......On April 16, at the site of the special procuratorial open day of "procuratorial protection of enterprises" held by the procuratorate of Zhenjiang City, Jiangsu Province, a typical case involving enterprises reported by the procuratorate made Lin Tianzhong, a representative of the National People's Congress who was invited to participate in the event, director of the production management department of Jiangsu Hengshun Group and director of the new product workshop, deeply touched.
In the case of Hong, Zhou, and a trading company in Shenzhen falsely issuing special VAT invoices and fraudulently obtaining export tax rebates, the criminal gang headed by Hong obtained more than 5.2 billion yuan of false VAT invoices through an intermediary company, and defrauded the state of export tax rebates of more than 720 million yuan through false mobile phone export trade. This case is a case supervised by the Ministry of Public Security, and it is also a major case of fraudulent export tax rebates in the whole chain from false issuance of special VAT invoices, payment of orders and distribution of goods to declaration of tax refunds.
High-priced mobile phones for customs clearance and export
It is a copycat machine and a prop machine
"After opening the tightly packed cardboard box, we saw the 'mobile phone' neatly stacked. Each 'mobile phone' is wrapped in a translucent plastic bag, the size and appearance look no different from the mobile phones we usually use, but as soon as the plastic bag is cut, a pungent smell comes to the face, except for some of the copycat machines that can barely be used, many of them are just plastic shells that fool people...... "After many years, Wu Yuanpeng, the policeman who handled the case, still remembers the scene at that time.
Some of the counterfeit mobile phones and prop mobile phones involved in the case were seized.
In April 2016, a publicity report about a technology company in Zhenjiang attracted the attention of relevant functional departments: the company settled in Zhenjiang in May 2014, and its foreign trade business was very hot, not only quickly becoming the "top three" of Zhenjiang export enterprises, but also successfully rated as the "star enterprise" of Zhenjiang's foreign trade exports. After analyzing and comparing the data of suspected smuggling and tax fraud in the jurisdiction, the functional departments found that the company had repeatedly exported a large number of mobile phones and other goods with a high probability of tax fraud from Shenzhen, Guangzhou and other ports to Hong Kong in the form of non-local purchases and exports, especially from 2014 to 2015, the company was repeatedly investigated for using low-priced mobile phones to pretend to be high-priced mobile phones for export and the amount involved was huge.
On August 29, 2016, the department transferred the clues of the case to the investigation agency, and after the investigation of the case, the investigation agency found that the high-priced domestic brand mobile phone used by a technology company in Zhenjiang for customs declaration and export was an extremely low-value copycat mobile phone or a prop mobile phone with no use value. "Except for the mobile phones used for export are fake, the other documents, contracts, and bills are all genuine from the formal point of view. After careful investigation, while arresting the relevant persons involved in the case, we simultaneously froze more than 180 accounts involved in the case, seized a large number of bank cards, U shields, more than 80 seals, and more than 800 sets of documentary evidence used to commit the crime, and loaded a truckload of these evidentiary materials. Chen Jian, the policeman handling the case, introduced.
Gang crime
Concocted a tax refund scam
With the deepening of the investigation, a criminal gang with the purpose of defrauding the state of export tax rebates, involving a number of criminal chains such as false issuance of special VAT invoices, distribution, customs declaration, and tax refunds, with a fine internal division of labor, relatively independent, and collusion with each other, and with distinctive industrialization, specialization, and concealment characteristics, has gradually surfaced.
Hong, who was born in 1966, is known as "Mr. Hong", is the core figure of the entire criminal gang, and is the commander-in-chief and chief planner of this extraordinarily large export tax rebate fraud case, and has traveled back and forth to Hong Kong, Shenzhen and other places all the year round to engage in import and export trade. In 2013, Hong met Zhou, who was also engaged in export trade, at a party. Zhou is two years younger than Hong, and in May 2014, Zhou successively established a technology company in Zhenjiang and a number of companies engaged in the export trade of electronic and digital products such as computers and cameras.
"Brother, now the state has a large tax rebate on the export of mobile phones, do you want to work together to make 'quick money'? Don't worry, money is indispensable to you!" In 2014, after a full meal and wine, Hong Moubi said with a gesture of counting money, and Zhou hesitated for a moment and nodded in agreement.
After Zhou agreed, Hong gave full play to his advantages of being well-connected, and successively formed three gangs of "tax purchase stamps, fake exports, and tax refunds" through multi-party contacts, and the different gangs were relatively independent of each other, and after completing the corresponding behaviors in the criminal chain, they all gave feedback to Hong, and Hong was responsible for the connection, communication, and circulation of different links in the entire criminal chain.
Hong first contacted a trading company in Shenzhen engaged in mobile phone trade business through others, and agreed that when a trading company in Shenzhen purchased goods from upstream mobile phone suppliers such as a communication technology company in Guangdong, it signed false mobile phone procurement contracts with upstream suppliers in the name of a technology company in Zhenjiang and other companies controlled by Zhou, provided false capital flows, and adopted the method of separating tickets and goods to issue special VAT invoices that should have been issued by upstream suppliers to a trading company in Shenzhen to a technology company in Zhenjiang and other companies controlled by Zhou. As a result, Hong obtained false VAT invoices for input through a number of companies controlled by Zhou, and a trading company in Shenzhen collected a high invoicing fee.
After getting the special VAT invoice, the next step is the fake export. In order to obtain the customs declaration documents for export tax rebates, a number of Hong Kong companies controlled by Hong signed false mobile phone export foreign trade contracts with companies controlled by Zhou, and instructed personnel to purchase and rent prop mobile phones and copycat mobile phones produced by small workshops from others by borrowing goods and matching documents, and passing them off as domestic brand mobile phones in the foreign trade contract for false customs declaration.
The premise of declaring export tax rebates is also to have foreign exchange settlement business. In order to prove that there was real foreign trade, Hong first arranged for people to remit foreign exchange purchased in renminbi to a number of Hong Kong companies controlled by him through underground banks, and then the Hong Kong companies under his control remitted money to a number of companies in Zhenjiang, including a technology company in Zhenjiang, controlled by Zhou, thus creating the false impression of foreign trade. After the above-mentioned documents and formalities were in place, Hong instructed a number of companies controlled by Zhou to hold a complete set of procedures such as purchase and sale contracts, foreign exchange verification documents, and customs declaration forms to falsely declare tax refunds.
After investigation, in the past four years, Hong organized 14 individuals and a number of companies in 3 gangs to create a criminal gang that spans false issuance of special VAT invoices, false customs declarations, and fraudulent export tax rebates. Under the guise of exporting mobile phones, this criminal gang issued more than 16,000 special VAT invoices with a total value tax of more than 5.2 billion yuan, and defrauded more than 720 million yuan of export tax rebates.
Precise accusations
Crush the sweet dreams of yellow sorghum
The case was a case of defrauding export tax rebates using mobile phones as props, and the means of committing the crime were hidden, the links were complex, and there were many people involved. In order to accurately crack down on crime, as early as November 2016, at the beginning of the investigation of the case, the Zhenjiang Municipal Procuratorate was invited to send personnel to intervene in advance, suggesting that the investigation authorities collect evidence from three aspects: capital chain, goods flow, and bill flow. "Considering that the case involved multiple links and full-chain criminal acts such as false opening and tax fraud, and that there were three gangs in total, and that the time and links involved in each case and the participation of each unit were different, we also suggested that in the process of early intervention, the investigating authorities should focus on the objective behavior and subjective cognition of the persons and units involved in the case, and suggested that the investigating authorities should be qualitatively dealt with separately according to the specific participation of each entity involved in the criminal acts. The prosecutor handling the case told reporters.
The procurator handling the case reports the case to the joint meeting of procurators.
From July 2018 to January 2019, the case was successively transferred to the Zhenjiang Municipal Procuratorate for review and prosecution. During the examination and prosecution period, the procurator handling the case sorted out and studied the mainland's foreign trade and tax-related policy documents. On this basis, the procurator reviewed 433 files, formed a review report of more than 100,000 words, and requested the convening of four joint meetings of procurators, thus accurately clarifying the respective criminal acts and amounts of Hong, Zhou, and other persons and units involved in the case.
In the process of reviewing and prosecuting, the procurator also paid attention to strengthening the interpretation of the law and reasoning and communication with the procuratorate, guiding one of the criminal suspects to take the initiative to return more than 5,000 yuan of stolen goods, and urging nine criminal suspects to voluntarily admit guilt and accept punishment. On January 28, 2019, the Zhenjiang Municipal Procuratorate prosecuted Hong, Zhou and others, a technology company in Zhenjiang and other units on suspicion of fraudulently obtaining export tax rebates, and a trading company in Shenzhen on suspicion of falsely issuing special VAT invoices.
In early July 2019, the court heard the case. During the two-day trial, the prosecutor intuitively and vividly expounded the criminal process and social harmfulness of the case in combination with the PPT, carefully analyzed the status and role of each defendant and defendant unit in the entire criminal process, and put forward a sentencing recommendation.
On August 22, 2019, the court of first instance adopted all the facts, charges and sentencing recommendations put forward by the procuratorate, and sentenced Hong to 14 years in prison and a fine of 726 million yuan for the crime of fraudulently obtaining export tax rebates, sentenced Zhou to nine years in prison and fined 5 million yuan, and fined a technology company in Zhenjiang to 100 million yuan. A trading company in Shenzhen was fined 500,000 yuan for the crime of falsely issuing special VAT invoices, and more than 10 other defendants in the same case were sentenced to fixed-term imprisonment of three to ten years, each of which was fined concurrently. After the first-instance verdict was pronounced, some of the defendants appealed. On June 29, 2020, the court rejected the appeal and upheld the original judgment. On March 18 this year, the case was released by the Supreme People's Court and the Supreme People's Procuratorate as a typical criminal case of punishing endangering tax collection and management in accordance with the law.
Collaboration
Jointly protect financial and tax security
"Export tax rebate is an important measure for the state to encourage export trade, and fraudulent export tax rebates have had an extremely bad impact on the national export tax rebate policy and export trade activities. The prosecutor handling the case said that the Zhenjiang Municipal Procuratorate decided to work with all parties to strengthen the management of the source of litigation and jointly safeguard the national tax system and political and economic security as early as the beginning of the case.
In view of the problems found in the process of handling cases, such as the lack of law enforcement initiative and inadequate performance of duties by relevant functional departments, the Zhenjiang Municipal Procuratorate formulated and issued procuratorial suggestions in accordance with the law, and recommended improving tax collection and management measures and strengthening supervision and law enforcement from the aspects of inspection management, tax source monitoring, and industry supervision. After receiving the procuratorial suggestions, the relevant functional departments quickly took special actions in the city, effectively plugging the loopholes in the system of export tax rebate declaration review and supervision of foreign trade enterprises.
"Since March 2020, we have established a normalized joint meeting system and information sharing mechanism with the investigation agencies, administrative law enforcement agencies and other departments to crack down on tax-related crimes. When handling such cases, the administrative organs will immediately invite us to send personnel to intervene; we will also recommend that the administrative organs impose administrative penalties in accordance with the law for units and individuals found in the handling of cases that do not constitute criminal offenses but violate the relevant administrative laws and regulations. Jin Qinghua, a full-time member of the Inspection Committee of the Zhenjiang Municipal Procuratorate, said.
The reporter learned from the Zhenjiang Municipal Procuratorate that up to now, the relevant administrative law enforcement agencies in Zhenjiang City have relied on the information sharing mechanism of tax-related cases to transfer more than 30 clues of tax-related crimes, and the Zhenjiang Municipal Procuratorate has intervened in more than 50 tax-related cases handled by the investigation agencies in advance in accordance with the law, and suggested that the administrative organs have carried out administrative penalties on the units and individuals involved in nearly 20 tax-related cases, and have firmly woven a legal net to crack down on tax-related violations and crimes.
On the afternoon of April 16, Lin Tianzhong, deputy to the National People's Congress, director of the production management department of Jiangsu Hengshun Group and director of the new product workshop, was invited to participate in the special procuratorial open day activity of "procuratorial protection enterprise" held by the Zhenjiang Municipal Procuratorate, and interacted with the prosecutor.
In addition, in view of the lack of legal awareness of some foreign trade enterprises reflected in the process of handling tax-related cases, the Zhenjiang Municipal Procuratorate, together with the Jiangsu Provincial Council for the Promotion of International Trade, the Zhenjiang Municipal Bureau of Commerce, the Zhenjiang Council for the Promotion of International Trade (International Chamber of Commerce), the Zhenjiang Branch of the Bank of Communications and other units, held a special training for the person in charge of the city's foreign trade and economic cooperation enterprises, foreign trade business managers, etc., to help the city's foreign trade and economic cooperation enterprises to sort out in detail the tax-related and foreign exchange-related legal risks that may be faced, and to send tailor-made services to the practitioners of the city's foreign trade and economic cooperation enterprises. A feast of the rule of law".
(Source: Procuratorate Daily, Der Spiegel Author: Guan Ying, Wang Ting, Gao Guangzhi)