Lawyer Nie Chengtao: Can private lending constitute the crime of fraud?

Author: Mr. Nie Chengtao, a financial rights protection expert

The author has handled a number of private lending cases in practice, many private lending cases have a huge amount of money, it is difficult to recover the relevant loans, at this time, the lenders are thinking of using fraud to pursue the criminal liability of the debtor, in the case of unable to recover the loan, the debtor can not be allowed to go unpunished, but can this really be realized?

1. Cases reported by the media and cases handled by the author

Case 1: 6 years across 6 provinces to collect evidence, Wuhan police relay to detect a huge fraud case of 5 million yuan

On January 18, 2022, the media reported that a fraud case disguised as a loan was reported to the Hongshan police 4 years after the deception was reported to the Hongshan police. Hongshan police two police relay evidence collection, looking for fraud suspects, after 6 years of unremitting search, across 6 provinces of difficult evidence collection, made a major breakthrough. On the 17th, the Yangtze River Daily reporter learned from the Hongshan police that the fraud case, which spanned 10 years, was finally solved, and the two initiators were punished by law.

In 2011, ms. Qiao, a 26-year-old shanxi person at the time, was in love with Yang Mou in Fujian, and Yang's brother Dayang learned that Ms. Qiao's family had strong financial resources, so he often bragged about his steel business in front of Ms. Qiao. In August of that year, Dayang invited Ms. Qiao and Xiao Yang to come to Wuhan for tourism, and by the way, they inspected the investment in the business district. The group was not satisfied with many shops, and the night before they were preparing to return home, Dayang and partner Hong came to ms. Qiao's hotel to chat.

"That night, Dayang and Hong looked very strange, and they kept answering the phone in the southern Fujian dialect, looking sad." Ms. Qiao recalled the situation at that time.

After inquiry, Dayang said that the steel business he ran had just received a large order and was very profitable, but the company's capital chain was tight at present, requiring 5 million turnover. At the scene, Dayang made a request to Ms. Qiao to borrow money, promised to return the money within a month, and then took out an order contract.

After Ms. Qiao saw the original contract, she also felt that it was profitable, and promised on the spot that the two would find ways to raise money. Because her savings were less than one million, Ms. Qiao borrowed money from her brother-in-law and eventually transferred the 5 million yuan she had collected to Yang and Hong.

However, a month passed, and Dayang and Hong failed to repay the money on time. In the face of Ms. Qiao's urging, the two were able to contact at first, and then completely disappeared. Soon after, she and her boyfriend Xiao Yang also broke up.

All along, Ms. Qiao always believed that Yang and Hong borrowed money and did not repay it, as long as they could find them, they would definitely be able to recover the money, and since then she has repeatedly gone to their hometown in Fujian to look for people, but there has been no progress.

In 2015, Ms. Qiao came from Shanxi to the police station under the jurisdiction of the hotel that borrowed money at that time, and the Zhuo Daoquan police station in Hongshan District called the police, according to the steel order contract provided by Ms. Qiao, the police station Liu Wei and Zhao Suoping went to Nanjing, Jiangsu Province, and Zhenjiang to find Party A in the contract, and the contract was identified as forged.

At this point, Ms. Qiao realized that this was a complete scam.

Case two: During the process of falling in love, the boyfriend frequently borrowed millions and disappeared

A man and a woman work in the same building, the two companies belong to neighbors, and a woman serves as the financial director of the company and is responsible for the financial power of the company. A man is the boss of the company next door, with several employees, going out to drive a luxury car. After the two met, they fell in love. In the process of falling in love, a man borrowed 1.2 million yuan from a woman in the name of the company's project needing capital turnover, because both of them have met the parents of both sides, and a woman thinks that the two sides have reached the point of talking about marriage, so a woman does not hesitate to lend her savings for many years, as well as the loans of relatives and friends, to a man several times. During the period, a man repaid part of the loan and opened his mouth again to borrow money from a woman. A woman really has no money, and she does not hesitate to use her power to embezzle the company's funds to lend more than 1 million to a man. Later, this fund could not be repaid by a man, and a woman could only repay the company's funds with an online loan. A man probably owes nearly 2 million yuan to a woman, after a man disappeared, never saw a woman again, because the previous loans were lent out many times, the time span reached 5 years.

After a man disappeared, he only occasionally contacted a woman to make a phone call, indicating that he had no money to repay the loan now, and was trying to raise money, and when he had money, he would repay it. For nearly 10 years, a man has only repaid a woman of 300,000 yuan, and the remaining loan has not been recovered until now. The reason why a man repays the 300,000 yuan is because a woman is fierce, and a man will repay part of it to ease the mood of a woman, and then a woman is useless and does not recover any arrears.

Later inquired, a man's company and luxury cars are rented, a man in the field with huge debts, owe millions to partners, he said that those investment projects are fake, there is no existence, a man in love is also fake, because he has children and a spouse.

Second, what is the difference between private lending and private investment?

Private lending and private investment often occur in practice, what is the difference between the two? The essential difference is that private lending can recover the principal and even interest, but private investment, if the investment is lost, then the principal and interest cannot be recovered. In practice, the most controversial is also in this regard, the debtor believes that it is an investment behavior and refuses to pay the principal and interest, but the debtor believes that it is a lending act, and thus requires it to repay the principal and interest.

Under normal circumstances, private lending should have IOUs, receipts, bank statements, witnesses, and even relevant recordings or WeChat chat records. This evidence can directly prove or indirectly prove whether the behavior between the two parties is lending or investment. As long as the debtor promises to repay the principal and interest, it can basically be regarded as a private lending behavior.

In practice, many private fund agreements are written to repay the principal and interest, and even have a guarantor or a guarantee letter, which can be identified as private lending behavior and should not be regarded as investment behavior. These are all direct evidence, but the most difficult ones are those that have no relevant evidence, such as no IOUs, only bank flows, and no other evidence. At this time, how to determine that it is a private loan?

When judges hear private lending cases, they try very carefully to prevent false lawsuits. Let's look at what the specific legal provisions say.

Article 2 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases stipulates that "when a lender files a private lending lawsuit with the people's court, it shall provide certificates of creditor's rights such as IOUs, receipts, IOUs, and other evidence that can prove the existence of the legal relationship between lending and lending."

  Where IOUs, receipts, IOUs and other certificates of creditor's rights held by the parties do not contain the creditor, and the party holding the certificates of creditor's rights initiates a private lending lawsuit, the people's court shall accept it. Where the defendant raises a factual defense against the plaintiff's creditor qualifications, and the people's court finds after review that the plaintiff does not have creditor qualifications, it rules to dismiss the lawsuit. ”

Article 13 provides that in any of the following circumstances, the people's court shall find the private lending contract invalid:

  (1) Arbitrage of loans from financial institutions for refinancing;

  (2) Re-lending funds obtained by borrowing from other for-profit legal persons, collecting funds from the staff and workers of the unit, or illegally absorbing deposits from the public;

  (3) Lenders who have not obtained lending qualifications in accordance with law provide loans to unspecified targets in society for the purpose of making profits;

  (4) The lender knows in advance or should have known in advance that the borrower is still providing the loan if the borrower borrowed the loan for illegal or criminal activities;

  (5) Violating mandatory provisions of laws or administrative regulations;

  (6) Violating public order and good customs.

  Article 14 provides that if a plaintiff initiates a private lending lawsuit on the basis of IOUs, receipts, IOUs, and other evidence of creditor's rights, and the defendant raises a defense or counterclaim on the basis of the basic legal relationship, and provides evidence to prove that the creditor's rights dispute is not caused by private lending, the people's court shall try the case in accordance with the basic legal relationship on the basis of the facts of the case ascertained.

  The provisions of the preceding paragraph shall not apply to creditor's rights and liabilities agreements reached by the parties through mediation, settlement or liquidation.

  Article 15 provides that if the plaintiff initiates a private lending lawsuit only on the basis of IOUs, receipts, IOUs and other evidence of creditor's rights, and the defendant defends that the loan has been repaid, the defendant shall provide evidence to prove its claim. After the defendant provides the corresponding evidence to prove its claim, the plaintiff should still bear the burden of proof for the existence of the lending relationship.

  Where the defendant's defense of lending has not actually occurred and can be reasonably explained, the people's court shall comprehensively judge and verify whether the facts of the loan occurred in light of facts and factors such as the amount of the loan, the delivery of the funds, the parties' economic ability, the local or inter-party transaction methods, trading habits, changes in the parties' assets, and witness testimony.

  Article 16 stipulates that if the plaintiff initiates a private lending lawsuit only on the basis of the transfer vouchers of the financial institution, and the defendant defends that the transfer is to repay the previous loans or other debts of both parties, the defendant shall provide evidence to prove its claim. After the defendant provides the corresponding evidence to prove its claim, the plaintiff should still bear the burden of proof for the establishment of the lending relationship.

  Article 18 stipulates that if a people's court discovers any of the following circumstances when hearing a private lending dispute case, it shall strictly examine the reason, time, place, source of funds, method of delivery, flow of funds, relationship between the borrower and the lender, economic situation, and other facts, and comprehensively determine whether it is a false civil lawsuit:

  (1) The lender clearly does not have the ability to lend;

  (2) The facts and reasons on which the lender is based in the lawsuit are clearly unreasonable;

  (3) The lender is unable to submit the creditor's rights certificate or the submitted creditor's rights certificate may be forged;

  (4) The parties participate in private lending litigation multiple times within a certain period of time;

  (5) The parties refuse to appear in court to participate in the litigation without a legitimate reason, and the retained agent's statement of the loan facts is unclear or inconsistent;

  (6) The parties do not have any dispute over the occurrence of the loan facts or the defense is obviously unreasonable;

  (7) The borrower's spouse or partner, or other creditors outside the case raise objections with factual basis;

  (8) Where the parties have transferred the property at a low price in other disputes;

  (9) The parties improperly waive their rights;

  (10) Other situations where there may be false private lending litigation.

Through the above provisions, we can know that when the judge hears such cases, he should strictly examine the reasons, time, place, source of funds, delivery methods, flow of funds, the relationship between the borrower and the lender, the economic situation and other facts, so as a lender, can your existing evidence prove these details, and if you cannot prove these details, how to prove that it is a private lending behavior? If it cannot be proved that it is a private lending act, what should the defendant do if it is a private investment act? What is the previously paid part of the interest? Has the previous partial interest payment proved to be a private loan?

If it is a loan in a different place, the two parties cannot sign a loan agreement or IOU in person, so do you still need to lend funds at this time? The author believes that if the relationship between the two parties is very good, even if you can't sign the loan agreement or IOU in person, you believe that the other party will not deceive you, then you can lend, when lending, prepare chat records, bank statements and IOUs, etc., which is also to prepare for future litigation and retain basic evidence. The biggest problem with off-site borrowing is that it is impossible to determine that the signed IOU was signed by the person himself. If it is not signed by the person, then this evidence is flawed, and there will be deviations in how the court determines it in the future.

3. Under what circumstances can private lending become fraud?

Before analyzing this problem, let's first analyze the two cases in the article, in case one, the deceived person Qiao was defrauded of 5 million yuan by others on the grounds of false investment, although the scammer is also in the name of borrowing, saying that the good is to repay the principal and interest, but finally play disappears, which shows that the scammer has no intention of repaying when borrowing, the so-called investment projects, are fake, but also excuses, just to obtain the trust of the victim and the tools used. In case two, although a man is also in the name of borrowing, the investment project is also fake, but he still repaid part of the principal or interest, a man really intends to repay the money, although he does not meet, but a fixed time will call a woman to explain the fact that his capital difficulties can not be repaid, which shows that a man is not really not repaying money, and has the willingness to repay money, but there is no money for the time being. From this point of view, the subjective aspects of the debtors in the two cases are still very different, one is that they did not intend to repay the money in the first place, and the other was that they planned to repay the money but did not have the money to repay it. Although the results were the same and no money was repaid, the legal results were different.

Of course, the main reason why such a situation occurs is that a man in case two, who owed a lot of money to others before, was not investigated for criminal responsibility, so he had a legal awareness, and he deliberately avoided the constituent elements of the crime of fraud, and finally let him escape criminal responsibility.

Based on the above cases, we can see that under special circumstances, private lending behavior can constitute the crime of fraud, that is, although it is borrowed, but it is borrowed, it is not intended to be repaid, in this case, it can constitute the crime of fraud. Of course, the premise is that the fraudster fabricates the facts, conceals the truth, and finally successfully borrows money from the lender, and the amount of money reaches a relatively large amount, which will constitute the crime of fraud. If the fraudster borrows money without fabricating facts and concealing the truth, is this considered fraud? That is to say, borrowing is false, borrowing is originally cheating, in this case, constitutes the crime of fraud? The author believes that in this case, it is not easy to identify as a fraud crime. The victim believes the liar without fabricating the facts and concealing the truth, and is deceived by lending him money. Such an easy to gain trust shows that the relationship between the two sides is not ordinary, there must be a certain relationship, so it will be so easy to believe. Even if there is no relationship, it is so easy to be deceived, the amount is certainly not large, and it does not constitute a crime. If the victim knows that he is cheating and lends him money, in this case, it does not constitute the crime of fraud, and the victim does not care about his legitimate rights and interests, then why should our criminal law protect him?

In practice, the most common case should be a fictitious project to borrow money, in this case, does this constitute the crime of fraud? For example, the loan is used to invest in project A, and project A does not exist at all, or invests in project B, the author believes that no matter what project it invests in, whether it constitutes fraud, the key is to see whether it has the willingness to repay the loan when borrowing, and then whether it has defrauded the loan by fabricating facts and concealing the truth. Comprehensive consideration is given to whether the crime of fraud is constituted.