The lawyer's open letter calls for redress for corporate compliance fraud: the market should not just become a criminal offence

Summary: The People ' s Court of the Roadbridge District, in cases where the persons concerned have never acted as public officials, and where all the money has been transferred to the enterprise ' s account, and where the company ' s Twitter public number and small procedures have been clearly identified as acting as the deputy, and at the time of the State ' s anti-fraud campaign, found that all 4,000 businesses considered the telephones in question to be from the official business or environmental protection department, is a denial of our collective IQ.

Hello, Master Ryo!

We are the defence counsel for the six men in the second trial of the court of your jurisdiction, the six men in charge of the fraud case, Song Reze, Chang Wen, Xu Xu Xu, and I ask you to follow the case. Before I make official communication with you, I will first take two administrative penalties in Zhejiang province.

I. Punishment (2023) No. 1377 by the Wen City Correctional Service

The main violations were the establishment of the company, China-Yon (Taizhou) Hotel Management Ltd., on 12 July 2021, which was to be submitted to the public for public information on the previous year through the National Business Credit Information System (SNI) from 1 January to 30 June of that year. (b) As of 30 June 2022, the person concerned had not submitted an annual report for 2021 and had made it public; On 19 July 2023, the parties filed a supplement and published the annual report.

(b) The failure of the parties to submit the required annual report and to make it public is in violation of article 35 of the Regulations on the Registration of Market Subjects of the People ' s Republic of China; Under article 70 of the implementing regulations, a fine of $3,000 was imposed on the person concerned.

Hundreds of similar cases are available in the Zhejiang region, as shown in annex I.

II. Hanging Ring Penal Code (2021) No. 2000043

The Bureau considers that the person concerned has not filed the discharge information as required by the ERA, in violation of article 24 (3) of the Ordinance, “the enterprise's business and other producers who are required to file the ERA, shall do so on the national platform for ERA information, including basic information, the destination of the pollutant discharge, the standards for the implementation of the pollutant release and the pollution control measures taken; The requirement that a change in the information reported shall be made within 20 days of the date of its occurrence” constitutes an offence for which the required information on sewage has not been filed. Under article 43 of the Ordinance, such acts are corrected by an order of the Eco-Environmental Authority and are punishable by a fine of up to $50,000. After study, it was decided to fine the person concerned a fine of RMB 19,130.

Hundreds of similar cases are available in the Zhejiang region, as shown in annex II.

The reference to both cases was made because the accused in the present case was engaged in such work to remove the danger. The said sanctioned enterprises can complete their declarations at a cost of several hundred yuan if they contact the deputy (or the deputy) and are not subject to this penalty and are not included in the list of operating anomalies.

But the men of India and others were convicted of fraud for acts of the charade, and the men of India and Song Reze were sentenced to more than 10 years of punishment, and frankly, I am appalled and deeply sorry!

The case, which was the service of the Compliance Agent of the Business Annual Report, the Sewery Register, was the original purpose of the reform of the commercial system, but was severely punished by the courts. The whole case is free of fiction, the truth is not concealed, the victim is not misinformed and has no unlawful possession purpose and does not meet the statutory elements of the crime of fraud. The first instance judgement is detached from the actual market, distorts the law, disregards the true will of the victim, contradicts the criminal law, the objective consistency of the principals and the proportionality of the punishment, and goes against the original intent of the judiciary. I would like to inform you that you are advised to take note of this and to make an effort to correct it.

The first instance judgement found the facts as follows.

The first instance judgement found the facts as follows

From November 2023 to September 2025, the accused held the rank of Indian soldier and the other formed a company in Nanchang City, Jiangxi Province, to carry out the “business licence year” fraud and the “business sewage permit registration” fraud.

Companies purchase, screen and screen individual business owners through the Internet, such as those whose licences are overdue and those in processing plants, recruit callers, call on local electric distribution numbers and communicate with the same medium. The clerk does not identify the deputy, but only gives an accurate account of the individual business and industry, informs that the failure to process or register for sewage after the year's expiration will be included in the list of operational anomalies, imposes fines, influence legal persons' letters, directs them to pay for or enter public numbers, minor procedures, and collects fees ranging from $50 to $798 under the heading “Annual overdue payment” “Custodial fees” “Stack registration fees” and transfers receipts held by other inquisitors, among others, to deceive victims, including Taizhou.

Between November 2023 and September 2025, the accused had spent over $1.430,000 in the case of the military.

In particular, the determination of the amount of $1.430,000 is not based on a professional audit, but on a rough statistical form, which is supported by sufficient evidence to support doubt as to the authenticity of the table.

The first instance judgement found the fraud guilty of having committed fraud on the grounds that “the company was divided into the owner, team leader and telephone clerks, whose head provided the tools and equipment such as a valethe book, business information, telephone cards, the head of the team, who managed and trained the caller, who used a fixed jargon to make the victim think that the official business or environmental services were responsible for the payment of annual inspection and sewage registration fees, thereby creating fear that the victim would be punished for non-payment, thereby paying fees that would otherwise not have been required”. Nine months, five years, three years (suspension), three years (suspension).

Before proceeding with the analysis, several basic facts were not denied by the Public Prosecution Service in the trial.

The accused never claimed to be a national agent when communicating with the client (in fact, if it was shown that the telephone card would be blocked soon), and the employee was prohibited from impersonating within the company; When a client is asked, the operational staff will clearly inform the Chargé d ' affaires of the services; (a) The telephones used, the wi-fis used and the full name; Public signs and minor procedures are identified as acting (also recognized by the Public Prosecutor in court, simply “the customer cannot detect these tips during the telephone) and suggest that “the services of the State are free of charge”; (a) The business is charged in the name of the company and the client is aware that the receipt account is the company account; The fee is 50 to 798, mostly in the amount of 340; There are cases where older clients present new clients. The case counted more than 4,000 victims and only 14 public security reporters, one of whom was known to be acting as a deputy, but was in the service of a suspect of trouble at the scene; The incidence of copying of notes is widespread, even when multiple pages are only used for six minutes, and this is evident in the pre-existing form. Victims who contacted outside the courtroom indicated that they were represented by a third party.

On the basis of the above facts, the case does not constitute fraud for the following reasons

On the basis of the above facts, the case does not constitute fraud for the following reasons

I. The nature of the industry: the business involved is a legitimate market demand generated by the statutory system and is not a fraudulent industry

There are only two operations in this case: the Deputy to the Annual Licensing Report and the Chargé d ' affaires to the Register of Pollution Permits. Both are natural third-party compliance services that are derived from the landing of national commercial reforms and environmental regulatory regimes, with a clear legal basis, and have real and legal service value and are not inherently fraudulent projects.

First, the corporate annual report has a systemic basis. Under article 70 of the Rules for the Application of the Regulations on the Registration of Market Subjects, any person whose annual report is not submitted by a market subject in time will be included in the list of operational anomalies and will be liable to a fine of up to $10,000.

(b) The annual corporate announcement, although officially free of charge, is a widespread dilemma for MSMEs and individual business owners: most operators do not have a full-time finance staff, are not familiar with the filing norms and data matching rules and are easy to fill in for errors; Most deep-drop entities operate and are prone to miss the annual reporting period from January to June of each year.

The consequences of overdue and inaccurate annual reports are so serious that they are not only included in the list of business anomalies, which result in the loss of business credentials, restricted bid, the freezing of bank loans, the termination of business cooperation and, ultimately, a “breach of trust, limited access” credit discipline.

The annual press service, which is prevalent throughout the country, is the product of self-regulation by the market economy, as it is being handled at no official cost, no less than a zero threshold, no risk and no cost, and no less than a lack of professional competence, time and risk control.

Second, the DSRA has compliance value. Under article 43 of the Regulations on the Regulation of Pollution Licensing, enterprises and other producers who are required to file a pollution register are ordered to do so by the Eco-Environmental Authority, which does not comply with the requirements for filling in the sewage information, and are liable to a fine of up to $50,000.

Current environmental regulations are fully covered and regularized. Although the operation is officially free of charge, there is a general lack of dedicated environmental workers in micro-enterprises and processing plants, and it is difficult for operators to distinguish between discharge categories and emission standards, filling standards and not familiar with the operation of the public information system for sewage licensing; The relocation of enterprises, process upgrading and capacity adjustment require a change in the sewage register and face penalties for minor negligence. The demands, the threshold, the high cost of violating the law have created the demand for the Office of the chargé d ' affaires.

Third-party agencies that assist enterprises in the preparation of sewage information, standard filing, public notification and evasion of sanctions are real compliance services with real market value.

In conclusion, the case concerns two chargés, all of which are genuine, services, needs, values and compliance, and which are complementary to the decentralization of the State and the reform of credit regulation, and are not “unmeaning and worthless fraud” as described in the first instance judgement. The service fee of $50 to $798 is a reasonable trade-off between time, profession and risk management costs, and hundreds of packages of meals are years of continuous service, in line with market pricing logic and without the precondition of illegal profit.

Objective facts: no fraud, no misperceptions of the victim, total exclusion of fraud from the commission of the crime

Under article 266 of the Criminal Code and the rules of supreme law and supreme judgement, fraud is committed for an unlawful possession, for the purpose of falsifying facts, for the concealment of the truth, for the purpose of disposing of property on the basis of false knowledge and for the loss of property. One of the four is not an option. The objective facts of the case negated the fraud.

First, the perpetrator never falsely identified, impersonated a public official, and without any core fraud. (b) Strict internal regulations prohibiting the impersonation of employees as business and environmental workers; In all external communications, no staff member claims to be a national staff member. In reality, if public officials continue to make calls and charge fees, communications, platforms and the fast-track blocking of accounts are not objectively feasible — this is something that the case handlers can try on their own mobile phones at any time.

Secondly, the online operational vehicle has actively identified itself as the Chargé d ' affaires, fulfilled its obligation to inform, and the transaction was transparent and transparent, and the victim has no erroneous perception of the conduct of the Chargé d ' affaires:

1. Company micro-public numbers, micro-programs, all of which identify themselves as third party agents, and offer to inform clients that they are free of charge to register for the annual publication and sewage through official State channels; Fee-payer system company, client-detectable. These are undeniable facts.

1. It is reasonable to say that more than 4,000 customers who do not claim to be State agents, who remit their contributions into company accounts, public names and small procedures, all indicate that the deputation, anti-fraud propaganda is ongoing, are mistaken for the business or environmental protection sector and are extremely unlikely to come to the power sector. Such a determination would be tantamount to denying the basic judgement of the ordinary, even the collective IQ of our nation.

1. In evidence, the Public Prosecutor confirmed that the public signs and minor procedures were clear indications of the actions of the Chargé d'affaires, but found that the client had been deceived by “the inability of the client to view the content of the public notice in real time during the telephone communication”. This is a subjective assumption of the prosecutor, and, if this logic were followed, it would have to be asked one by one by over 4,000 clients to distinguish between those who did not see the hint, a situation which cannot be substituted for evidence by inference.

All of the victims interviewed stated explicitly that they knew that the funds had been remitted to the company ' s accounts.

We contacted several victims out of court, and we all agreed that we were aware of the chargé d'affaires.

In summary, the company ' s online carriers have fully complied with their obligation to inform by indicating their status as acting agents. The core motivation for the payment of fees to victims is not to be deceived by false information, to create false fears, but to be aware of the existence of an overdue, unregistered violation, and to buy compliance services to avoid legal penalties, eliminate the risk of rogatory and save time and effort. The risks communicated by the perpetrator are the legal consequences of the express provisions of the Regulation on the Registration of Market Subjects and the Regulation on the Regulation of Emission Licensing, which are true and not fictional risks and create panic. The fact that the statutory penalty provisions are effectively communicated does not amount to fraud in the criminal law sense, which is the most basic threshold of judicial awareness.

Third, even if the purpose of the fee is not strictly stated, the related costs are service-to-service, provided that the client is aware that the service is being provided by the Chargé d ' affaires. According to the first instance judgement, part of the fee is charged under the heading “Annual overdue fee” “Customs registration fee” for “Customs write-off fee”. The cost of several dozen to hundreds of dollars, which is close to the basic information and operating costs, is still in essence a service-priced value and cannot be considered a fraud for a mere purpose, provided that the business is aware that it is receiving third party services. Otherwise, it would be possible to conclude that the business was of the opinion that the chargé d ' affaires was a pro bono service, which was not in line with normal knowledge.

Fourth, the trade reputation can support the real and voluntary nature of the service. In this case, there was a situation where an old client introduced a new client. If the perpetrator commits fraud, false services and damage to the victim, the repurchase and referral of the client is not possible. This fact is sufficient to demonstrate that victims avoid compliance risks through the services of the Chargé d ' affaires, that they gain real value for services and that the transaction is fair and voluntary.

Fifth, the services involved were subject to substantive performance and there was no illegal possession of the property. The perpetrator did not fail to act in a manner that would assist victims in the process of checking business and sewage information, completing the online filing and public registration, and helping the enterprise to complete compliance and eliminate the risk of violations. Performance, service, value, absence of fictional services, illegal possession of another person ' s property.

III. Rebution of the core error of the first instance judgement: the subjective presumption as a substitute for objective evidence is contrary to the fundamental principles of criminal law decisions

The first instance judgement found, one-sidedly, that the person involved had mistook the victim for a call from the official authorities, had caused fear and paid the non-payment. This finding contradicts information in the case of the wi-fi public sign, the minor procedure, the chargé d ' affaires, and the fact that the expenses are transferred to the company ' s account and not to the account of the administrative unit, is subjective and the law is wrong.

First, the wrong presumption is that the victim is mistakenly aware of the rules of evidence. In the absence of a representation of public officials, an express chargé d ' affaires of official platforms, and the transparency of the collection account as a business-to-public account, the fee rate, the average reasonable person does not mistakenly believe that the State organ is responsible for the enforcement of the charges. The court of first instance ignored the objective evidence and departed from basic social and trade-related knowledge, in which it was presumed that the victim had developed a false perception, that the essence of the conviction was to find reasons for it, and that it was contrary to the principle of presumption of innocence.

Second, the error identified “notification of legal risk” as “deceptive intimidation”. (a) Repeating the consequences of the delay in punishment and of the pollution, as specified in the legislation, by informing the truth of the objective risks; As with the notification that “breaches are punishable”, it is a legal norm and in practice perpetrators are punished. The risk anxiety of the victim stems from the fact that the victim is behind schedule rather than from the perpetrator ' s words. It is absurd that the first instance should have informed the truth that the evaluation was fraud.

Third, the victim was mistakenly identified as “paying no expenses” and confused “officially free” with “no value for third-party services”. Official channels are free of charge, but compliance-reforming, professional filing, and risk-averse services are not of no value. The payment of fees by victims is by nature a purchase of professional services, time and risk security, and is a normal market transaction. The first instance denied the value of the service “officially free” and ignored the real dilemmas and rules of trade of MSMEs.

Intuitive references are made in reality: tax self-declarations are completely free of charge in the E-Tax, but a large number of individual business owners lack financial knowledge and are generally paid for by a proxy. In the logic of first instance decisions, is the operator who entrusts the account also “to pay the non-payment”? This inference is clearly contrary to social realities.

It may be argued that the chargé d ' affaires in this case is not comparable to the tax account in terms of its technical expertise. We do not deny this, but in this case the service costs range from a few dozen to several hundred dollars, far below the market price of the post-banking services, which corresponds to the technical content and cannot be denied market attributes with a limited technical content.

Fourth, a different perspective: what would be the situation now if these businesses were not “deluded and intimidated”? It is a fact that most of the business involved in the case were in a situation of late and undeclared violation when the business personnel were engaged and were themselves at risk of punishment. Even if the executive branch does not charge fees, the subjects have not completed their declarations for their own reasons and are at risk of disciplinary action; Without warning or assistance, there is a clear risk that the penalty and credit sanctions will actually be imposed, with losses well above the service fee of several hundred dollars, as illustrated by the cases in annexes I and II. Therefore, the notification of statutory risk is not an intimidation, nor is the service fee “unpaid” but rather a reasonable expense for the business to mitigate the compliance risk. The decision should not focus solely on the formal element of “official free” but should also take account of reason and reality.

iv. Judicial values and social effects: miscalculation will seriously undermine the compliance service and undermine the credibility of the judiciary

The business and environmental services involved in this case, which are widespread throughout the country, are recognized for market regulation and the tacit approval of the environmental sector as a private force that helps small and micro-enterprises to comply, reduces regulatory pressure at the grass-roots level and optimizes business environments.

The perpetrators set up companies, regulated operations and paid fees for their performance, helping thousands of self-employed and micro-enterprises to eliminate the stigma, avoid the risk of punishment, and complete compliance reform, which has the effect of achieving compliance, regulatory downside and market discipline.

In practice, operators are penalized for failing to report in a timely manner for reasons such as poor information. If more than 4,000 businesses in the case have not been declared, are they likely to be effectively punished? The number of cases of punishment is not uncommon and the adverse effects of punishment are well over several hundred dollars in service fees. The case therefore involves the services of the Office and benefits the victims.

(a) The assessment of the legitimate acts of the Office of the Deputy as criminal fraud, in terms of the order of transactions, directly affects the stability of market transactions; The service charges involved would also be refunded, while the business had de facto been served by the Chargé d ' affaires and the risk of punishment was avoided. Such treatment can easily create imbalances in rights and obligations, which in the long run may erode the foundations of social integrity and credibility.

The aim of the Penal Code is to punish crime and protect legitimate rights and interests, rather than to combat the private economy and the civilian services sector. If such acts of de facto compliance, transparency, voluntary dealing, and non-hazardous conduct by the chargé d ' affaires are deemed fraud, hundreds of thousands of compliance practitioners and numerous micro-enterprises throughout the country can be found to be involuntarily criminalized for their services. This would also undermine the business environment and the credibility of justice, contrary to the criminal law principles of guilt, humility and discretion.

V. Current problems in the Taizhou Central Court

We have filed several applications in the second trial of the case, and none of your court has agreed to it at this time.

We have filed several applications in the second trial, and none of your court has agreed to this.

We have requested to access the original code data of the public code and small program involved to ascertain whether the platform interface is marked with the word “issuing” and the associated tips, which the House has not yet accessed. According to the accused, the interface is a clear indication of “designate”.

Fourteen of our victims in the case file were brought before the court for questioning: they explicitly claimed that the money was made to the company ' s account and not to the administrative unit, and that the micro-public number and small procedure were clearly indicated to the Chargé d ' affaires; The transcripts also contained a large number of duplicate paste and even a six-minute over-page interview. The first instance judgement, which relied on the subjectivity of the 14 individuals, infers the subjectivity of more than 4,000 victims, but the court refused to grant its consent.

We have requested that the investigation of the relevant persons among the more than 4,000 victims be verified for the same reasons as mentioned above. The victims whom we have contacted by telephone say that we are aware that the men and women in charge of the Indian Army are acting as deputy, and that we want to produce evidence for submission to the court, and the court refuses on the ground that it is “necessary”.

We apply for the criminal judgement of the employees of the IPS Company who were otherwise dealt with, because their verdict directly affects the outcome of the IPS judgement, and the court refuses to grant it.

We applied for the presence of the employees concerned because the first instance judgement, which was based on the words of the employees and the amount of money they had given to the military, had been sentenced and sentenced to imprisonment, and the court refused to grant it.

We applied for access to the file of the co-accused, and the court refused to grant it.

Six accused are in this case and two are currently on appeal. We applied for the presence of other accused at the second trial, because it was the testimony of those staff members that convicted the Military Indies and the court refused to grant them.

We apply for simultaneous audio-visual access to the investigation phase. In the present case, the sentence was more than 10 years and the person concerned was acquitted, but the court provided only a few infrequently, the remainder of which were covered and could not be provided. I am deeply bitter at the fact that I have responded to this question to this day.

I am sure you understand, Your Honor, that the above-mentioned application is directly related to the sentence and sentence imposed in this case. These requests are not excessive and there is room for leave in any court in the country; The lower house of Taizhou, however, rejected it directly without giving any substantive reasons. The case is highly controversial, with two of the persons concerned sentenced to more than 10 years ' imprisonment, a nursing mother to five years ' imprisonment, and a second trial in such hasty and hastyness that, frankly, the outcome of such a treatment is indeed a source of deep disappointment to me in the administration of justice in the Tienzhou.

I'm sorry to write, but I know you a little. I am a falsely older man, and we are all at the age of the right man, the right man, the right man, the right man to do his thing. It is irresponsible to assume responsibilities, but to do so in a way that is not only national, social and self-serving.

In my earlier communication with the presiding judge, the judge mentioned the hope that there would be no emotional confrontation between the judicial personnel and the accused and their families. I can only laugh at the fact that, in the circumstances of the case alone, two young people have been sentenced to more than 10 years' imprisonment and a nursing mother to five years' imprisonment, and that it is unrealistic to expect that the person concerned and his family will not be separated.

Nor is it a simple question of position. The case was characterized by a subjective presumption of the subjective nature of 4,000 vendors, with 14 victims, and by a lack of caution. And we don't recognize our business as being deceived. To be able to take a step back, even if over $1 million were placed at the door of the court, there would be no business owners coming forward to claim it. We can also imagine what would be more beneficial to “victims” if, in the absence of a notice from the accused, the 4,000 businesses, in conjunction with annexes I and II to our submission, had already been subject to a substantial penalty far higher than the cost of the Chargé d'affaires's, and had they not been included in the list of operational anomalies.

It is also an indisputable fact that the conduct of the accused objectively contributes to the development of business and sewage management to the norm, in the context of the maintenance of the order of governance in the country. It is therefore inappropriate to use the judicial system as a pretext for avoiding the problems in the case as an excuse for misperception and disrespect of the rule of law in the country.

I would like to draw your attention to this case and to rectify the irregularities in the proceedings so that the ordinary parties can be treated fairly and impartially.

I'm glad you're here.