Perspective | Understand the Calculation of Amounts in Non-Deposit-Taking Criminal Cases in One Article
Published:
2025-11-10
As a typical example of current mass-involved economic crimes, the crime of illegally absorbing public deposits directly determines the severity of sentencing—and even delineates the boundary between criminal liability and non-criminal behavior—making it a "battleground" in criminal defense. However, in judicial practice, controversies and disagreements persist regarding the determination of the amount involved in such illegal absorption cases, particularly concerning issues like the criteria for assessment, the accumulation of amounts, and applicable deductions. Given that public security authorities typically commission auditing firms to evaluate the exact amounts of illegal absorption, losses, commissions, and other financial details after reviewing case materials such as backend data, fund transaction records, statements from investors, investment contracts, and transfer receipts submitted by complainants. Yet, the audits conducted by these firms often involve little more than extracting, listing, organizing, and performing basic calculations on the available data. To clarify the ongoing disputes over how the amount involved in illegal absorption crimes should be calculated—and thereby ensure an objective and accurate determination of the criminal sum—the author, drawing from personal experience defending clients in such cases, has systematically summarized and outlined the relevant calculation rules as follows.
As a quintessential example of current mass-involved economic crimes, the determination of the amount involved in the crime of illegally absorbing public deposits directly affects the severity of sentencing—and even defines the boundary between guilt and innocence—making it a "battleground" in criminal defense. Yet, in judicial practice, controversies and disagreements persist regarding how to ascertain the amount involved in such crimes, particularly concerning issues like identification criteria, cumulative calculation of amounts, and allowable deductions.
Given that public security authorities typically commission audit firms to assess the amount of illegal fundraising involved, the losses incurred, and related commissions—after reviewing case materials such as background data retrieval, financial transaction records linked to the case, statements from investors, investment contracts, and proof of fund transfers—they often find that the audits conducted by these firms are limited to merely extracting, listing, organizing, and performing basic calculations. To clarify the ongoing disputes over how the amount of illegal fundraising is calculated and to objectively and accurately determine the true scale of the crime, the author, drawing from defense experience gained in handling such cases, has summarized and systematized the relevant calculation rules as follows.
I. Basic Calculation Rules Regarding the Amount of Crime: The total amount of funds absorbed by the perpetrator shall be calculated in full, limited only to the funds involved in the portion that has been reported to the authorities.
Article 5, Paragraph 2 of the "Opinions on Several Issues Concerning the Handling of Criminal Cases Involving Illegal Fundraising," jointly issued by the Supreme People's Court, the Supreme People's Procuratorate, and the Ministry of Public Security, as well as Article 6, Paragraph 1 of the Supreme People's Court's "Interpretation on Specific Questions Regarding the Application of Laws in the Trial of Criminal Cases Involving Illegal Fundraising," clearly stipulate: "The amount of illegally absorbed or disguisedly absorbed public deposits shall be calculated based on the total funds actually absorbed by the perpetrator." According to these provisions, the determination of the amount involved in illegal fundraising crimes should, in principle, be based on the full amount of funds absorbed—whether by summing up each individual non-compliant investment transaction or by aggregating the investment amounts contributed by each participant in the fundraising activity.
Given that, in judicial practice, not all investors have chosen to file a police report for various reasons, there is ongoing debate over whether the amounts invested by those who did not report—yet whose participation is still reflected in the system's backend—can be included together with the funds officially reported as absorbed. In my view, since these individuals have not filed a report, the nature of the funds involved remains uncertain, and thus it would be inappropriate to classify these amounts as non-absorbed funds. Therefore, the "total amount of funds absorbed by the perpetrator" should be limited solely to the sum of investments reported by those investors who have already filed complaints.
II. Regarding whether the amount of crime needs to be calculated cumulatively: Distinguishing between "re-investment" and "continued investment"
By definition, " Revote “As the name suggests, it refers to the act of reinvesting the funds—after investors have recovered their principal and interest (either fully or partially)—into non-pyramid schemes upon maturity of the investment period. On the other hand, ‘reinvestment’ means that instead of withdrawing the principal and interest at maturity, investors choose to roll over these funds directly into the next investment cycle.”
(1) For "reinvestment" models involving fund recovery, the investment amount should be calculated cumulatively.
Article 5, Paragraph 2 of the "Opinions on Several Issues Concerning the Handling of Criminal Cases Involving Illegal Fundraising," jointly issued by the Supreme People's Court, the Supreme People's Procuratorate, and the Ministry of Public Security, stipulates: "The amount reinvested by participants after recovering their principal or receiving returns shall not be deducted; however, it may be considered酌情 (酌情 means "at the court's discretion") during sentencing." According to this provision, if fund-raising participants "reinvest" after retrieving their principal or interest, such amounts should be cumulatively included in the total amount involved in the illegal fundraising crime.
(2) For "reinvestment" involving unrecovered funds, the investment amount should not be calculated cumulatively.
How the amount of funds involved in a crime should be determined when investors, instead of recovering their money at maturity, choose to "reinvest," remains unclear under current judicial interpretations or related guidelines, leading to significant debate in judicial practice over whether these "reinvestment" funds should be included in the total criminal amount. In my view, since the "reinvestment" funds have been under the control of the perpetrator from the moment the initial investment was made—without attracting any new capital—the overall scale of illegal fundraising has not changed, nor has it caused fresh harm to the financial regulatory order. Therefore, the investment amounts associated with "reinvestment" should not be cumulatively counted toward the total criminal amount of the non-absorption offense.
III. Regarding the Deduction of Criminal Amounts
1. The investment amounts of myself and my immediate family members should be deducted from the total amount of criminal proceeds.
Article 11 of the "Minutes of the Symposium on Issues Concerning the Handling of Internet Finance Crime Cases" issued by the Supreme People's Procuratorate stipulates: "The amount of public deposits illegally absorbed by a suspect who is responsible for or engaged in fundraising activities shall be determined based on the total amount they actually participated in absorbing. However, the following amounts should not be included in the suspect's total absorption amount: (1) Funds invested by the suspect themselves and their immediate family members." According to this provision, the investment amounts made by the suspect and their close relatives must be deducted from the overall criminal amount. Generally, "immediate family members" are limited to spouses, parents, children, and siblings. As for investments made by other relatives and friends, these should be counted together with funds absorbed from unspecified individuals when calculating the total criminal amount.
2. The amount involved in "nominal transactions" that were neither actually participated in for absorption nor resulted in any benefits received should be deducted from the overall amount of the crime.
“Hanging orders” refers to the practice where non-joining team members, off-staff sales representatives, and others—driven by reasons such as meeting performance targets or earning commissions—place their clients’ investments under the names of other sales agents.
Article 11 of the "Minutes of the Symposium on Issues Concerning the Handling of Internet Finance Crime Cases" issued by the Supreme People's Procuratorate stipulates: "The amount of public deposits illegally absorbed by a criminal suspect who is responsible for or engaged in fundraising activities shall be determined based on the total amount they actually participated in absorbing. However, the following amounts should not be included in the suspect's total absorption figure: (2) Funds recorded under the suspect's name but in which the suspect did not actually participate in the absorption process and did not receive any form of benefit." According to this provision, the key to determining whether the "placed-order" amount can be deducted lies in whether the individual actually participated in the absorption process and reaped any benefits. If the person did not take part in the actual absorption nor received any gains, such funds should be excluded from the total crime amount. However, in judicial practice, some courts have held that, in "placed-order" transactions, regardless of whether the person receiving the order subsequently transfers the benefits to the original placer, the recipient still played a supportive role in facilitating the transaction. Therefore, the court ruled that the investment amount associated with the "placed-order" should also be counted toward the overall crime figure. The author strongly disagrees with this approach, arguing that the court's reasoning fails to adequately consider the critical factor of "whether or not benefits were received." In essence, a "placed-order" arrangement merely involves assigning performance metrics to the recipient without requiring their active involvement in the initial investment absorption process—or any subsequent receipt of benefits. Thus, the "placed-order" amount should not be included in the calculation of the crime's total value.
3. The amount returned to investors before the incident cannot be deducted from the total amount of the crime, but it can be subtracted from the total loss.
Due to the time interval between the exposure of non-Ponzi scheme cases and the actual incident, there are instances in practice where perpetrators use their own funds to compensate investors for their losses. However, regarding funds returned before the case was reported, since the criminal act of the non-Ponzi scheme had already been completed, these funds cannot be directly deducted from the total amount of the crime. Instead, they may be subtracted from the total losses suffered by the investors.
Legal issues demand expertise. Calculating the amount involved in non-contractual criminal activities is by no means a simple matter of addition or subtraction—its professional complexity, intricate nature, and the ongoing controversies surrounding judicial interpretations all ensure that this issue far exceeds the scope of what can be fully explored or resolved in this article. Moreover, determining the nature of investment contracts, assessing the character of funds, addressing cases of repeated investments, and scrutinizing audit reports require careful, case-specific analysis based on both the facts at hand and the evidence presented. Therefore, when confronted with specific challenges in calculating the amount involved in non-contractual criminal activities, seeking professional legal assistance is undoubtedly the wisest course of action.
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