~Background
ACC completed investigations and referred the two cases pertaining to (1) embezzlement of funds related to the Buddha Dordenma Image Foundation construction project at Kuenselphodrang and (2) tax evasion by the Lhaimetog Export and Import, Thimphu to the OAG on 28 December 2018.
~Brief on the Embezzlement of Funds
The case pertained to the financial irregularities surrounding the construction of a 169ft bronze statue of Buddha Shakyamuni and associated structures at Kuensel Phodrang in Thimphu. The project involved contributions from foreign donors and individuals. Lam Tshering Wangdi, Chairman of Menjong Chothuen Tshogpa, had a central role and Damcho Choden was designated as Project Manager.
The investigation revealed poor record-keeping, lack of transparency in accounting for foreign donations, and significant discrepancy between funds received and project expenditures, during the period from 2004 to 2008. From 2009 to June 2018, investigation revealed a shift towards even more concerning practices, such as diversion of funds into Lam Tshering Wangdi’s personal account, lack of accountability for a substantial amount of funds in project-related spending, and misappropriation of donations which ended up in Damcho Chodenβs possession. The investigation also revealed use of project funds for the acquisition and registration of several high-value properties in the names of Lam Tshering Wangdi and Damcho Choden and their immediate family members. These properties encompassed land, buildings, vehicles, and business endeavors.
~Brief on Tax Evasion
Lhaimetog Export and Import (LMEI), a licensed exporter of Cordyceps, registered in the name of Damcho Choden was managed by her nephew Mr. Younten Jamtsho.
Between 2009 and 2017, LMEI officially reported a taxable income of Nu. 88.819 million to the tax authority, paying Nu.1.133 million as business income tax. However, the investigation revealed that LMEI had deliberately concealed at least Nu.70.987 million in export income and consequently evaded Nu.21.296 million in taxes during that period. Mr. Younten Jamtsho and his staff engaged in fraudulent practices, including falsifying invoices and redirecting funds to personal accounts of either Lam Tshering Wangdi, Damcho Choden or himself, in an intentional effort to evade tax obligations.
~Summary of the judgements rendered in the two cases
1.Embezzlement of funds in the Buddha Dordenma Project
The OAG filed formal charges against Damcho Choden on 15 February 2021. The charges included Criminal Misappropriation of Property and Possession of Unexplained Wealth.
The Trial Court rendered its judgment on 3 January 2023 wherein Damcho Choden was acquitted of all charges and instructed the rescinding of the freeze order against her properties. Moreover, the ACC and OAG were ordered to compensate her Nu.0.030 million per month for the seized property (Toyota Landcruiser Prado), amounting to Nu.1.593 million.
Upon the ACCβs submission and joint consultation, the OAG appealed against this decision based on several compelling reasons including:
β’ The funds and resources allocated for the Buddha Dordenma Project should be regarded as public resources under Section 176 (1)(ii) of the Anti-Corruption Act of Bhutan 2011.
β’ Damcho Choden was found to have used project funds to purchase vehicles without the consensus of other donors.
β’ The Buddha Dordenma Project, while not a registered Civil Society Organization, still falls under the definition of ‘Public Resources’ and ‘Public Agency’ as per the ACAB 2011.
β’ The Trial Court’s decision to rescind the ACCβs order and return seized property without considering the charge of possession of unexplained wealth as a corruption offense required further consideration.
The High Court, on 16 May 2023, reversed the verdict of the Trial Court and convicted and sentenced Damcho Choden to a total of 9 years imprisonment, with 8 years for misappropriation of property and 1 year for possession of unexplained wealth. The Court also ordered her to restitute Nu. 57.912 million with the seized properties to be auctioned and proceeds handed over to the Dordenma Project.
The Supreme Court, in its judgment of 4 October 2023, upheld the High Court’s decision. Damcho Choden’s sentence of 9 years remained unchanged, with 8 years for misappropriation of property and 1 year for possession of unexplained wealth. The specified amounts for restitution include Nu.53.521 million from Damcho Choden, Nu. 3 million from Mrs. Kelzang Deki, and Nu.0.15 million from Mr. Yonten Jamtsho. Additionally, the seized properties including land (9,502 sq.ft.) and 3 vehicles (Toyota Landcruiser Prado, Toyota Fortuner and Maruti Alto) are to be auctioned. The restitution amount, along with the auction proceeds, is directed to be paid to the Dordenma Project.
2.Tax Evasion
The Trial Court sentenced Damcho Choden to 9 years imprisonment for a second-degree felony. Mr. Yonten Jamtsho was convicted and sentenced to 3 years. Damcho Choden was ordered to restitute Nu. 63.182 million within 6 months.
The High Court upheld the Trial Court’s judgment. The Supreme Court, in its judgment of 4 October 2023, reduced Damcho Choden’s sentence to 6 years and 6 months for third-degree felony, while Mr. Yonten Jamtsho’s 3-year sentence for a fourth-degree felony remained unchanged. Damcho Choden has been ordered to restitute Nu. 63.182 million within 6 months.
