Prosecutors focus on cross-border financial crimes

Cross-border financial crimes are increasing in Shanghai as a result of the opening of the nation's financial markets and the huge flow of commodities, cash and personnel, according to a whitepaper released over the weekend.

Last year there were several cases accepted by local procuratorates concerning foreign organizations committing financial crimes in China. 

In some cases, foreign companies hired Chinese agents without approval from the nation's financial regulators.

"It's hard to anticipate if some foreign organizations travel to China for illegal activities, so we need to further promote cross-border collaboration," said Li Xiaowen, a prosecutor with the Shanghai People's Procuratorate.

Li told Shanghai Daily that some crimes, such as those related to securities, are already under strict supervision. However, it was important to enhance international cooperation.

Meanwhile, some criminals take advantage of new technologies such as artificial intelligence, blockchain and virtual currency to commit financial crimes.

"Blockchain is a highlight of financial innovation in recent years and virtual currency is an application of it," Li said.

"The People's Bank of China has issued documents to warn about the risk of virtual currency and defined the issuance and financing of virtual currency as unapproved acts. However, in some cases, criminals disguised their crimes as financial innovation and issued virtual currencies. They used virtual currencies to commit crimes such as money laundering and illegal fundraising."

In one case, a man named Chen helped a suspect, who was involved in a fundraising fraud case and fled to Hong Kong, obtain 3 million yuan (US$423,484) in illicit money by a bank transfer via his account between late October and early November 2018. 

He also sold the suspect's car, which was purchased with illicit gains, for more than 900,000 yuan and bought Bitcoins to give to the suspect.

Chen was sentenced to two years in jail with a fine of 200,000 yuan last year.

The whitepaper said Shanghai prosecutors had charged more than 4,000 people involved in finance-related crimes last year, including financial fraud, and disrupting the order of financial management, enterprise management and market.

More than 90 percent of the finance-related cases local procuratorates accepted are in connection with the banking industry, most of which are illegal fundraising crimes.

Some new crimes emerged last year, including evading foreign exchange, fraudulent purchase of foreign exchange, money laundering and illegal disclosure of important information.

Illegal fundraising is still a big problem endangering the society.

Last year, prosecutors accepted 1,407 such cases involving 2,929 people to be charged and 136 fundraising frauds with 281 people involved.

In addition to traditional means such as offline promotion or online ads, criminals now use technology to obtain citizens' personal information.