How to quickly identify and prevent illegal fund-raising in various forms and routines？
Prevent illegal fund-raising and keep the "money bag"
There are many illegal fund-raising routines.
● At present, illegal fund-raising cases mainly involve the following three forms: first, illegally absorbing funds by investing in shares; Second, illegally absorbing funds by means of entrusted financial management; Third, illegally absorb funds by means of commodity repurchase, consignment and sale.
● Pre-laws violated by illegal fund-raising mainly include laws and administrative regulations such as Commercial Bank Law, Insurance Law, Securities Law, Securities Investment Fund Law, Banking Supervision and Management Law and Measures for Banning Illegal Financial Institutions and Illegal Financial Business Activities.
● Before investing, the public must fully understand the company’s business and the products and services it provides, and know whether the enterprise has obtained the industrial and commercial business license, whether it has obtained the approval documents from the financial supervision department, and whether the investment field is safe and reliable.
□ Our reporter Han Dandong
□ Intern Liang Chen of this newspaper
In recent years, with the improvement of people’s income level and the development of Internet technology, illegal fund-raising activities have occurred frequently. In addition to the traditional offline illegal fund-raising, there are many new forms, such as using P2P platform and paying deposit to do online tasks to earn extra money, which involve a wide range of contents and various forms of expression.
Illegal fund-raising seriously interferes with the normal financial order, affects social harmony and stability, and becomes the key target of judicial organs.
On June 1, 2020, the publicity month for preventing illegal fund-raising officially kicked off. This is the eighth publicity month to prevent illegal fund-raising, with the theme of "Keep your purse and protect your happy family".
So, what are the main forms of illegal fund-raising? What laws will be violated? For the public, if they accidentally encounter illegal fund-raising, how can they protect their legitimate rights and interests, and how can they quickly identify and prevent them?
Illegal fund-raising varies widely.
Criminal acts are intertwined.
On May 20th, the Economic Investigation Department of shenzhen public cracked an illegal fund-raising case with high returns by adopting crocodiles, involving an amount of about 89.159 million yuan.
At the end of October last year, shenzhen public Economic Investigation Department, Nanshan Police Station and other units successively received reports from investors that the "Crocodile Treasure" P2P platform operated by Shenzhen Crocodile Treasure Technology Co., Ltd. issued an announcement, and the Crocodile Treasure Platform was shut down from October 21, 2019, and the functions of platform recharge, bid opening and cash withdrawal stopped, making it impossible for investors to withdraw their investment funds.
It is reported that the Crocodile Treasure Platform was launched in November 2016, focusing on investing in crocodile-related products. The specific operation mode is that investors invest in the platform in the form of adopting crocodiles of Guangdong Hongyi Crocodile Industry Co., Ltd., and the platform promises to protect the capital and pay interest.
This is just the tip of the iceberg in the current case of illegal fund-raising.
According to Li Geqi, procurator of the Third Department of the People’s Procuratorate of Songjiang District, Shanghai, at present, cases of illegal fund-raising mainly involve the following forms:
First, illegally absorb funds by investing in shares. Criminal suspects often use the equity incentive mechanism under the guise of equity subscription to promise investors high dividend income and attract investors to invest.
Second, illegally absorb funds by entrusting financial management. In view of the investment psychology of ordinary people, criminal suspects absorb funds by means of personal loans and promise high returns. Investors hope to concentrate on the advantages of funds to obtain higher return on investment, but in fact, in order to obtain high profits, suspects often invest the absorbed money in high-risk investment fields such as other P2P platforms, and the final result is often nothing.
Third, illegally absorbing funds by means of commodity repurchase, consignment for sale, etc., without the real content of selling goods or providing services or with the main purpose of selling goods and providing services. In this kind of case, the criminal suspect apparently set up a company to sell goods or provide services. In fact, he didn’t want to make profits by consumers buying goods or receiving services, but promised to protect the principal and interest by promising investors to buy back goods at maturity or storing them for sale, taking advantage of investors’ profit-making psychology, defrauding investors’ trust and absorbing public deposits in disguise.
"The crocodile treasure platform belongs to the third form." Li Gezhen said.
According to Zheng Ning, director of the Law Department of the School of Cultural Industry Management, Communication University of China, from the current case, it mainly includes creditor’s rights, equity, commodity marketing, production and operation. Specifically, it includes: illegally raising funds in the name of expanding production and operation, investing in high-tech development, ecological environmental protection and energy projects; Apply the concept of Internet financial innovation, set up so-called P2P and other peer-to-peer lending platforms, and adopt fictitious borrowers and the use of funds to illegally raise funds; Non-financing guarantee enterprises illegally raise funds in the name of carrying out guarantee business or investment; In the name of investing in old-age apartments and joint care in different places, with high returns and providing old-age services as bait, the elderly people are lured to "join in investment" for illegal fund-raising.
Zheng Ning said that in addition, under the banner of overseas investment and high-tech development, fake or fictional internationally renowned companies set up websites, fictitious the prospect of equity listing and appreciation, or promised high expected returns for illegal fund-raising; By looking for agents in various places and setting up branches in a wider area, a multi-level and wide-ranging illegal fund-raising criminal network is formed to carry out illegal fund-raising activities; Illegal fund-raising in the name of issuing or disguised shares, bonds, lottery tickets, investment funds and other rights certificates or futures trading or pawn; Use network technology to construct "virtual" products, invest in entrusted operation, repurchase at maturity and other ways to raise funds illegally; Illegal fund-raising is carried out by means of commodity sales and leaseback, repurchase and transfer, membership development, business joining and "quick integral method".
In Zheng Ning’s view, with the continuous evolution of criminal means, three new features have emerged in illegal fund-raising:
First, the ways of illegal fund-raising are varied. Criminals have registered legitimate companies or enterprises, and under the banner of responding to national industrial policies and supporting the construction of new countryside, they have changed from traditional planting and breeding to engineering projects, scientific and technological development, investment in shares, and consumer rebates.
Second, a variety of criminal acts are intertwined. Criminals interweave illegal fund-raising with pyramid schemes, contract fraud and other economic crimes. They use pyramid schemes to brainwash fund-raisers first, promise various preferential conditions and profit models, and then lure fund-raising and set them up layer by layer. Generally, in the initial stage of fund-raising, criminals often actively "honor" the promise of return, defraud the trust, attract more people to join, and the scale of fund-raising is rapidly enlarged geometrically.
Third, illegal fund-raising publicity at all costs, using the media to create momentum. Such as hiring celebrity endorsements, publishing exclusive articles in some media, and using reports to publicize the "performance" of illegal enterprises; Put some illegal fund-raising funds into public welfare undertakings or make donations; Hire salesmen to rush into the community to distribute leaflets and spread fund-raising information; Organize various activities, and cash dividends on the spot, so that participants can taste the sweetness first and publicize the "appearance statement" for illegal fund-raising activities.
Give prominence to key points and prevent early attacks and small ones.
Clear division of labor and strengthen cooperation
Li Geqi analyzed that illegal fund-raising also has distinct characteristics of secondary illegality. The pre-existing laws violated by it mainly include commercial banking law, insurance law, securities law, securities investment fund law, banking supervision and management law and measures for banning illegal financial institutions and illegal financial business activities and other laws and administrative regulations. The criminal laws involved are mainly the crime of illegally absorbing public deposits, the crime of issuing stocks, corporate bonds and fund-raising fraud without authorization.
In Zheng Ning’s view, those who engage in illegal fund-raising activities should be given administrative penalties such as confiscation of illegal income, fines and banning of institutions engaged in illegal financial business, and those who constitute a crime should be investigated for criminal responsibility according to law. Participation in illegal fund-raising activities is not protected by law.
According to Zheng Ning, the relevant laws clearly stipulate that the losses incurred by participating in illegal public deposits and illegal fund-raising activities shall be borne by the participants themselves, and the debts and risks formed shall not be passed on to the state-owned banks, other financial institutions and any other units that have not participated in illegal public deposits and illegal fund-raising activities. After the liquidation of creditor’s rights and debts, if there is any illegal property left, it shall be confiscated and turned over to the central treasury on the spot. In the process of banning illegal absorption of public deposits and illegal fund-raising activities, local governments are only responsible for organizing and coordinating work, and cannot adopt financial allocation to make up for the losses caused by illegal fund-raising.
To prevent and combat illegal fund-raising, Zheng Ning suggested:
First of all, highlight the key points and prevent early strikes. It is necessary to highlight peer-to-peer lending, private equity funds, pension services, virtual currency, e-commerce and other industries, highlight key groups such as the elderly and young students, highlight key areas such as station squares, market business districts and elevators, and do a good job in publicity and education.
Secondly, clear division of labor and strengthen cooperation. It is necessary to pay equal attention to territorial management responsibility and industry supervision responsibility, strengthen cross-departmental and cross-regional cooperation among member units and counties to prevent and combat illegal fund-raising, and enhance the pertinence and effectiveness of publicity and education on preventing and combating illegal fund-raising.
Finally, adjust measures to local conditions and pay attention to actual results. It is necessary to broaden the channels and enrich the forms of publicity.
In Li Geqi’s view, in preventing illegal fund-raising crimes, the government and relevant departments should further strengthen public opinion propaganda so that ordinary people can fully understand the lure and deception of illegal fund-raising; For the administrative department for industry and commerce, the audit of company establishment should be strengthened. If it is found that a company lacks physical business activities and is suspected of illegal fund-raising, it should not be approved for establishment, and if it has been established, it should be shut down in time. In cracking down on illegal fund-raising criminal activities, the judicial organs should comprehensively collect relevant evidence, effectively protect the legitimate rights and interests of investors, and truly do nothing wrong.
Middle-aged and elderly people are easily deceived.
Carefully identify prudent investments.
The public interviewed randomly by the reporter of Legal Daily is more curious about who is more likely to be the focus of illegal fund-raising and what characteristics the victims of illegal fund-raising generally have.
In this regard, Li Geqi said that the targets of illegal fund-raising activities are mainly those groups with willingness to invest, idle funds and lack of understanding of new investment models such as Internet finance. In judicial practice, middle-aged and elderly people are more easily confused by illegal fund-raising activities. Because this part of the group generally has a certain economic foundation and willingness to invest, but the investment channels in society are relatively scarce, and this part of the group has a low ability to resist risks and is unwilling to bear higher risks, and the bank’s wealth management products have either lower interest rates or higher risks, so illegal fund-raising investment activities that promise to protect capital and interest meet the investment psychology of this group to some extent.
In Zheng Ning’s view, at present, the fields with high financial risks such as illegal fund-raising include financing intermediaries, peer-to-peer lending, private equity funds, film and television culture, wholesale and retail, e-commerce, real estate, trading places, agricultural cooperation organizations, resource development, old-age care services, medical care, private education and other industries.
"Most people who are most likely to be deceived are left-behind elderly people, migrant workers, college students, retirees and other groups." Zheng Ning said that most of these people have two characteristics. First, they have a lot of idle funds in their hands and are eager for stable and high-yield investment channels; Second, there is a folk lending custom in the human society, and the victims have personal trust in the illegal depositors. No matter whether people encounter difficulties in life or production, the first thing they think of is to turn to relatives and friends for help to tide over the difficulties. If there is a way to get rich, they need to raise funds, and it is even more necessary to "share the blessings", attract acquaintances to join in, and acquaintances find acquaintances again, forming a direct and indirect human network.
So, how should the public quickly identify and prevent illegal fund-raising? If you accidentally encounter illegal fund raising, how can you protect your legitimate rights and interests?
"Before investing, the public must fully understand the company’s business and the products and services it provides, and know whether the company has obtained the industrial and commercial business license, whether it has obtained the approval documents from the financial supervision department, and whether the investment field is safe and reliable." Zheng Ning said.
Li Geqi suggested that the public should first recognize the nature and harm of illegal fund-raising, consciously resist all kinds of temptations, calmly analyze investment projects with high returns and get rich quickly, and avoid being deceived. Secondly, when investing, we should fully understand the content of investment and the qualifications of enterprises, and combine the characteristics of illegal fund-raising, focusing on whether the fund-raising activities are approved and whether high returns are promised. For those investments that have no physical business activities and promise high returns, we should be vigilant. Generally speaking, investors should be extra careful when the investment interest rate is higher than 10%. Finally, to enhance the awareness of rational investment, high returns are often accompanied by high risks, which need to be carefully identified and carefully invested.
Li Geqi said that if you accidentally encounter illegal fund-raising, you should keep relevant evidence in time and call the police in time. In particular, important investment vouchers such as investment contracts, receipts, agreements and payment vouchers must be properly kept by investors. In addition, in practice, it is often because of the delay in reporting the case by investors that the judicial organs can’t seize the relevant evidence at the first time, and finally because of the loss of important evidence, the relevant personnel can’t be held accountable.
Cartography/Li Xiaojun