Wrong charges get crafty cashier cleared of theft

A cashier at a men's fashion outlet in St Julian's, who allegedly applied a higher exchange rate on foreign currency purchases and pocketed the difference, has been cleared of theft because he was not charged with the correct crime.

Steven Glenn Paton was charged with theft following increased scrutiny by the management at St Julian's Hugo Boss shop due to a shortfall of over €60,000. Although the management did not accuse Paton of being behind the shortfalls, they “noted a certain strange behaviour pattern that started to raise suspicions about the accused.”

Vincent Farrugia, owner of the Hugo Boss Malta franchise, told the court that between 26 and 27 March 2015, the accused had been exchanging foreign currency tendered by customers and retaining the difference after depositing the Euro equivalent of the price in the shop’s cash register, was responsible for a stash of around €70 that was found hidden in a cupboard at the shop, and had failed to input the sale of a belt worth €85 in the shop's accounting system.

With regards to the money found in shop’s cupboard, magistrate Aaron Bugeja observed that “this strange practice to be related to another even stranger practice that the accused was proved to do. Sometimes the shop’s customers paid the price of items purchased in Pounds Sterling or United States Dollars. The witnesses claim that according to company policy these monies had to entered into the company's computerised system that accepted both Sterling and US Dollars. However, it was also proven that the accused used to call at a Foreign Exchange Bureau close by and exchange monies received as payment for goods in Pounds Sterling or Dollars to Euros. He would then retain the difference between the purchase price in Euros, change due and the currency tendered after depositing the price in Euro equivalent in the shop’s cash till.

Magistrate Bugeja said that the withholding of the difference in value did not satisfy the definition of theft used by the Maltese courts.  

“While the Court is convinced beyond a reasonable doubt that the money in the cupboard were his own making, the prosecution failed to prove beyond a reasonable doubt that this money was the result of “theft” according to Maltese law. On a balance of probabilities this money could have been the product of a profit he made out of the difference in the more favourable daily rate of exchange.”

“This Court considers that if in execution of this practice, the accused did in point of fact deposit the purchase price in Euros established by the shop’s management for each item paid and retain the difference in exchange currency in his pockets, then the accused cannot be stated to have committed the crime of theft.”

The shop owners were entitled to their purchase price in Euros, the court said, and it had been proven that the accused did return this amount to the shop owners.

“And strictly speaking not even the shop owners were entitled to profit from the different daily rate of exchange between Euros and other currencies, which difference ought to have been refunded to the customers, given that any excess in the exchange rate difference over and above the price in Euros is to be deemed to remain the property of the customer, who was entitled to its refund.”

The court said that the retention of this difference in exchange rate was more akin to the crime of misappropriation.

“The accused was expected to return the difference to the paying client or at least abide by the payment instructions of the employer – to deliver the foreign currency tendered directly in the shop’s till rather than misapplying the difference in exchange rate by converting it to his benefit. Then it would have been for the management of the shop to face the music if they profited unduly on the difference in exchange rate, if any customer really questioned or cared to ask in the first place.”

Whilst the law allows the courts to find a person who is charged with theft, guilty of misappropriation, that could only happen in a trial by jury, the court noted. Because that accused was not charged with misappropriation, the court was unable to convict him of it. Paton was declared innocent of theft.