Yu Hui's contract fraud case
1. Basic facts of the case
Defendant Yu Hui, male, born on August 26, 1960, was formerly the legal representative of Shanghai Shenxing Rubber Products Factory, Shanghai Wantong Industrial Company, and the person in charge of the complete set of business department of Shanghai Kangle Electromechanical. He was arrested on suspicion of contract fraud on 20 September 2000.
On July 23, 2001, the First Branch of the Shanghai Municipal People's Procuratorate filed a public prosecution with the Shanghai No. 1 Intermediate People's Court for the crime of contract fraud committed by the defendant Yu Hui.
Defendant Yu Hui and his defender argued that there was insufficient evidence for the prosecution to accuse Yu Hui of fraudulently obtaining loans by means of fictitious use of funds and providing false mortgages and guarantees due to mismanagement; Yu Hui subjectively did not have the purpose of illegal possession, and it was improper for the public prosecution to characterize this case as a crime of contract fraud; The public prosecution erred in applying the law, and the provisions of the Criminal Law before the amendment should be applied in this case to acquit Yu Hui.
The Shanghai No. 1 Intermediate People's Court ascertained through open trial that the defendant Yu Hui instructed others to use fictitious funds, falsify enterprise financial statements, and provide false guarantees from November 1995 to June 1997 while serving as the legal representative of Shanghai Shenxing Rubber Products Factory (hereinafter referred to as "Shenxing Products Factory"), the person in charge of the Shanghai Kangle Electromechanical Complete Business Department (hereinafter referred to as the "Recreation Business Department") under Shenxing Products Factory, and the legal representative of Shanghai Wantong Industrial Company (hereinafter referred to as "Wantong Company"). In the name of Vantone Company and the Recreation Business Department, false mortgages and other means successively signed a large number of loan contracts with the Fengxin Business Office of the Fengxian County Branch of the Shanghai Branch of the Agricultural Bank of China (hereinafter referred to as the "Fengxin Business Office"), the victim unit, and obtained 130 loans totaling more than RMB 140 million for the above-mentioned units. Subsequently, Yu Hui used the above-mentioned loans for futures trading and the company's daily expenses, resulting in direct economic losses totaling more than RMB 1,760 from the victim's Fengxin Business Office.
The Shanghai No. 1 Intermediate People's Court held that the defendant Yu Hui, as the legal representative of Vantone Company and the person in charge of the Recreation Business Department, used fictitious use of funds, provided false financial statements, and provided false guarantees and mortgages to defraud banks of more than 1,760 yuan for Vantone Company and the Recreation Business Department, and his conduct constituted the crime of contract fraud, and the amount was particularly huge, and should be punished in accordance with law. In order to maintain the normal order of the market and protect the property rights of companies and enterprises from infringement, in accordance with the provisions of Article 12, Paragraph 1, Article 224, Article 231 and Article 57, Paragraph 1 of the Criminal Law of the People's Republic of China, the following judgment was rendered on September 5, 2001:
Defendant Yu Hui committed the crime of contract fraud and was sentenced to life imprisonment, deprivation of political rights for life, and confiscation of all his personal property.
After the verdict was pronounced, Yu Hui was dissatisfied and appealed to the Shanghai Higher People's Court. Yu Hui and his defender submitted: Yu Hui had voluntarily surrendered, and it was not found improper in the first instance;
During the second-instance trial, Yu Hui also made meritorious contributions in reporting the crimes of others, and should be given a lighter punishment. The Shanghai Municipal People's Procuratorate held that although Yu Hui had made different defenses for some of the facts before the first-instance judgment, he had confessed to all the main facts of his crime, and that he should be found to have voluntarily surrendered, and recommended that the second-instance court consider it.
The Shanghai Municipal High People's Court found after a public trial of the second instance that:
In 1992, the defendant Yu Hui successively served as the person in charge or legal representative of Shenxing Products Factory, the Recreation Business Department, and Vantone Company, and in 1993, due to the needs of normal business activities, he began to borrow money from banks in the name of the Recreation Business Department, with Vantone Company as a guarantee; Beginning in November 1995, due to the reversal of business conditions and capital turnover difficulties, Yu Hui decided to borrow money from the bank and invest in futures trading in the form of "meeting minutes" after consulting with other personnel of the company.
In November 1995, in order to speculate in futures, Yu Hui instructed his financial personnel to make false financial statements at the request of Cai Kaimao, the person in charge of the bank (handled in a separate case), and at the same time fabricated reasons for purchasing steel and other materials, and continued to borrow money from the bank. From July 1, 1996 to the end of the year, the loan of Vantone Company was guaranteed by Shanghai Fengxian Machinery Transportation Company; On January 1, 1997, Shenxing Products Factory, the Recreation Business Department merged with Vantone Company, and Cai Kaimao, the director of the bank, made a false loan and continued to lend money to Vantone Company in the form of collateral, and in June 1997, Cai used a blank guarantee loan contract stamped with the seal of "Shanghai Fengxian Machinery Transportation Company" and its person in charge, Yang Gengen, to guarantee the loan. From November 1995 to June 1997, Yu Hui took out 130 loans totaling 141.665 million yuan, and used the above-mentioned loans for futures trading or later loans to repay previous loans, and at the time of the case, he had lost a total of more than 17.6 million yuan.
On August 14, 2000, Yu Hui voluntarily surrendered to the Fengxian County Public Security Bureau and truthfully confessed that he had invested his loans in the futures market from 1995 to 1997, causing losses of more than 1,000 yuan.
The Shanghai Municipal High People's Court held that appellant Yu Hui's conduct constituted the crime of contract fraud, and that the amount of the crime was particularly huge, and that he should be punished in accordance with law as the person in charge directly responsible for the crime of the unit. Yu Hui voluntarily surrendered to the public security organs, and before the first-instance judgment, although he made a defense for some of the facts that were different from those in the investigation stage, he did not deny the main facts of the crime, and the original judgment did not find that Yu Hui's voluntary surrender was improper and should be corrected. Yu Hui's reporting of other people's criminal leads during the second-instance trial was found to be worthless, and Yu's conduct did not constitute meritorious service. Appellant Yu Hui and his defender argued that Yu's reasons for surrendering were valid. The recommendations of the Shanghai Municipal People's Procuratorate should also be adopted. The facts ascertained in the original judgment were clear, the evidence was credible and sufficient, the conviction was accurate, and the trial procedures were lawful, but the sentencing of appellant Yu Hui was improper and should be corrected. In accordance with article 189 (2) of the Criminal Procedure Law of the People's Republic of China and article 12, paragraph 1, article 224, article 231 and article 67, paragraph 1 of the Criminal Law of the People's Republic of China, the following judgment was rendered on 10 December 2001:
1. Revoke the criminal judgment of the Shanghai No. 1 Intermediate People's Court that defendant Yu Hui was guilty of contract fraud and sentenced him to life imprisonment, deprived of political rights for life, and confiscated all of his personal property;
2. Appellant Yu Hui committed the crime of contract fraud and was sentenced to 12 years' imprisonment and confiscation of 20,000 yuan of his personal property.
Second, the main issues
1. Can it be determined that the perpetrator has the "purpose of illegal possession" when a huge amount of bank loans are fraudulently used for high-risk futures speculation and repayment of previous loans with new loans?
2. How to deal with cases of unit loan fraud that were tried after the revision of the Criminal Law and were implemented before the revision of the Criminal Law?
3. In a crime committed by a unit under the double penalty system as provided for in the Criminal Law, can the criminal responsibility of the unit and its directly responsible managers and other directly responsible personnel be separated?
III. Grounds for the Trial
In this case, the defendant Yu Hui, in the name of the unit, fraudulently obtained a huge amount of loans for high-risk futures speculation and repaid the previous loan with a new loan by signing a false loan contract and other means, causing the victim to suffer a direct economic loss of more than RMB 1,760. The key to the qualitative handling of this case lies in two points: first, whether the defendant Yu Hui had the "purpose of illegal possession" and whether his behavior constituted contract fraud; Second, since this case occurred before the revision of the Criminal Law, the law at the time of the act was the 1979 Criminal Law, and the law at the time of trial was the 1997 Criminal Law.
(1) Defendant Yu Hui subjectively had the intent to illegally occupy a bank loan for a unit, constituting the crime of fraud, and required that the perpetrator subjectively had the purpose of illegal possession.
On January 21, 2001, the Supreme People's Court issued the Minutes of the National Symposium on the Trial of Financial Crime Cases by Courts (hereinafter referred to as the "Minutes on the Trial of Financial Crimes"), which clarified seven circumstances that can be determined to have the purpose of illegal possession, namely: "(1) fraudulently obtaining a large amount of funds knowing that there is no ability to return them; (2) Fleeing after illegally obtaining funds; (3) Recklessly squandering fraudulent funds; (4) Using fraudulently obtained funds to carry out illegal and criminal activities; (5) Evading or transferring funds, or concealing assets in order to evade the return of funds; (6) Concealing or destroying accounts, or engaging in fake bankruptcy or bankruptcy in order to evade the return of funds; (7) Other acts of illegally taking possession of funds and refusing to return them". In judicial practice, if the perpetrator illegally obtains funds through fraud, resulting in a relatively large amount of funds that cannot be returned, and at the same time has any of the above circumstances, it should be determined that the perpetrator subjectively has the purpose of illegal possession, and his conduct is fraudulent in nature.
In this case, the defendant Yu Hui disregarded the reality of losses and signed false contracts in the name of Vantone Company and the Recreation Business Department to obtain 130 loans from banks, with a total amount of more than 140 million yuan, which were used to speculate on high-risk futures and repay old loans with new loans, which were used to speculate on high-risk futures and repay old loans with new loans, ultimately causing losses of more than 1,760 yuan. His conduct falls under the first circumstance set forth in the Minutes on the Trial of Financial Crimes. Since Yu Hui's behavior was decided by the company's meeting, his behavior was a unit loan fraud.
(2) According to the provisions of the Criminal Law before the amendment, the unit that commits the loan fraud of the unit cannot constitute a crime, but the directly responsible managers and other directly responsible personnel of the unit may constitute the crime of fraud
The Penal Code of 1979 only provides for the offence of ordinary fraud. In 1995, the Decision of the Standing Committee of the National People's Congress on Punishing Crimes of Undermining Financial Order made clear provisions on various financial fraud crimes, which provided for the crime of loan fraud by natural persons, but did not stipulate that an entity could constitute the crime of loan fraud. In order to accurately apply the 1979 Criminal Law and the above-mentioned decision, the Supreme People's Court promulgated the Interpretation on Several Issues Concerning the Specific Application of Law in the Trial of Fraud Cases (hereinafter referred to as the "Interpretation") on December 16, 1996. The first paragraph of Article 2 of the Interpretation stipulates: "The use of economic contracts to defraud others of property in a relatively large amount constitutes the crime of fraud." Paragraph 4 of Article 1 stipulates: "Where the directly responsible managers and other directly responsible personnel of a unit commit fraud in the name of the unit, and the proceeds of the fraud belong to the unit, and the amount is between 50,000 and 100,000 RMB, the above-mentioned persons shall be investigated for criminal responsibility in accordance with the provisions of Article 151 of the Criminal Law (1979); Where the amount is between 200,000 and 300,000 yuan, the above-mentioned persons shall be investigated for criminal responsibility in accordance with the provisions of Article 152 of the Criminal Law (1979). "After the revision of the Criminal Law in 1997, Articles 30 and 31 of the General Provisions stipulate the criminal liability of units for crimes, and Article 193 of the Sub-Provisions provides for the crime of loan fraud, but Article 200, which specifically stipulates the crime of financial fraud by units, excludes that units can constitute the crime of loan fraud. The 1979 Criminal Law and its Interpretation were the legal basis for the crime of loan fraud in the evaluation unit before the revision of the Criminal Law. Among them, how to understand the provisions of Article 1, Paragraph 4 of the Interpretation is the crux of the issue. In this regard, there are two views: one opinion is that this provision shows that the fraud carried out by the unit can only constitute a natural person, that is, the person in charge and other persons directly responsible for the unit, and the unit is not the subject of the crime; Another view is that this provision affirms that the unit can constitute the crime of fraud, but implements a single penalty system, that is, only the person in charge and other persons directly responsible for the unit are punished.
We agree with the first opinion. Judicial interpretations are interpretations of the original intent of the legislation, and in the absence of provisions on the crime of unit fraud in the 1979 Criminal Law and related criminal legislation, the provisions of Article 1, Paragraph 4 of the Interpretation can only stipulate the criminal liability of natural persons for committing the crime of fraud in the name and for the benefit of the unit. Therefore, according to the provisions of the Criminal Law before the amendment, if a unit uses an economic contract to commit loan fraud, the unit does not constitute a crime, and can only pursue the criminal responsibility of the person in charge directly responsible for the unit and other persons directly responsible for the crime of fraud. In this case, Vantone Company and the Recreation Business Department did not constitute a crime, and the defendant Yu Hui constituted the crime of fraud, and because the amount of fraud was particularly huge, the circumstances were particularly serious, and should be punished within the sentencing range of "fixed-term imprisonment of more than 10 years or life imprisonment, and confiscation of property may be imposed concurrently" in accordance with the provisions of Article 152 of the Criminal Law of 1979.
(3) According to the provisions of the 1997 Criminal Law, a unit cannot constitute the crime of loan fraud. However, if the loan fraud carried out by the unit meets the constitutive elements of the crime of contract fraud, it shall be convicted of the crime of contract fraud, and a double penalty system shall be imposed on the unit, the directly responsible managers and other directly responsible personnel
The 1997 Criminal Law established the principle of legality of crimes, so according to the provisions of Articles 30 and 193 of the Criminal Law, an entity cannot constitute the crime of loan fraud. In judicial practice, there are different opinions on how to apply the law to corporate loan fraud: one opinion holds that in order to punish corporate loan fraud, only the criminal liability of natural persons for corporate loan fraud can be investigated, that is, only the person in charge or other persons directly responsible for the unit can be punished, and the unit cannot be punished. This does not violate the provisions of the Criminal Law on crimes committed by units, and objectively achieves the goal of cracking down on crimes; Another view is that the main thrust of the principle of legality of crimes lies in the principle that "no crime is not committed unless the law is expressly written" and "no punishment is not punished unless the law is expressly written". Although unit loan fraud is harmful to society, it cannot be handled as a crime because it lacks a clear legal basis and does not have the characteristics of criminal illegality and criminal punishment.
We believe that, after all, unit crimes are different from crimes committed by natural persons, and the loan fraud committed by units is punished as a natural person crime, which violates the principle of legality of crimes. At the same time, the principle of legality of crimes should be fully understood, and the conduct of loan fraud by a unit does not constitute the crime of loan fraud, but as long as its conduct meets the constitutive elements of other crimes stipulated in the Criminal Law, is harmful to society, is criminally illegal, and should be punished by criminal punishment, it should be convicted and punished as the corresponding crime. The Minutes for the Trial of Financial Crimes clearly point out: "For loan fraud committed by a unit, it cannot be convicted and punished for the crime of loan fraud, nor can the person in charge and other persons directly responsible for the criminal liability of the person directly responsible for the crime of loan fraud." However, in judicial practice, where it is very obvious that a unit uses the signing or performance of a loan contract to defraud banks or other financial institutions of loans for the purpose of illegal possession, and meets the constitutive elements of the crime of contract fraud as provided for in article 224 of the Criminal Law, it shall be convicted and punished as the crime of contract fraud."
The defendant in this case, Yu Hui, in the name of "Vantone Company" and "Recreation Business Department", defrauded the bank of a loan of 17.6 million yuan by signing false contracts and other means, and the illegal gains belonged to the unit. According to the provisions of articles 224 and 231 of the Criminal Law, "Vantone Company" and "Recreation Business Department" have constituted the crime of contract fraud, and the defendant Yu Hui shall be investigated for criminal responsibility for the person in charge who should be directly responsible for the crime of contract fraud according to the unit, and may be sentenced to fixed-term imprisonment of not less than 10 years or life imprisonment, and shall also be fined or have his property confiscated.
(4) On the basis of the principle of "starting with the old and treating it lightly", the unit cannot constitute a crime in the conduct of unit loan fraud that was tried after the revision of the Criminal Law and was carried out before the revision of the Criminal Law, and the relevant natural persons may be pursued for criminal responsibility as the person in charge or other directly responsible personnel for the crime of unit contract fraud in accordance with the provisions of the Criminal Law
In the case that the criminal responsibility of the unit is not pursued, can the person in charge or other persons directly responsible be convicted and sentenced? That is to say, in the case of a crime committed by a unit under the double penalty system as stipulated in the Criminal Law, can the criminal responsibility of the unit be separated from its directly responsible person in charge and other directly responsible personnel? We believe that under the double penalty system, there are two entities of responsibility, the criminal unit and the directly responsible person in charge or other directly responsible personnel, and their criminal responsibility can be separated, so that the criminal responsibility of the directly responsible person in charge or other directly responsible personnel can still be pursued in a realistic manner without pursuing the criminal responsibility of the unit. In other words, the criminal responsibility of a unit and its person in charge or other persons directly responsible for the crime may be separated under certain conditions. In addition to the implementation of a double penalty system, the provisions of the Criminal Law of the Mainland also stipulate that there is a single punishment system that only punishes the person in charge of the unit and other persons directly responsible, which also shows that under the premise of committing a crime committed by a unit, the criminal responsibility of the unit and the natural person concerned is not completely inseparable. At the same time, in cases of crimes committed by units that have not been prosecuted as a crime committed by a unit or where the unit has been deregistered in accordance with law, the people's courts may also, without pursuing the criminal responsibility of the unit, lawfully and realistically pursue the criminal responsibility of the directly responsible managers or other directly responsible personnel in the unit.
For cases of unit loan fraud that were tried after the revision of the Criminal Law and were implemented before the revision of the Criminal Law, since the old and new laws have different evaluations of whether the unit constitutes a crime, the criminal liability of the unit and its directly responsible managers and other directly responsible personnel should be comprehensively examined, and then the applicable law should be selected according to the principle of "starting with the old and treating it lightly". In the case of an entity, since it is not considered a crime under the 1979 Criminal Law, but it can constitute a crime of contract fraud under the 1997 Criminal Code, the unit cannot be punished as a crime. For the natural persons in the unit, the crime of ordinary fraud should be constituted under the 1979 Criminal Law, and the crime of contract fraud in the unit can be constituted under the 1997 Criminal Law. Under the circumstance that the conduct of the unit meets the constitutive elements of the crime of contract fraud under Article 224 of the Criminal Law, it is clear that the relevant provisions of the 1997 Criminal Law are lighter than the statutory penalties for natural persons committing this crime under the old and new laws. This is because although the statutory maximum penalty is the same as the main penalty provided for in the two, the supplementary sentence provided for in the latter is lighter, the main statutory minimum penalty stipulated in the former is controlled release, and the latter is a single fine. Therefore, a natural person who has committed a crime may be punished as the person in charge and other persons directly responsible for the crime of contract fraud in accordance with the provisions of the 1997 Criminal Code.
To sum up, in this case, the defendant Yu Hui and his responsible Vantone Company and the Recreation Business Department carried out the unit loan fraud by signing false contracts. Among them, Vantone Company and the Recreation Business Department cannot be punished as crimes, and Yu Hui should be investigated for criminal responsibility for the person in charge who is directly responsible for the crime of unit contract fraud under the 1997 Criminal Law. The procuratorate did not prosecute the unit, and the people's court correctly convicted and sentenced Yu Hui in accordance with the relevant provisions on the crime of contract fraud by the unit.