Special Disclaimer: This article is an original work by Attorney Shao Shiwei. It reflects only the personal views of the author and does not constitute legal advice or a legal opinion on any specific matter. For article reprints, legal consultations, or business exchanges, please add: sswls66

Providing bank cards, WeChat Pay accounts, Alipay accounts, or other means to assist others in transferring funds may implicate the assisting party in relevant criminal offenses under the Criminal Law if the upstream activities are suspected of constituting criminal offenses.This article will sequentially introduce the potential criminal offenses associated with such conduct: the crime of aiding information network criminal activities; the crime of concealing or disguising the proceeds of crime and the gains derived therefrom; the crime of illegal business operations; or complicity in the upstream criminal offense, resulting in liability for the same offense as the upstream crime (such as the crime of operating a casino, the crime of fraud, etc.).
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By Attorney Shao Shiwei

First Offense:

Crime of Aiding Information Network Criminal Activities (commonly referred to as the "Bangxin" offense)

The "Bangxin" offense has currently become the most prevalent charge within the chain of telecommunications and online fraud crimes, playing a significant role in the payment and settlement segment.
The more common modus operandi for the "Bangxin" offense involving assistance in fund transfers is as follows:Upstream criminals identify providers of bank cards or obtain information on bank cards pending transfer in advance. The actor either operates independently or cooperates with others (traders) to facilitate the transfer by providing relevant information (such as disclosing account numbers and passwords, or assisting with facial recognition verification). However, in most cases, the actors are unable to provide basic information regarding the counterparties in the upstream and downstream transactions, and they remain unclear about the purpose of the funds.
The crime of aiding information network criminal activities is stipulated in Article 287-2 of the Criminal Law,where the subjective element is characterized by knowledge, which constitutes a form of generalized intent. The threshold for establishing such knowledge is not high; it suffices that the actor recognizes the possibility that others may be using information networks to commit criminal offenses.Its objective aspect is manifested by, engaging in conduct that assists others in carrying out fund payment and settlement.
[Crime of Aiding Information Network Criminal Activities]Whoever, knowing that another person is using an information network to commit a crime, provides technical support such as internet access, server hosting, network storage, or communication transmission for such crime, or provides assistance such as advertising promotion or payment and settlement, where the circumstances are serious, shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention, and shall also be fined or fined separately. Where a unit commits the crime specified in the preceding paragraph, the unit shall be fined, and the persons directly in charge and other directly responsible persons shall be punished in accordance with the provisions of the first paragraph. Where the acts described in the preceding two paragraphs simultaneously constitute other crimes, conviction and punishment shall be imposed in accordance with the provisions prescribing heavier penalties.
Regarding how to presume whether the actor had knowledge, Article 11 of the Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Application of Law in the Handling of Criminal Cases Involving Illegal Use of Information Networks, Aiding Information Network Criminal Activities, and Other Matters enumerates six specific circumstances.
(1) Continuing to engage in the relevant conduct after being notified by regulatory authorities; 
(2) Failing to perform statutory management duties after receiving reports; 
(3) The transaction price or method is obviously abnormal;
(4) Providing programs, tools, or other technical support or assistance specifically used for illegal or criminal activities; 
(5) Frequently adopting measures such as concealed internet access, encrypted communications, or data destruction, or using false identities to evade regulatory oversight or circumvent investigations; 
(6) Providing technical support or assistance to help others evade regulatory oversight or circumvent investigations;
(7) Other circumstances sufficient to establish that the actor had knowledge.
Given the actor’s insufficient subjective awareness of whether upstream criminal conduct existed, and in accordance with the principle that culpability and punishment should be commensurate, the author considers it more reasonable to find that the actor committed the offense of aiding information network criminal activities, rather than the more serious offense of concealing or disguising criminal proceeds and gains therefrom.

Second charge:

Offense of Concealing or Disguising Criminal Proceeds and Gains Therefrom (abbreviated as “concealment offense”)

In judicial practice, whether providing bank cards and similar assistance for fund transfers is characterized as the offense of aiding information network criminal activities or as the concealment offense remains contentious. Due to ambiguous standards for determining the actor’s subjective knowledge, inconsistent judgments in similar cases are relatively common.
Taking two cases handled by the author [1] (both with final and effective judgments) as examples, the facts were strikingly similar: the actors provided their bank card accounts to others for use and cooperated by scanning QR codes, entering payment passwords, and performing related operations. The actors had no knowledge of the source of the funds involved, the nature of the funds, or the identities of their upstream counterparts. With respect to the incoming funds, only a portion was verified to correspond to identified victims. One actor was convicted of the offense of aiding information network criminal activities, while the other was convicted of the concealment offense.
The concealment offense is set forth in Article 312 of the Criminal Law. This offense provides two sentencing ranges, with a maximum term of seven years’ fixed-term imprisonment.
[Offense of Concealing or Disguising Criminal Proceeds and Gains Therefrom]Whoever, knowing that property constitutes criminal proceeds or gains derived therefrom, harbors, transfers, purchases, sells on behalf of others, or otherwise conceals or disguises such property shall be sentenced to fixed-term imprisonment of not more than three years, criminal detention, or public surveillance, and shall also be fined or fined separately; if the circumstances are serious, the sentence shall be fixed-term imprisonment of not less than three years and not more than seven years, and a fine. Where a unit commits the offense described in the preceding paragraph, the unit shall be fined, and the persons directly in charge and other directly responsible persons shall be punished in accordance with the provisions of the preceding paragraph.
Conduct involving the provision of account information to assist others in transferring funds may, in some instances, be regarded as providing payment and settlement assistance, and may also be viewed as assisting upstream offenders in harboring or transferring funds. If the actor is to be punished for the more serious of the overlapping offenses, judicial authorities will generally tend to find that the actor has committed the concealment offense.

Distinctions between the offense of aiding information network criminal activities and the concealment offense, and defense strategies:

1. Whether there was subjective knowledge of assisting others in transferring illicit funds

Some views hold that the offense of aiding information network criminal activities, as an accessory to upstream crimes, occurs during the commission of the upstream crime, i.e., before the upstream crime is completed; other views maintain that this offense can also occur after the upstream crime has been completed. For situations falling under the first view, there is little controversy in characterizing the conduct as the offense of aiding information network criminal activities; under the second view, the conduct bears greater similarity to that constituting the concealment offense.
The offense of concealing or disguising the proceeds of crime constitutes an ex post facto aiding act, namely providing assistance by harboring or transferring funds while knowing that such funds are the proceeds of another person’s criminal activity.Where it cannot be verified which stage of the criminal scheme the actor’s bank card was used in, whether there was any communication of criminal intent with the perpetrators of the upstream offense, or whether the actor knowingly assisted in transferring illicit proceeds, and the actor merely knew that the assisted transfer might be used for illegal or criminal purposes, then, in accordance with the principles that doubts should be resolved in favor of the defendant and that punishment should be commensurate with the crime and criminal responsibility, the author considers it more appropriate to characterize the assisted transfer as the offense of illegally assisting information network criminal activities.

2. Whether the assisted transfer was conducted using the actor’s own bank account or that of another person

Pursuant to the judicial interpretation on telecom fraud, criminal liability for the offense of concealing or disguising the proceeds of crime shall be pursued in the following circumstances.

Opinions of the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Public Security on Several Issues Concerning the Application of Law in Handling Criminal Cases Such as Telecom Network Fraud

III.(5) 3. Repeatedly using, or using multiple, credit cards or fund payment and settlement accounts opened with identification documents not belonging to oneself, or repeatedly employing abnormal means such as obscuring cameras or disguise, to assist others in transferring funds, cashing out, or withdrawing cash; 4. After providing others with credit cards or fund payment and settlement accounts opened with identification documents not belonging to oneself, subsequently assisting others in transferring funds, cashing out, or withdrawing cash;

Opinions (II) of the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Public Security on Several Issues Concerning the Application of Law in Handling Criminal Cases Such as Telecom Network Fraud

(1) Repeatedly using, or using multiple, collection codes, online payment interfaces, and the like opened with identification documents not belonging to oneself, to assist others in transferring funds, cashing out, or withdrawing cash;
If the judicial authorities initially characterize the actor’s conduct as the offense of concealing or disguising the proceeds of crime, it may be considered to advance a defense for a lesser offense based on the offense of illegally assisting information network criminal activities. According to the judicial interpretation on that offense, conviction requires payment amounts exceeding RMB 200,000, and the only sentencing range is imprisonment of not more than three years.Thus, the threshold for establishing the offense of illegally assisting information network criminal activities is higher than that for the offense of concealing or disguising the proceeds of crime.

Third charge:

Fraud (as an accomplice to the upstream offense)

 
The crime of fraud is stipulated in Article 266 of the Criminal Law, which provides three tiers of sentencing ranges: less than three years, three to ten years, and more than ten years.
[Crime of Fraud]Whoever defrauds public or private property, if the amount involved is relatively large, shall be sentenced to fixed-term imprisonment of not more than three years, criminal detention, or public surveillance, and shall also, or shall only, be fined; if the amount involved is huge or there are other serious circumstances, the offender shall be sentenced to fixed-term imprisonment of not less than three years but not more than ten years, and shall also be fined; if the amount involved is especially huge or there are other especially serious circumstances, the offender shall be sentenced to fixed-term imprisonment of not less than ten years or life imprisonment, and shall also be fined or have his property confiscated. Where this Law provides otherwise, such provisions shall apply.
The crimes of fraud, concealment or disguise of proceeds of crime, and aiding information network criminal activities impose different levels of requirement for the perpetrator’s subjective knowledge of another person’s criminal conduct. The crime of aiding information network criminal activities only requires that the perpetrator knows that another person may commit a criminal act; the crime of concealment or disguise of proceeds of crime requires knowing that the funds are illicit proceeds and still assisting in their transfer; whereas the crime of fraud requires that the perpetrator conspires with the principal offender of fraud, meaning that the perpetrator has a certain awareness of the other person’s commission of the fraudulent act itself. If the perpetrator’s conduct simultaneously constitutes both the crime of aiding information network criminal activities and the crime of fraud, the offender shall be convicted and punished under the heavier offense.

In light of legal provisions and experience from judicial practice, using the degree of subjective knowledge as the criterion, cases where assistance in fund transfers is suspected of constituting a crime can be summarized into the following scenarios:

1. With KnowledgeKnowing that another person is committing online fraud and promising to provide assistance in fund transfers afterward, the perpetrator shall be determined as an accomplice to the crime of fraud.
2. Without Prior KnowledgeAnother person commits online fraud, and after learning of it afterward, the perpetrator assists in transferring funds on multiple occasions; the perpetrator shall be determined as an accomplice to the crime of fraud.
3. No Prior Conspiracy withthe Other Party, and having only a general awareness that the other party may engage in illegal or criminal activities, the perpetrator provides assistance in fund transfers and shall be determined as having committed the crime of aiding information network criminal activities.
4. Without prior conspiracy with others, and with knowledgethat the funds were proceeds obtained by others through criminal conduct, providing assistance in transferring such funds constitutes the crime of concealing or disguising the proceeds of crime.
We will explain this in detail using a case [2]. In that case, the defendant Yu committed two criminal acts:
[Act One]Around October 2020, Yu provided his own WeChat payment codes and those acquired from others to facilitate payment and settlement services for telecommunications network fraud activities carried out by others. The aforementioned WeChat payment codes collectively received over RMB 230,000. Yu communicated with others using encrypted chat applications.
[Act Two]Around December 2020, acting under the direction of an upstream accomplice, Yu organized others to assist in cashing out. The victim had been defrauded of RMB 500,000.
The court of first instance held that, in accordance with legal provisions, Yu’s use of encrypted communications itself could establish that he subjectively knew that others were utilizing information networks to commit crimes, and that he objectively organized personnel to assist others in withdrawing cash. Therefore, he should be treated as an accomplice to the upstream crime.
The court of first instance convicted Yu of fraud and sentenced him to twelve years’ imprisonment. Dissatisfied with the judgment, Yu filed an appeal.
The court of second instance held that, with respect to Act One, there was no conspiracy between Yu and the perpetrators of the upstream crime, nor did Yu have specific knowledge of the fraudulent acts; thus, his conduct constituted the crime of aiding information network criminal activities. With respect to Act Two, the upstream criminal act had already been completed before Yu organized others to cash out the fraudulently obtained funds; therefore, Yu’s conduct constituted the crime of concealing or disguising the proceeds of crime.
The court of second instance convicted Yu of the crime of aiding information network criminal activities, sentencing him to one year’s imprisonment, and of the crime of concealing or disguising the proceeds of crime, sentencing him to four years and six months’ imprisonment. Combining the punishments for multiple crimes, the court sentenced him to five years’ imprisonment.

Analysis:

 
Whether considered from the perspective of the amount involved in the case, or the perpetrator’s degree of participation in and subjective knowledge of the upstream crime, the severity follows a progressive hierarchy: fraud > concealment or disguise of criminal proceeds > aiding information network criminal activities.
In the first-instance trial of this case, the court did not distinguish between Yu’s two acts separately; instead, it consolidated them (because the upstream party was the same person) and held that Yu’s acts played an irreplaceable role in the implementation of the upstream crime within the overall fraud scheme. Accordingly, both acts were to be handled as part of the upstream fraud offense.
However, in the second-instance proceedings, defense counsel argued for separate convictions for the two acts and advanced a mitigation defense, focusing on the perpetrator’s subjective awareness of others’ criminal intent and the presence or absence of conspiratorial intent. Furthermore, because Act One fell within Article 11(5) of Judicial Interpretation [2019] No. 15 (frequently employing measures such as concealed internet access, encrypted communications, data destruction, or the use of false identities to evade regulatory oversight or circumvent investigations), it was determined to constitute the crime of aiding information network criminal activities. In Act Two, although Yu knew the funds were proceeds of crime, he did not know they were derived from another person’s online fraud; therefore, his conduct constituted neither the crime of aiding information network criminal activities nor the crime of fraud.
The author believes that, although Yu repeatedly assisted the same upstream party by providing transfer and collection services,the victims involved in the two acts were not the same group; thus, the second-instance court’s approach of analyzing Yu’s two acts separately was more scientific and reasonable.

Fourth Charge:

Crime of Illegal Business Operations—Acting as an Instrument for Improper “Illegal Payment-Settlement Schemes” Money-Laundering Teams

 
““Illegal payment-settlement schemes” refer to conduct whereby a perpetrator assists upstream offenders engaged in online gambling, telecom fraud, and other unlawful or criminal activities by facilitating fund transfers and handling payment settlements, thereby enabling upstream criminals to move funds, while the perpetrator receives commissions. The following two cases are presented:
Case One:The defendant Gan and others developed a payment-receiving app and linked bank cards to serve as a receiving platform interfacing with overseas gambling websites. The gambling websites provided Alipay collection codes to users, and funds topped up by users were directly deposited into the bank cards linked to Alipay. After deducting a 2% service fee, the platform settled the remaining proceeds with the gambling website.[3]
Case 2:The defendant, knowing that the funds on a certain platform were proceeds from online gambling, and in order to obtain commissions on platform top-ups, repeatedly used his own and others’ bank cards to receive users’ top-up funds, and then transferred such funds to the accounts of upstream platform operators for payment and settlement. [4]
Pursuant to the relevant provisions set out below, non-bank institutions engaging in payment and settlement business shall obtain approval from the People’s Bank of China and secure a Payment Business License. Where an actor, for profit, acquires bank cards in large quantities and engages in bulk collection and payment services, thereby forming a “fund pool,” such conduct is suspected of constituting the crime of illegal business operations.

Criminal Law

 
Article 225 [Crime of Illegal Business Operations]Whoever, in violation of state regulations, commits any of the following acts of illegal business operations, thereby disrupting market order, if the circumstances are serious, shall be sentenced to fixed-term imprisonment of not more than five years or criminal detention, and shall also, or shall only, be fined an amount of not less than one time but not more than five times the illegal gains; if the circumstances are especially serious, he shall be sentenced to fixed-term imprisonment of not less than five years, and shall also be fined an amount of not less than one time but not more than five times the illegal gains, or have his property confiscated: ... (3) engaging in fund payment and settlement business without approval from the relevant state authorities;

Minutes of the Symposium of the Supreme People’s Procuratorate on Issues Concerning the Handling of Criminal Cases Involving Internet Finance 

 
(III) Determination of Illegal Business Operations Involving Fund Payment and Settlement
18. Payment and settlement business (also referred to as payment business) refers to the service of transferring monetary funds provided by commercial banks or payment institutions between payers and payees. Non-bank institutions engaging in payment and settlement business shall obtain approval from the People’s Bank of China and secure a Payment Business License, thereby becoming payment institutions. Conducting such business without obtaining a payment business license violates Article 4, Paragraph 1, Items (3) and (4) of the Measures for Banning Illegal Financial Institutions and Illegal Financial Business Activities, undermines the licensing system for payment and settlement business, and endangers the order and security of the payment market. If the circumstances are serious, Article 225, Item (3) of the Criminal Law shall apply, and criminal liability shall be pursued for the crime of illegal business operations.
Specific scenarios: (1) Operating online payment business based on customer payment accounts without obtaining a payment business license.
In Case 1, the court held that, regarding whether the defendant constituted the crime of aiding information network criminal activities or the crime of illegal business operations, the defendant’s act of developing an app as an online payment platform to collect and transfer funds for gambling-related merchants and charging handling fees for profit, without having obtained a Payment Business License, constituted the crime of illegal business operations. In addition, the defendant’s act of providing technical support to the platform simultaneously violated the provisions on the crime of aiding information network criminal activities; therefore, the heavier penalty among the two offenses should be applied, and the defendant was convicted of the crime of illegal business operations.
In Case 2, the defendant was initially detained on suspicion of the crime of illegal business operations, but the court ultimately convicted the defendant of the crime of aiding information network criminal activities.

Analysis:

If the actor does not act for business purposes and does not serve as an intermediary in the form of a fourth-party payment platform, but merely provides bank cards to facilitate transfers, such conduct does not constitute illegal business operations. Depending on the specific conduct and subjective awareness, the actor may be suspected of committing the crime of aiding information network criminal activities or the crime of concealing or disguising the proceeds of crime.
If the actor acts for business purposes, and considering factors such as the amount settled for upstream crimes, the method of obtaining profits, and the degree of conspiracy with upstream crimes, if it is determined that the actor’s conduct has reached the level of undermining the licensing system for payment and settlement services and seriously disrupting market order, it is more likely that the actor will be found guilty of the crime of illegal business operations.

Fifth Charge:

Crime of Opening a Casino (Accomplice to Upstream Crimes)

 
In the preceding discussion on the crime of illegal business operations, reference was made to “paofen” activities that provide payment and settlement services for upstream unlawful and criminal conduct. This article on the crime of opening a casino will continue the analysis.
Gambling websites collaborate with platforms or users involved in illegal payment-settlement schemes to launder gambling funds. The pool of individuals who provide their bank cards under the guise of part-time work or helping friends, or share their payment receipt information in exchange for “benefit fees,” is extensive, and includes a significant number of enrolled university students.
The process of money laundering through paofen can be briefly understood as follows:Overseas online gambling websites, in order to “launder” gambling funds, collaborate with paofen platforms or paofen users. Gambling participants transfer funds to the bank cards or payment codes of paofen personnel, who, after deducting a certain handling fee, remit the gambling funds to the gambling websites.
A more covert new method involves online gambling criminals recruiting part-time paofen personnel to buy and sell virtual assets, after which the paofen personnel withdraw the funds to wallet addresses on the paofen platform.
Regarding conduct that assists gambling websites in money laundering through paofen, a review of cases containing the keywords “paofen” and “opening a casino” reveals that such conduct is frequently charged as either accomplice liability for the crime of opening a casino or the crime of aiding information network criminal activities.
The crime of opening a casino is stipulated in Article 303, Paragraph 2 of the Criminal Law, which provides two tiers of sentencing. The first tier carries a sentence of less than five years’ imprisonment. Compared with the sentencing range of less than three years’ imprisonment for the crime of aiding information network criminal activities, the latter is clearly the lesser offense.
[Crime of Operating a Casino]Whoever operates a casino shall be sentenced to fixed-term imprisonment of not more than five years, criminal detention, or public surveillance, and shall also be fined; if the circumstances are serious, the offender shall be sentenced to fixed-term imprisonment of not less than five years but not more than ten years, and shall also be fined.
However, as “illegal payment-settlement schemes” constitute a new type of cybercrime, the phenomenon of “different judgments for similar cases” across various local courts remains widespread. For example, in Criminal Judgment No. 220 (2021) Xiang 3127 Xing Chu and Criminal Judgment No. 309 (2021) Gan 08 Xing Zhong, both cases involved defendants who, knowing that others were operating gambling websites, provided payment and settlement assistance. In one case, the defendant was convicted of the crime of operating a casino, while in the other, the defendant was convicted of the crime of aiding information network criminal activities.

Regarding whether the act of providing payment and settlement assistance to gambling websites constitutes the crime of operating a casino or the crime of aiding information network criminal activities, the author believes that the following defense points may be raised from the perspective of seeking a lighter charge.

1. Did the person assisting with transfers have “knowledge” of the upstream act of operating a casino?

“Knowledge” can be further divided into specific knowledge and general knowledge. If the person assisting with transfers was merely aware of the upstream act of operating a casino but was not directly employed by the operator of the upstream casino, nor did they communicate directly with such operator, the author believes it may be argued that the person assisting with transfers committed the crime of aiding information network criminal activities.

2. Did the person assisting with transfers engage in “conspiracy” with the perpetrators of the upstream casino operation?

If the person assisting with transfers did not actually participate in the establishment, operational maintenance, or collection of funds from users of the upstream gambling website, and was not a member of the upstream criminal syndicate, but only communicated regarding the intent to commit the offense of assisting with receipts and payments, the author believes that the person assisting with transfers did not engage in “conspiracy.”

3. What specific assistance did the person assisting with transfers provide?

If the person assisting with transfers provided assistance only to specific individuals involved in the upstream casino operation, rather than providing assistance to the gambling website as a whole, the author believes that their conduct should not constitute accomplice liability for the crime of operating a casino, and should instead be treated as the crime of aiding information network criminal activities.

4. The specific transfer transaction records of the person assisting with transfers

According to the Opinions on Several Issues Concerning the Application of Law in Handling Cases of Cyber Gambling Crimes, “whoever provides fund payment and settlement services to gambling websites, collecting service fees amounting to RMB 10,000 or more, or assisting in collecting gambling funds amounting to RMB 200,000 or more, shall be established as an accomplice to the crime of operating a casino.” If the transaction volume does not reach this threshold, and the conduct otherwise meets the constituent elements of the crime of aiding information network criminal activities, it shall be treated as the crime of aiding information network criminal activities.
The primary method for circulating funds derived from cybercrime involves transferring such funds multiple times through bank cards and other instruments to achieve money laundering objectives. Since October 2020, the “Card Breaking” campaign has been implemented nationwide to combat telecommunications and online crime and eradicate black and gray market industrial chains, resulting in a surge of such cases. However, inconsistent judgments in similar cases remain prevalent in judicial practice. By analyzing common charges and their characteristics associated with lending accounts to facilitate transfers for others, this article aims to provide strategies for not-guilty defenses and mitigation defenses for defendants in such cases, while safeguarding their legitimate rights and interests.
  

Notes:
1. (2021) Hu 0115 Xing Chu No. 4254; (2022) Hu 0107 Xing Chu No. 773

2. (2021) Qian 0123 Xing Chu No. 96; (2021) Qian 01 Xing Zhong No. 513

3. (2020) Gan 0923 Xing Chu No. 139

4. (2021) Min 0421 Xing Chu No. 6