Behind the first personal fine in the ABS field: Zhang Mingwei not only forged the seal, but also defrauded 3.1 million yuan

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Per reporter Chen Chen per editor Xie Xin

On October 30, 2018, the Shanghai Securities Regulatory Bureau issued a decision to issue a warning letter to Zhang Mingwei, because as the main person in charge of the Jiangxi small loan project, he failed to find that the seal used in the project guarantee commitment letter was forged, which was also the first fine against an individual in the ABS field. In addition, the project's plan manager, Shenwan Hongyuan Securities, and the rating agency Zhongxin were punished by warning letters.

However, the penalty at that time did not elaborate on the forgery of the seal, and on January 7 this year, the judgment disclosed by the judgment document network restored the original appearance of the facts. Upon investigation, on 18 August 2015, defendant Zhang Mingwei defrauded four small loan companies of a total of RMB3.1 million in guarantee fees on the grounds that he needed to provide a guarantee. The court convicted defendant Zhang Mingwei of contract fraud in the first instance and sentenced him to 11 years' imprisonment, deprivation of political rights for three years, and a fine of 200,000 yuan. Zhang Mingwei was not satisfied and appealed, and the court of second instance rejected the appeal after trial and upheld the original judgment.

<h2>Defrauded four Jiangxi small loan companies of 3.1 million yuan</h2>

According to the first-instance criminal judgment of Zhang Mingwei's contract fraud, in August 2012, defendant Zhang Mingwei joined Hongyuan Securities Co., Ltd. and successively served as deputy general manager of the structured financing department and project manager of the eighth investment banking department. In January 2015, Shenyin Wanguo Securities Co., Ltd. absorbed and merged Hongyuan Securities Co., Ltd. and changed its name to Shenwan Hongyuan Securities Co., Ltd. (hereinafter referred to as Shenwan Hongyuan).

In mid-2014, four Jiangxi microfinance companies negotiated an asset securitization cooperation project with Hongyuan Securities Co., Ltd. to establish the Jiangxi Microfinance Company's 2015 Microfinance Asset-Backed Special Plan (hereinafter referred to as the Special Plan), and defendant Zhang Mingwei was the main person in charge of the special plan.

In June 2015, defendant Zhang Mingwei, during the implementation of the special plan, fabricated the fact that China Export & Credit Insurance Corporation (hereinafter referred to as China Credit Insurance) issued a guarantee to Shenwan Hongyuan and Jiangxi Microfinance Company, and provided a forged "Jiangxi Provincial Microfinance Company 2015 Small Loan Asset Support Special Plan Guarantee Commitment Letter" (hereinafter referred to as the guarantee letter) issued by China Credit Insurance Company.

In July of the same year, Shenwan Hongyuan, as the administrator of the special plan, signed the "Jiangxi Microfinance Company's 2015 Small Loan Asset-Backed Special Plan Basic Asset Sale and Purchase Agreement" with four Jiangxi microfinance companies, and remitted 500 million yuan of raised funds. In August of the same year, defendant Zhang Mingwei defrauded four Jiangxi small loan companies of RMB775,000 in guarantee fees remitted to the accounts of Beijing Jinhongyuan Trading Co., Ltd. (hereinafter referred to as Jinhongyuan Company) designated by Zhang Mingwei on the grounds of false guarantees. Defendant Zhang Mingwei transferred the above-mentioned guarantee fees totaling RMB3.1 million to his family or used them for the operation of Jin Hongyuan Company.

According to public information, the Jiangxi small loan project was established on August 4, 2015, with a total scale of 500 million yuan and a statutory expiration date of August 4, 2018, with Shenwan Hongyuan as the plan manager.

In addition, Qixinbao data shows that Jin Hongyuan Company was established on September 5, 2014, and has 3 individual shareholders, of which Zhang Mingwei holds 40% of the shares. However, the company was deregistered on June 17, 2019.

<h2>He was sentenced to eleven years' imprisonment</h2>

Zhang Mingwei's defender pointed out that the defendant Zhang Mingwei did not have the subjective intention to defraud, nor did he fabricate facts to conceal the truth to defraud Jiangxi Microfinance Company of guarantee fees, and Zhang Mingwei collected 3.1 million yuan of consulting fees from Jiangxi Small Loan Company based on providing consulting services such as listing on the New Third Board, so the facts alleged in the indictment were unclear, the evidence was insufficient, and his conduct did not constitute the crime of contract fraud.

However, the court of first instance provided evidence showing that Sinosure did not actually issue a Letter of Guarantee, and this business did not fall within the scope of China Credit Insurance's guarantee. After appraisal, the "China Export and Credit Insurance Corporation" print on the guarantee letter was forged.

In addition, Zhang Mingwei not only provided Shenwan Hongyuan with a forged guarantee letter, but also instructed Mr. Lu to pretend to be the business manager of the fourth sales department of China Credit Insurance to pay due diligence verification of Shenwan Hongyuan and China Chengxin Company. The "Daily Economic News" reporter noted that on October 30, 2018, the Shanghai Securities Regulatory Bureau implemented warning letter measures against Zhang Mingwei and Shen Wanhongyuan; on December 28, 2018, the Shanghai Securities Regulatory Bureau then implemented warning letter measures for China Chengxin, which mentioned that the due diligence of the project was insufficient, and the seal used in the individual project guarantee commitment letter was not found in time to be forged.

It is worth mentioning that the relevant evidence also shows that Zhang Mingwei refused to confess the facts involved in the case after arriving at the case. The court of first instance held that the defendant Zhang Mingwei, for the purpose of illegal possession, defrauded others of a total of RMB3.1 million in the process of signing and performing the contract, an amount of which was particularly huge, and his conduct constituted the crime of contract fraud and should be punished, and the public prosecution organ was convicted of the crime. Defendant Zhang Mingwei and his defender proposed that Zhang Mingwei provide consulting services for Jiangxi Microfinance Company on the listing on the New Third Board and thereby collect a consulting fee of 3.1 million yuan, which was found to be untrue and the court did not accept it.

The court of first instance stated that after investigation, defendant Zhang Mingwei took advantage of the jiangxi microfinance company's asset securitization cooperation project to not only fabricate the fact that China Credit Insurance issued a guarantee for Jiangxi Small Loan Company in the process of signing the agreement on the sale and purchase of basic assets of the special plan, but also provided a forged China credit guarantee letter to Shen Wanhongyuan to sign an agreement on the sale and purchase of basic assets with four Jiangxi small loan companies based on false guarantees, causing the four Jiangxi small loan companies to be deceived into paying guarantee fees to the company accounts designated by Zhang Mingwei. His conduct meets the elements of the crime of contract fraud.

The court of first instance ruled that defendant Zhang Mingwei was guilty of contract fraud and sentenced him to 11 years' imprisonment, deprivation of political rights for three years, and a fine of RMB 200,000. The illegal gains shall be ordered to be returned. After the judgment, Zhang Mingwei was not satisfied and appealed, and the court of second instance rejected the appeal after trial and upheld the original judgment.

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