White-collar crime typically refers to criminal cases in the economic sphere, involving corruption within civilian-run enterprises, occupational embezzlement, misappropriation of funds and illegal business operations. Once a civilian-run enterprise becomes embroiled in criminal affairs, its bank accounts may be frozen and its senior executives may be taken into custody. In worse cases, the enterprise’s capital chain may rupture, pushing it towards bankruptcy.
From a criminal defence perspective, white-collar crime cases are often intense contests between public prosecution and the protection of private rights that are inextricably linked to the vital interests of enterprises. This article will outline how distressed enterprises and entrepreneurs can safeguard their rights with the assistance of professional lawyers during the four key stages of criminal proceedings.
Investigation
Partner, Executive Director of Hangzhou Office
Tahota Law Firm
Hangzhou Office
Tel: +86 189 5717 1803
E-mail: keshuojun@tahota.com
A criminal procedure begins with investigation. To prevent any collusion of testimony, destruction of evidence or transfer of assets, investigating authorities typically implement two types of compulsory measures at the earliest opportunity: detention or arrest of individuals; and the sealing, seizing or freezing of property.
Safeguarding the individual. By meeting with detained entrepreneurs at the earliest opportunity, lawyers can keep them calm and stable, verify core case facts, and provide essential legal analysis and support. Simultaneously, to restore their clients’ personal freedoms as soon as possible, lawyers submit their legal opinions to the investigating authorities to seek a change to the compulsory measures, such as a release on bail pending trial, thus preserving the normal operations and decision-making structures of enterprises.
Protecting the property. Lawyers can help an enterprise distinguish illegal gains from its lawful assets, demarcating corporate legal person property from shareholders’ personal property. Through the collection of materials and legal negotiations, lawyers aim to prevent the freezing of the enterprise’s daily operating accounts in excess of the required amount or the investigators’ authority, maintaining the enterprise’s liquidity to the greatest extent possible.
Review and prosecution
Upon the conclusion of an investigation, the case is transferred to the people’s procuratorate for review and prosecution. During this phase, the core objective shifts from crisis response to evidence-based defence and the application of law.
After obtaining permission to conduct a comprehensive review of the case files, lawyers compare every piece of evidence and examine its legality to identify any potential breaks in the prosecution’s logic. By submitting detailed legal opinions for innocence or a lesser offence on bases such as unclear facts, insufficient evidence, or legal argument that the conduct in question does not constitute a crime, lawyers strive to secure a decision not to prosecute or a recommendation for a more lenient sentence, while laying the groundwork for any subsequent trial proceedings.
For cases with relatively minor circumstances and limited subjective malice, lawyers would also guide an enterprise in rationally evaluating the economic costs and litigation benefits of returning illicit gains and making restitution. By facilitating settlements, obtaining pardons, and utilising the leniency system for those who confess and accept punishment, lawyers can increase the likelihood of securing a no-prosecute decision or a lenient penalty such as a suspended sentence.
Trial
If a statement of confession and acceptance of punishment has been signed during the review and prosecution stage, the trial stage task becomes clear: to ensure that the sentencing proposal in the statement is implemented as the final judgment.
If a trial begins without such a statement being signed, an enterprise or entrepreneur is in dire danger of criminal penalties. Defence at this time will focus on the following aspects:
Defining the action. The key is whether an action constituted a crime or a lesser offence. There is usually little room for compromise when pleading innocence, or for a lesser sentence. At trial, lawyers must demonstrate exceptional abilities in the cross-examination of evidence and legal interpretation to deconstruct the prosecution’s logic and strive for a verdict of innocence or a lesser sentence for the client.
Favourable sentencing. In white-collar crime cases, the distinction between liabilities of unit crimes and natural person crimes, and that between prime culprits and accomplices, can greatly affect the final sentencing. Lawyers must explore all statutory and discretionary mitigating options such as voluntary surrender, meritorious service and proactive restitution to conduct a meticulous sentencing defence, striving for a suspended sentence or the maximum possible reduction in penalty.
Enforcement
With a judgment in effect, a case enters the enforcement phase. In white-collar crime cases, in addition to sentencings on the individual, there may be economic penalties such as fines and confiscation of property, which are no small burden to bear. In enforcement practice, it is highly common for personal illegal gains to be conflated with an enterprise’s lawful operating income or a family member’s legitimate private property.
At this juncture, the core value of a lawyer lies in holding the line for property enforcement. By promptly filing objections to enforcement and providing evidence to clarify the legal ownership of specific assets, lawyers can prevent the illegal deduction of an enterprise’s legitimate operating funds and third-party property.
For white-collar crime cases, professional intervention at every stage – from crisis response during investigation to defence of conviction and sentencing during prosecution and trial, and finally to the protection of property during enforcement – directly impacts the vital interests of the enterprise.
When facing public prosecution, the protection of corporate rights is by no means self-evident. Therefore, it is recommended that enterprises engage professional criminal defence lawyers as early as possible. By presenting reasoned arguments at every procedural juncture, enterprises can maximise their prospects for personal freedom and the preservation of essential corporate assets.
Ke Shuojun is a partner and executive director of the Hangzhou office of Tahota Law Firm. She can be contacted by phone at +86 189 5717 1803 and by email at keshuojun@tahota.com
