, showing courts must scrutinize rather than simply accept opinions expressed therein. (5) It emphasizes that repeated deliberate criminal conduct over time diminishes the mitigatory value of being a first offender. (6) The case addresses Covid-19 TERS fraud specifically, an issue of contemporary significance involving misappropriation of relief funds during a national crisis. (7) It clarifies the test for granting leave to appeal against sentence, requiring establishment of reasonable prospects that an appeal court would interfere with the sentence imposed.