The project party is suspected of fraud and running away, how to determine whether the agent is an accomplice?

Author: Mr. Zeng Jie, Director of the Defense and Research Center for Illegal Fund-raising Cases at Guangdong Guangqiang Law Firm

(This article may not be reproduced without the permission of the author himself)

In the field of virtual currency, if a certain air coin or fraudulent coin project party rolls money and runs away, and then is found to be a fraud crime, will the relevant personnel as a substitute investment also constitute a joint crime of fraud? (The investment here includes the traditional investment party that raises Ethereum or USDT from retail investors after getting the share, and then invests in it by itself, and distributes the profit proportionally after making a profit; it also includes the agent party that simply accepts the funds of retail investors and receives a fixed commission from each fund).

In order to determine that the nominee constitutes an accomplice, it is important whether it has the intent to commit a joint crime. The common intention here, such as the joint division of labor between the agency and the project party, the project party to carry out development financing, embezzlement of funds; the representative of the investment is responsible for publicity and promotion of people's heads, pass on investor funds, and then get paid according to a certain proportion. In addition, there is also a situation that although the agent and the project party have not colluded, but subjectively should know that others are using the relevant air coin project to commit fraud crimes, then the agent investor is also an accomplice to the fraud crime.

To determine whether it has common intent, you can refer to the following points:

1. Verify the flow of funds or property

If it is a proxy investment, there will inevitably be a transfer of funds. For example, the agent A of a digital currency project receives the Ethereum entry of retail investors and then punches the corresponding Ethereum into the upper level of investment or directly into the project party, in this process, the agent may deduct the commission or fee that it can get. However, the fact or evidence can only prove the authenticity of the act of investing on behalf of the project itself, excluding the fact that the agent itself has embezzled funds, but it cannot prove whether the agent has conspired with the project party or knows whether the project party has intentions.

2. Does the investor invest on its own and is it deceived?

This type of case is different from the MLM case, and the person who helps the MLM to invest the funds themselves may also need to bear the loss. Or in cases of illegal absorption of public deposits, the relevant salesmen themselves and their families invest a lot of money and bear losses, nor does it affect the characterization of the act of helping the public absorb funds.

In fraud cases, the person who helps the fraud will generally not become the victim or the victim of the fraud, which also applies to the act of investing on behalf of the fraud. This is because if the agent itself also participates in the investment of the project party, and the project party eventually runs away, resulting in the agent and many retail investors becoming the property damage and deceived, or although the agent investor has not been damaged, but it has also invested in the project before and may have other reasons such as lack of funds or investment preferences, etc., recovered the investment property, so it was not damaged. At this point, it can be reasonably inferred that the agent did not have the intention to collude with the project party to commit fraud, because unless there is evidence that the agent initially had the common intention to defraud, and then was "betrayed and deceived" by the project party, at this time, even if the agent was deceived and damaged, it cannot be excluded from the fact that it jointly committed a crime when raising funds.

For this issue, the author believes that it is the most important evidence in such cases. In judicial practice, including in the relevant cases handled by the author himself, similar situations have occurred, and this has been used as key favorable evidence, and then the procuratorate's further investigation and verification has been successfully obtained and a decision not to approve the arrest has been made.

3. Whether the agent has any knowledge of the project situation or should understand

As agents, they are often in the role of a project introducer, so they have a certain information advantage in themselves for the relevant content of the project. If it subjectively knows that a digital currency project is or is very likely to be an air coin or a fraud coin, and knows that the project is not developed with blockchain technology; or clearly understands that the source code of the project is not public or only partially disclosed, the project party can tamper with it at will without monitoring; there are problems with the legitimacy or authenticity of the smart contract itself, etc., it can be determined that even if the investment party has not conspired with the project party, it can also be determined that it should subjectively know that the project has fraud problems.

For this kind of identification path, it should also be combined with the professional experience, academic background, personal investment behavior, etc. of the proxy investor to make a comprehensive judgment. In addition, if the relevant chat records, call recordings, etc. can reasonably infer that the agent has a good understanding of the real situation of the project but still invests on behalf of others, such as the chat records of the project and the project party or the superior investment personnel, it is clearly reflected that the project is an air coin project, at this time, even if the agent himself has invested and incurred losses, it can still be judged that it subjectively has the intention to help fraud crimes.

(The above content is the relevant summary and collation of lawyer Zeng Jie, director of the Criminal Defense and Research Center of Guangqiang Law Firm, hoping to provide useful help for criminal defense, and welcomes the majority of peers to put forward criticism and suggestions, more exchanges)

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