Eight aspects of the purpose of unlawful possession in the crime of "practice" fraud

Analysis of several controversial issues in the determination of the purpose of illegal possession of the crime of fraud

This article is excerpted from "How to Determine the Purpose of Unlawful Possession of the Crime of Fraud"

Author: Yu Weihua Judge of the Second Criminal Division of the Higher People's Court of Zhejiang Province

1. Borrowing funds knowing the operating loss

In practice, there are often cases in which the defendant borrows funds due to operating losses, and then continues to lose money so that the funds cannot be returned and is found to be fraudulent. I don't think that's true. Borrowing funds in the case of operating losses, trying to improve the operating conditions, obtaining more profits, and reversing losses and increasing profits are the usual thinking of most operators. This kind of behavior itself does not have any criminal intent, has no social harm to speak of, and characterizing it as fraud is contrary to fairness and justice. It is obviously difficult for strong people to ask operators not to make any efforts in the case of operating losses and to sit still. It is very common in economic life to borrow funds to continue to operate in the event of operating losses, and there are many successful examples. China's laws and judicial interpretations do not stipulate that this situation can be found to have the purpose of illegal possession, which is obviously not the negligence of the legislator, but after careful consideration, it is considered inappropriate to criminalize such an act. Characterizing this kind of behavior as fraud is obviously not conducive to encouraging enterprise entrepreneurship and innovation, and is not conducive to economic development.

If the operator borrows funds and hides with the money in the case of operating losses, or hides or squanders the funds, it can be considered fraud. However, this situation is determined to have the purpose of illegal possession because the perpetrator evades with the money or conceals or squanders the money, rather than because he borrows funds in the case of operating losses.

Second, borrow after debt to repay former debt

Some people believe that borrowing after debt to repay the former debt in the case of a huge amount of debt and unable to repay the previous debt will eventually lead to a break in the capital chain, making it impossible to return the money, and it should be found that the perpetrator has the purpose of illegal possession of the money borrowed later, constituting fraud.

I think the above view is one-sided. Whether the repayment of the former debt constitutes fraud cannot be generalized, but should be analyzed on a case-by-case basis:

(1) If there are difficulties in capital turnover in the process of production and operation of the enterprise, and the operator maintains production and operation by borrowing the latter debt to repay the previous debt, it means that the business operator is still working hard to repay the debt and cannot be identified as having the purpose of illegal possession.

(2) The production and operation situation of the enterprise has seriously deteriorated, the operation is difficult to maintain, it is obviously unable to pay off the debt, and the operator uses fictitious investment projects and other deceptive means to borrow a large amount of funds for the repayment of the debts previously owed, which belongs to the situation of "knowing that there is no ability to return and defrauding a large number of funds", which can be found to have the purpose of illegal possession.

(3) If the debtor in a civil dispute is called upon or enforced by the court because he is unable to pay off his debts, borrows funds from relatives, friends or lenders to pay off debts, and does not use fraudulent means such as fictitious loan uses, the lender should know that the borrowed funds may not be recovered, and is willing to take risks out of the motive of helping relatives and friends or making high profits, and the borrower cannot be found to be fraudulent.

In summary, the repayment of the former debt cannot be a sufficient reason for determining that there is a purpose of illegal possession.

3. After signing or performing the contract, the contract is not performed or the contract is not effectively performed after receiving the goods, advance payment and service fee delivered by the other party

In economic life, it is often the case that one party to the contract does not perform the contract after receiving the property delivered by the other party, such as not paying for the goods owed on credit, and not delivering the goods after receiving the prepaid payment. There are also parties to the contract after charging the high fees paid by the other party, but can not provide products or services equivalent to the value of the fees charged, such as the merchants selling health care products after charging the customer's high fees but only provide some low-value health care products or even fake and shoddy products, beauty salons let customers spend tens of thousands of yuan to make beauty cards but only provide inferior services.

Whether the above circumstances can be found to have the purpose of illegal possession and constitute the crime of contract fraud should be analyzed in conjunction with the criminal law provisions of the crime of contract fraud.

Article 224 of the Criminal Law provides: "In any of the following circumstances, in the course of signing or performing a contract for the purpose of illegal possession, the other party fraudulently obtains property or property, and the amount is relatively large, he shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention, and shall also be fined or fined alone; It shall also impose a fine or confiscate property: (i) signing a contract in the name of a fictitious unit or fraudulently using the name of another person; (ii) security by forging, altering or invalidating a bill or other false proof of property rights; (iii) failing to actually perform the contract and luring the other party into continuing to sign and perform the contract by first performing a small contract or partially performing the contract; (4) escaping after receiving goods, payments, advance payments or secured property paid by the other party; (v) defrauding the other party of property by other means. ”

To determine whether an act constitutes the crime of contract fraud, it is first necessary to see whether the act complies with the circumstances provided for in items (1) to (4) of Article 224 of the Criminal Law. Where the preceding four items are not met, consider whether it falls under the circumstances of "defrauding the other party of property by other means" as provided for in subparagraph (5). According to the same interpretation rules, the circumstances provided for in subparagraph (5) shall be of a nature comparable to those provided for in the preceding four. In the first four cases, the perpetrator not only illegally took possession of another person's property by deceptive means, but also evaded the return of the property. Therefore, the circumstances provided for in subparagraph (v) should also be the illegal possession and evasion of the return of property by deceptive means. If the parties to a contract do not perform or do not fully perform the contract after obtaining other people's property, but do not fabricate the subject, fraudulently use the name of others, provide false guarantees, escape with money, squander squander the stolen money, etc., it does not meet any of the circumstances provided for in article 224 of the Criminal Law, and should not be regarded as the crime of contract fraud.

Fourth, in the process of trading, exaggerated or even deceived, inflating the price of goods and services

In the process of market trading, it is very common to ask for prices, such as a fake calligraphy and painting, the value of which is only a few thousand yuan, but a store claims to be authentic and sells at a price of tens of thousands of yuan. Can such an act be found to have the purpose of unlawful possession?

In my opinion, as long as the buyer knows the address of the store and the store is still operating normally after the transaction, the buyer can claim to revoke the sale contract within the statutory period of time and require the other party to return the price on the grounds of material misunderstanding or obvious unfairness of the transaction. If the buyer does not claim rights, the store's possession of the price of the calligraphy and painting is legal possession and cannot be regarded as having the purpose of illegal possession. Therefore, this situation should be regarded as civil fraud, and the contract for the sale and purchase of calligraphy and paintings can be revoked. Such a situation also does not conform to the provisions of laws and judicial interpretations that can be identified as "having the purpose of illegal possession" and should not be recognized as the crime of fraud.

5. Sell low-value commodities as high-value commodities in the transaction process

Some criminal law textbooks hold that if A sells a paper box containing a tv set containing bricks to a color TELEVISION set to others, the crime of fraud is established; similarly, if B sells a black and white television set to another person by passing off a color TV set as a color TV set, it is also established as a crime of fraud.

I do not agree with the above view. Selling bricks as color television sets to others obviously has the purpose of illegal possession; in real life, the perpetrators must use pseudonyms, abscond with money and other means to evade the recovery of stolen goods, and there is no obstacle to being found to have the purpose of illegal possession. If the black-and-white television set is sold to others by pretending to be a color television set, if the seller does not carry out the act of absconding with the money and other acts to evade the return of property after the transaction, the buyer can claim the right through civil channels, and the seller should not be found to have the purpose of illegal possession, and there is no legal basis for characterizing this act as a fraud crime. If the seller sells the black-and-white television set as a color television set to others and then escapes, it can be found that the seller has illegal possession of the difference between the black and white television set and the color television set, which should be characterized as fraud; however, this situation will hardly happen in real life, and the seller will certainly replace the black television set with a lower value item to reduce the cost of crime, so there is little practical significance in discussing the situation of "passing off the black and white television set as a color television".

Sixth, in the process of demolition and resettlement, fraudulently obtain compensation for demolition and relocation

In recent years, there have been a number of cases in which fraudulent acts have been characterized as fraud in the process of demolition and resettlement to obtain the benefits of compensation for demolition and relocation. There are also people who believe that those who do not have the conditions to purchase affordable housing and use false information to fraudulently purchase affordable housing are guilty of fraud; the amount can be calculated according to the difference between affordable housing and commercial housing.

I don't think the above is true. First of all, there is no legal basis for defrauding the benefits of demolition and resettlement and affordable housing as fraud. Neither the law nor the judicial interpretation has made it clear that this situation can be found to have "the purpose of illegal possession", and this situation is also very different from the situation in which the property is fraudulently obtained and then evaded, squandered stolen money, etc., can be found to have "the purpose of illegal possession". Second, even if deceptive means are used, the demolition and resettlement contract and the contract for the sale and purchase of affordable housing signed between the resettlement target and the resettlement party are not illegal and absolutely invalid. After discovering that the resettlement target has used deceptive means to obtain benefits, the resettlement party does not take back the resettlement housing or affordable housing, which is generally allowed. The resettlement target obtains resettlement benefits based on the demolition and resettlement contract, the contract for the sale and purchase of affordable housing, or the affordable housing is not illegal possession. Third, the resettlement target usually has a fixed residence and family property, and even if there is a situation where the resettlement party should recover the resettlement property, it can be resolved by civil and administrative means, and there is no need for criminal prosecution as a crime of fraud. Fourth, the deception of demolition and resettlement benefits, affordable housing is usually induced in a specific situation, the perpetrators of these acts are usually good and law-abiding citizens, its subjective malignancy, personal danger and real fraud criminals are very different, most people are difficult to realize that this behavior is a fraud crime. Therefore, it is common to cheat in the process of demolition and resettlement and purchase of affordable housing. If this kind of behavior is cracked down on as a fraud crime, many people will be criminally prosecuted, bringing disasters to many families, criminal recovery and huge property penalties will also cause serious losses to the legitimate property of the families involved, demolition and resettlement, affordable housing and other measures to benefit the people and benefit the people will damage the interests of the people. Therefore, it is not appropriate to characterize the deception of the benefits of demolition and resettlement and affordable housing as fraud.

7. Receiving state agricultural subsidies for fraudulent practice in the course of engaging in agricultural operations and development

With the increase of state support for the "three rural areas", many places have seen cases of defrauding the state of agricultural subsidies. In handling such cases, we should accurately grasp the spirit of the policy, strictly distinguish the boundary between fraud crimes and irregular operations in agricultural subsidy declarations, and avoid the expansion of criminal crackdowns. It is necessary not only to standardize the management and use of funds supported by the state for agriculture, but also to protect the legitimate rights and interests of agricultural operation and development enterprises, and truly implement the state's policy of supporting agriculture and benefiting farmers.

In my opinion, the practice of defrauding state agricultural subsidies should be treated differently according to different situations:

(1) If you do not engage in agricultural business development, or if the agricultural operation and development project you are engaged in is not a project that enjoys state agricultural subsidies, but uses the method of forging materials to defraud the state agricultural subsidies, and reaches the standard of the amount of conviction, it constitutes the crime of fraud.

(2) Engaging in agricultural operation and development projects that can enjoy state subsidies, but failing to meet the conditions stipulated in the policy to enjoy subsidies and fraudulently applying for state agricultural subsidies, all or mainly for agricultural business development, is a violation in the declaration of agricultural subsidies and should not be characterized as a crime of fraud. The relevant departments may recover the agricultural subsidies obtained in violation of the law, or order the operators to increase their inputs and meet the conditions for enjoying the subsidies.

(3) Meet the conditions for enjoying state agricultural subsidies, but some of the content of the declared materials is untrue, and those who receive state agricultural subsidies do not constitute the crime of fraud.

In such cases, whether an agricultural operation and development enterprise meets the conditions for enjoying subsidies stipulated in the relevant policies should be explained by the relevant departments implementing the policies, and cannot be explained by the judicial organs themselves.

8. One thing and two sales

The sale of one thing and two things cannot always be regarded as having the purpose of illegal possession. If, after selling one thing or two things, the perpetrator transfers, conceals, squanders or absconds with the money and refuses to return it, it shall be found to have the purpose of illegal possession and constitute fraud. If the perpetrator does not evade civil liability after the sale of one thing and two things, it is a civil dispute and does not constitute fraud.