Summary:
You or a family member have been taken into custody by public security authorities for introducing foreign exchange transactions, with transaction volumes amounting to RMB 460 million, and you have heard that the sentence may exceed five years? Do not panic. This article discusses a real case: the client similarly faced the risk of being classified as a principal offender and receiving a heavy sentence, but through item-by-item reduction of the amounts involved and successfully arguing for classification as an accessory offender, the lawyer secured a suspended sentence, meaning the client avoids imprisonment. You will understand: how public security authorities will conduct their investigation, which amounts can be challenged and excluded, and how lawyers can help you strive for release.
Keywords:
Crime of illegal business operations, introducing foreign exchange transactions, suspended sentence, determination of principal and accessory offenders, defense regarding the amount involved
Main Text:
In recent years, there has been a gradual increase in criminal cases involving underground foreign exchange trading or introducing foreign exchange transactions. In judicial practice, once classified as the crime of illegal business operations, especially with significant amounts involved, individuals often face severe criminal penalties.
In this case, the client was suspected of introducing foreign exchange transactions, with transaction volumes reaching RMB 460 million, and faced the criminal risk of being classified as a principal offender and potentially sentenced to more than five years of fixed-term imprisonment. During the handling of the case, Attorney Shao Shiwei’s team focused their defense efforts on key disputed issues. Ultimately, the court accepted the defense arguments and sentenced the client to a suspended sentence.
Case Background
As the state continues to strengthen supervision over cross-border capital flows, activities such as using virtual assets for offsetting foreign exchange transactions and underground foreign exchange trading have gradually become key areas of focus for foreign exchange regulation and criminal enforcement. The Supreme People’s Procuratorate and the State Administration of Foreign Exchange have continuously released typical cases to reinforce law enforcement efforts in this area.
This case emerged against the backdrop of tightening foreign exchange regulation, where important clues were discovered by the economic crime investigation department of a certain locality during proactive investigations. Under the current regulatory environment, industry practitioners involved in businesses related to cross-border capital flows may face stricter legal scrutiny and harsher sentencing outcomes.
High-Risk Industries and Associations
In the view of Attorney Shao Shiwei, such cases typically involve multiple high-risk industries, and practitioners in these industries often face legal risks due to clients' cross-border remittance needs. The specific industries include: immigration and entry-exit service companies, overseas real estate agencies, study-abroad agencies, and financial industry practitioners (such as those in banks, securities firms, insurance companies, and fund management companies).
Due to client demands in areas such as asset allocation, investment and wealth management, and overseas property acquisition, these practitioners frequently engage with cross-border capital flows. In this context, if such practitioners recommend overseas licensed currency exchange companies or underground exchange channels to clients, they may be suspected of committing the crime of illegal business operations by introducing the buying and selling of foreign exchange.
For example, the Typical Cases on the Interface between Administrative Enforcement and Criminal Justice in the Foreign Exchange Sector, jointly released by the Supreme People's Procuratorate and the State Administration of Foreign Exchange on May 8, 2025, cited a case in the insurance industry. He Mouwei, an insurance practitioner, was sentenced to four years of fixed-term imprisonment for illegally engaging in the buying and selling of foreign exchange and introducing such transactions, involving an amount of RMB 367 million.
Key Challenges in the Case
The challenges in this case are mainly reflected in two aspects.
First, the determination of the amount involved in illegal business operations.
The currency exchange transactions involved in this case were large in scale, with a total exchange amount reaching RMB 460 million. In judicial practice, the amount involved often directly affects the characterization of the case and the sentencing range.
According to legal provisions, if the amount involved in illegal business operations exceeds RMB 25 million, it constitutes circumstances that are especially serious, and a sentence of fixed-term imprisonment of not less than five years shall be imposed. Therefore, a key point of contention in this case is how to define which transaction amounts can be included in the amount of illegal business operations and which amounts should be excluded from determination due to a lack of a complete chain of evidence.
Second, the determination of principal and accessory offenders.
In this case, the handling authorities tended to classify the party concerned as a principal offender, on the grounds that he played a key role in the entire transaction chain. The handling authorities believed that the relevant currency exchange activities were directly related to his company's business, and therefore the party had a decisive influence on the entire transaction process.
Based on Attorney Shao Shiwei's years of experience in handling such cases, in practice, many introducers who act as transaction matchmakers often believe that they did not directly participate in the fund exchange process, played a limited role in the transactions, and even do not consider their conduct to constitute a crime. However, it is not uncommon in judicial practice for introducers to be classified as principal offenders. For example, the Shanghai Pudong New Area People's Court sentenced an introducer, Sun Mou, to eight years of fixed-term imprisonment, and the Chengdu Intermediate People's Court sentenced another introducer, Gao Mou, to five years of fixed-term imprisonment.
Given that the amount involved far exceeds the statutory threshold for filing a case and there is a tendency to classify the party as a principal offender, the overall sentencing pressure in this case is significant.
Defense Strategy
Focusing on the key issues in dispute, Attorney Shao Shiwei’s team centered their defense on two core matters: the determination of principal versus accessory offenders and the calculation of the illegal business volume.
First, defense regarding the distinction between principal and accessory offenders.
The legal team systematically reviewed the client’s level of participation by considering their identity, position, and actual role within the transaction chain. They argued that the client did not hold a dominant position in the overall transaction structure, and their conduct was more akin to participation rather than organization or control. Therefore, based on a comprehensive assessment of the nature of the conduct and the degree of participation, the client’s actions were more appropriately characterized under the legal framework for accessory offenders.
Second, review and determination of the illegal business volume.
The legal team meticulously examined each relevant transaction record and fund flow, engaged in multiple rounds of communication with the handling authorities, and submitted detailed legal opinions explaining the full scope of fund flows, background facts, and transaction methods. In particular, they argued that certain transaction amounts, for which a complete chain of evidence could not be established, should not be included in the calculation of the illegal business volume.
Final Outcome
The court accepted the defense arguments and ultimately sentenced the client to probation, effectively avoiding long-term imprisonment. This judgment ensured that the client could return to society and continue normal work and life, providing an opportunity for future reintegration into society.
Case Takeaways
1. Strengthen Legal Compliance Awareness: For cases of this nature, attorneys advise professionals in immigration and entry-exit services, overseas real estate agencies, insurance, and other financial sectors to proactively enhance their legal compliance awareness to avoid the legal risks associated with illegal foreign exchange operations in cross-border fund flows.
2. Seek Timely Consultation with Professional Counsel: If you are a practitioner in these industries, it is essential to strengthen compliance reviews to ensure the legality of your business operations. If you encounter similar legal issues, it is advisable to consult with professional lawyers promptly to mitigate potential legal risks.
Success Stories
The following presents selected successful cases handled by Attorney Shao Shiwei in the fields of virtual assets and emerging cybercrimes:
《Successful Not-Guilty Defense in Fraud Case | From Facing Over Ten Years’ Imprisonment to Acquittal!》
