Illegal fundraising refers to the act of soliciting funds from unspecified targets by promising to repay principal and interest or giving other investment returns without the permission of the financial management department of the State Council in accordance with law or in violation of national financial management regulations. In order to further improve the people's ability to identify financial crimes, establish a correct investment concept, and raise their awareness of consciously resisting financial crimes, the special topic of "Preventing Illegal Fundraising" has been launched, hoping to strengthen the publicity of law popularization and publicity, and guard the "money bags" of the broad masses of the people, so that illegal and criminal acts in the financial field can be effectively curbed.
01
What is illegal fundraising?
According to the Regulations on the Prevention and Handling of Illegal Fundraising (hereinafter referred to as the "Regulations"), illegal fundraising refers to the act of soliciting funds from unspecified targets by promising to repay principal and interest or giving other investment returns without the permission of the financial management department of the State Council in accordance with the law or in violation of national financial management regulations.
02
What are the basic characteristics of illegal fundraising?
Illegal fund-raising must meet three elements at the same time: first, it is illegal because it is "without the permission of the financial management department of the State Council in accordance with the law or in violation of the state's financial management regulations"; second, it is "promising to repay principal and interest or giving other investment returns", that is, it is inducing; and third, it is "absorbing funds from unspecified targets", that is, it is social.
Illegal fund-raising is mainly involved in Article 176 of the Criminal Code for illegally absorbing deposits from the public and Article 192 for fund-raising fraud.
Article 176 of the Criminal Law stipulates that a person who illegally absorbs deposits from the public or indirectly absorbs deposits from the public, thereby disrupting the financial order, shall be sentenced to fixed-term imprisonment of not more than three years or short-term detention and/or a fine; if the amount is huge or there are other serious circumstances, he shall be sentenced to fixed-term imprisonment of not less than three years but not more than 10 years and shall also be fined; and if the amount is especially huge or there are other particularly serious circumstances, he shall be sentenced to fixed-term imprisonment of not less than 10 years and shall also be fined.
Article 192 of the Criminal Law stipulates that whoever illegally raises funds by fraudulent means for the purpose of illegal possession and the amount is relatively large shall be sentenced to fixed-term imprisonment of not less than three years but not more than seven years and shall also be fined;
At the same time, Article 25 of the Regulations stipulates that the losses incurred by participating in illegal fundraising shall be borne by the fundraising participants.
Illegal fundraising activities involve a wide range of contents and manifest themselves in various forms, and the common forms are as follows:
1. Establish Internet enterprises, investment and investment consulting enterprises, various trading venues or platforms, professional farmer cooperatives, mutual fund organizations and other organizations to absorb funds;
2. Collecting funds in the name of issuing or transferring equity or creditor's rights, raising funds, selling insurance products, or engaging in various asset management, virtual currency, financial leasing business, etc.;
3. Absorb funds in the form of promised payment of monetary, equities, in-kind returns and other returns in the sale of goods, provision of services, investment projects, etc.;
4. Violating laws, administrative regulations, or relevant state provisions by publicly disseminating information on the absorption of funds through mass media, instant messaging tools, or other means;
5. Other suspected illegal fundraising.
01
Promise high returns
Criminals fabricate the myth of "pie in the sky" and "overnight rich", promising investors high returns. In order to deceive more people into participating in fundraising, illegal fundraisers often honor their promised principal and interest on time and in full at the initial stage of fundraising, and when the fundraising reaches a certain scale, they secretly transfer funds or abscond with the funds, causing the fundraising participants to suffer economic losses.
02
Make up fake projects
Most of the criminals have registered legitimate companies or enterprises, and under the guise of responding to national industrial policies and carrying out entrepreneurship and innovation, they fabricate all kinds of false projects, and some even organize free tours and inspections to deceive the public's trust.
03
Build momentum with false propaganda
Criminals often spend a lot of money on publicity, hiring celebrity endorsements, celebrity platforms, publishing advertisements in major radio and television, the Internet and other media, publishing exclusive interviews in famous newspapers and periodicals, hiring people to widely distribute leaflets, making social donations, etc., to create a false momentum.
04
Use family affection to deceive
In order to accomplish or increase their own achievements, some participants in illegal fund-raising sometimes adopt methods similar to pyramid schemes, and do not hesitate to take advantage of family ties and geographical ties to fabricate lies that they have obtained high returns, and to attract relatives, friends, classmates, or neighbors to join, so that the number of participants spreads rapidly and the scale of fund-raising continues to expand.
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How can we prevent illegal fundraising?
How about avoiding falling into the trap of illegal fundraising?
Source: China Popular Law