I.Brief description of the case
Gao,legal representative of Company A in Heilongjiang Province and Beijing Branch of Company A,was sentenced by the People's Court of Haidian District in October 2018 to 11 years'imprisonment and a fine of 100,000 yuan for the crime of fraudulent fundraising,and 5 years'imprisonment and a fine of 200,000 yuan for the crime of illegal absorption of public deposits;and the decision on the case was the sentence of 14 years'imprisonment and a fine of 300,000 yuan for the two crimes.
After receiving the verdict,Gao cried out that he was wronged.Through a friend’s referral,Gao’s family members hired Lawyer Zhang Yanfeng,a senior partner of King&Capital Law Firm,as Gao’s defender for the second trial.After accepting the entrustment,Lawyer Zhang Yanfeng and his assistant Zhang Zhaohuai(a trainee lawyer)met Gao as soon as practically feasible to learn about the specific circumstances,and then thoroughly read the case files.
After reading the files,they drafted the defense statement,and patiently communicated with the relevant judge of No.1 Intermediate People's Court of Beijing Municipality.The court made a final ruling in March 2019 after a written hearing:the original verdict was reversed and remanded for retrial.
After this successful step,the two lawyers immediately retrieved a large amount of evidence for the retrial.After the retrial,Haidian Court ruled that Gao only committed the crime of illegal absorption of public deposits,was sentenced to 4.5 years in prison,and the fine was reduced to 100,000 yuan.
II.The facts found in the first trial
(1)Beijing Zhonghe Xinli Investment Consulting Co.,Ltd.was established in 2013,and mainly engaged in investment consulting business.From 2013 to 2015,Gao,together with Ni,Du,Wu,Huang,Li,Wang and others,publicly promoted"Zhongtong Hongyuan"financial management project and"Company A Property Leasing Right Transfer"financial management project(hereinafter referred to as the"Company A Project")and promised to repay the principal and pay the interest within a certain period.They did this in Beijing's Haidian District and other places,without approval,and through telephone promotion,the company’s internal display boards,and promotions in supermarkets and on other public occasions.By the above means,they illegally raised 100 million yuan from the public,of which Gao was involved in the amount of 60 million yuan.
(2)In the process of Company A’s illegal fundraising project and in the name of Beijing Branch of Company A,Gao,together with Li and other people,signed contracts with the new investment victim Huo and five other persons,and defrauded these victims of more than 3 million yuan in total.Then,they used the above money to repay the principal and pay the interest under"Zhongtong Hongyuan"financial management project,and did not use it for the operation of Company A's project.
III.The lawyers’ideas about defense in retrial
(I)Gao’s acts did not constitute the crime of illegal absorption of public deposits
1.Gao did not know Zhonghe Xinli Company’s personnel until April 2015,and shall not be deemed to be responsible for the previous illegal absorption of public deposits
According to the allegations,Zhonghe Xinli Company started illegal absorption of public deposits in 2013.Gao got to know Zonghe Xinli Company in April 2015.The indictment said that Gao started to cooperate with Wu and others in 2013,which was just based on Gao's first confession and without any other evidence.
2.Among the cash flows generated by Company A’s project,only the 3 million yuan falling under fraudulent fundraising was newly absorbed,while the other funds were swapped debts
After May 2015,Company A’s project had a large cash flow on its accounting book,most of which was the swap of the existing debts.Specifically,there were two ways:one was to directly change the agreement with the original investors,changing"Zhongtong Hongyuan"financial management project to Company A's project;the second was to refund the principal to the original investors under"Zhongtong Hongyuan"financial management project,tell those investors to invest in Company A's project,then withdraw the principal and refund it to the investors whose investments had matured.In this process,the bank transfer was just a bookkeeping tool,but actually,the same fund was transferred repeatedly between different accounts,thus creating a large cash flow.
In fact,the indictment affirmed this fact and classified it accordingly:directly changing the agreement with the original investors and changing"Zhongtong Hongyuan"financial management project to Company A's project was deemed as illegal absorption of public deposits;while independently absorbing new funds through Company A's project was deemed as fraudulent fundraising.
The defender believed that this part was debt swap,rather than new illegal absorption of public deposits,and was essentially finding new debtors for the original creditors.
3.Debt swap was not"repeated investment”
The precondition for"repeated investment"was that principal refunding or return receipt was real.However,principal refunding in this case was not actual refunding,but just debt swap.In other words,the investors were required to invest the refunded principal in Company A’s project,and they had no choice,which was neither actual recovery of principal nor actual return.Therefore,the principal shall not be confused with"the amount repeatedly invested after a participant recovered the principal or received the return".
4.The shift in investment due to"debt swap"did not expand the scale of the absorbed funds
Judging from the nature of the crime of illegal absorption of public deposits,its harm was positively related to the scale of the absorbed funds:the larger the scale of the absorbed funds,the greater the harm caused to society.Since the case did not expand the scale of the absorbed funds,it did not aggravate the social harm of the acts.From this perspective,the shift in investment was not a new investment.
(II)Gao’s acts did not constitute the crime of fraudulent fundraising
The crime of fraudulent fundraising refers to the use of fraudulent methods to illegally raise funds for the purpose of illegal possession.The following issues must be identified to determine that Gao’s acts constituted fraudulent fundraising:firstly,whether there were a real need for leasing Company A’s plaza;secondly,whether Company A had the authorization to lease its parent company's building;thirdly,whether Company A or Gao had control over the funds involved,and recklessly squandered,hid or transferred the funds,instead of investing the funds in operation;fourthly,if the funds involved indeed flowed to Company A’s project,whether the project had the capacity to repay the newly absorbed 3+million yuan;and fifthly,whether Gao was aware of and actively assisted Wu and others in their fraudulent fundraising.
1.Company A’s project was real,Company A had the authorization to lease its parent company’s building,and Gao did not defraud others
2.Gao did not intend to illegally possess others’funds
Firstly,the evidence on file showed that Company A and Gao did not control or use the funds involved in the case.Although the funds under Company A’s project were credited to Gao's personal bank card,the password and the Ukey for the bank card were controlled by Wu and other persons,Wu and other persons repeatedly"swapped debts"or filled the existing fund shortages.
Secondly,if it was deemed that Gao or Company A had obtained part of the raised funds involved in the case,then where did such funds go?Were they concealed,transferred,squandered,or used for Company A’s project or Company A’s production and operation?No answers were found to these questions.From another perspective,it was well-reasoned to rent the counters and collect the rents.
Thirdly,Gao was not aware of Wu’s and others’fraudulent fundraising,therefore,Gao shall not be identified as an accomplice just because Wu and others used Company A's project for fraudulent fundraising.Fellowship on crime must be based on joint implementation of criminal acts,and subjective intent of such joint implementation.In this case,Wu’s and others’using Company A’s project for fraudulent fundraising did not mean Gao was aware of their fraudulent fundraising.This was because it is not that Gao fabricated a false project and cheated others together with Wu and others;the truth was that Wu defrauded Company A of the lease materials in the name of assistance in finding lessees,and then used this means to transfer debts,absorb funds and fill the existing fund shortages.
3.Gao did not participate in the illegal fundraising
As mentioned earlier,over 100 million yuan was the funds absorbed by Wu and other persons through"Zhongtong Hongyuan"project before they got to know Gao and had nothing to do with Gao;although over 3 million yuan was related to Gao,Gao just provided some materials when he was deceived and provided them for the lease purpose,and there was no evidence to prove that Gao had the subjective intent of illegal fundraising.
The real situation:At that time,most of the lessees in Company A’s mall had withdrawn,and the company urgently needed to find new lessees.At this time,Wu and others claimed that they could help Company A to find lessees,and Company A was glad and actively cooperative,handing over the relevant materials to Wu.Company A's project was real,but Company A did not realize that Wu and others did not actually intend to find lessees,but wanted to illegally raise funds in the name of Company A and Company A’s project.The indictment said that"it was also found that......used the above funds to repay the principal and pay the interest under'Zhongtong Hongyuan'financial management project,and did not use such funds for the operation of Company A's project",which exactly proved that Company A was also defrauded by Wu and others.
Firstly,although the imprisonment term was reduced by 9.5 years after appeal,the lawyers think that being accused of the crime of illegal absorption of public deposits remained not well-founded.Secondly,Gao's first statement was very unfavorable to himself,because for example,he claimed that he got to know Wu in 2013,Wu promised to give him 30%after financing,and he did not have the authorization to lease the property of the parent company.Although the confession was not true and the law provides that evidence shall be essential and confession shall not be readily trusted,it is not so simple in judicial practices.Therefore,a suspect must be cautious in confession and shall tell the truth,no matter what the officers in charge of the case say.