Abstract

"Pension fraud" is a kind of illegal and criminal act that has emerged in recent years, specifically targeting the elderly. This article focuses on the social background of frequent fraud targeting the elderly and explores the application of the crime of false advertising in crimes related to fraud targeting the elderly. By analyzing the differences between the crime of fraud and the crime of false advertising, combined with successful defense cases, the determination ideas of the crime of false advertising are explored.

(1) Overview of "Pension Fraud

Pension fraud crime refers to "the general term for all kinds of criminal activities that infringe upon the property rights and interests of the elderly under the guise of providing 'pension services', investing in' pension projects', selling 'pension products', etc., including fraud, fundraising fraud, illegal absorption of public deposits, organizing and leading pyramid schemes, contract fraud, production and sale of substandard products, and production, sale and supply of counterfeit and inferior drugs."

"Pension fraud" refers to a type of crime targeting the elderly, and it is not a statutory charge stipulated by the Criminal Law. The "Typical Cases of Combating and Rectifying Pension Fraud Crimes" released by the Supreme People's Procuratorate shows that "pension fraud crimes in China involve crimes related to pension fraud such as the crime of fundraising fraud, the crime of illegally absorbing public deposits, fraud, the crime of infringing upon citizens' personal information, and false advertising."

(II) Determination of the Crime of False Advertising

The basic concept of the crime of false advertising

At present, the criminal regulations on the crime of false advertising in our country are mainly reflected in the Criminal Law, the Advertising Law and the Regulations on the Administration of Advertising. The crime of false advertising refers to the act of advertisers, advertising operators and advertising publishers violating national regulations by using advertisements to make false publicity about goods or services, and the circumstances are serious.

The crime of false advertising is a newly added charge in the Criminal Law of 1997, aiming to punish false and exaggerated promotional behaviors in advertisements. False advertising is one of the behavioral patterns of many fraudulent crimes, such as pyramid schemes, illegal fundraising, production and sale of substandard goods, and fraud. In cases of fraud targeting the elderly, although there are many cases of false advertising, this kind of behavior is usually a criminal means of other crimes, and a considerable proportion of it has been diverted by various fraudulent crimes. Very few are truly convicted of the crime of false advertising.

The difference between the crime of false advertising and fraud

Fraud crime refers to the act of illegally obtaining a relatively large amount of public or private property by using deceptive methods with the aim of illegal possession. The main manifestations of fraud in pension fraud are: Criminals, through various deceptive means, cause the elderly to continuously develop erroneous perceptions and dispose of their property based on such perceptions (including directly delivering property, promising the perpetrator to obtain property, promising to transfer property benefits, etc.). Eventually, the perpetrator or a third party acquires the property, and the victim purchases products that do not match their own perceptions. Or suffer property losses by investing in false projects that do not match the publicity.

According to Article 19 of the "Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases Involving Food Safety Hazards" (2021) jointly issued by the Supreme People's Court and the Supreme People's Procuratorate: Anyone who, in violation of state regulations, uses advertisements to make false publicity about health food or other food and meets the provisions of Article 222 of the Criminal Law shall be convicted and punished for the crime of false advertising. Those who, with the intent of illegal possession, defraud property by selling health food or other food products and meet the provisions of Article 266 of the Criminal Law shall be convicted and punished for fraud. Where a crime also constitutes the crime of producing or selling substandard products or other crimes, the offender shall be convicted and punished in accordance with the provision carrying the heavier penalty. This interpretation provides a defense idea for distinguishing the crime of fraud from the crime of false advertising. In practice, strict distinctions can be made from both the subjective aspect and the criminal object.

(1) The subjective aspect of the crime

The subjective aspects of both the crime of false advertising and the crime of fraud are manifested as intent. However, due to the different objects they protect, their intentions are also different. The criminal object of the crime of false advertising is the normal advertising order. Therefore, in the crime of false advertising, its criminal intent is manifested as the intention to make profits through false advertising promotion. The criminal object of fraud is the ownership of property, so its criminal intent is manifested as the intention to illegally possess others' property.

In specific actual cases, the type of intent of the offender can be determined by combining their specific actions. In the context of pension fraud, the specific manifestations of fraud crimes are usually: Criminals register companies with the aim of fraud and engage in criminal activities. They attract the attention of the elderly by giving them gifts, holding health lectures, and communicating with them to gain their trust. Eventually, they sell counterfeit, shoddy or products with prices that are highly disproportionate to their actual quality, causing the victims to hand over their belongings based on a wrong understanding and absences or squander them. At this point, the subjective intention of the criminal is manifested as the subjective intention of illegally possessing others' property.

Compared with the crime of fraud, in the crime of false advertising, the criminal's act of using false advertisements for promotion aims to increase sales and gain more profits through false advertising, without the intention of illegally appropriating public or private property. When it comes to specific behaviors, compared with the implementation of fraud crimes, the business entities involved in the crime of false advertising are often legal entities with complete licenses and sales qualifications. They attract consumers to voluntarily consume through reasonable publicity methods, and the products they produce are also qualified products with complete licenses, processing and inspection. The illegality of its behavior lies in exaggerating the facts and conducting propaganda activities that are inconsistent with the objective situation, but not completely divorced from the actual situation. As its products are qualified, consumers can learn in detail about the ingredients, nature and functions of the involved products through the outer packaging, labels, product instructions or other channels of the products. The false advertising behavior of the criminal subject will not cause consumers to lose their independent thinking and completely fall into a wrong understanding. Moreover, after conducting post-event behavior analysis, the criminal subject of the crime of false advertising has not engaged in acts such as fleeing or squanding property as defined in the "Minutes of the National Court Conference on the Trial of Financial Crime Cases" as "illegal possession" in the crime of fraud. There are even services such as returns and refunds, as well as after-sales follow-up visits. This can also distinguish the differences in the subjective intentions of the criminals in the crime of fraud and the crime of false advertising.

(2) Distinction of criminal objects

In terms of the criminal object, the criminal object of fraud is the ownership of property, while that of false advertising is the management order of advertising, the market competition order and the legitimate rights and interests of consumers. Specifically in the context of pension fraud, the promotional outcome of the crime of false advertising is to cause misunderstandings among the elderly through exaggeration and false advertising, making them believe the promotional content to be true and purchase products whose prices do not match their quality. This infringes upon the order of advertising management and market competition as well as the legitimate rights and interests of consumers. The delivery of property by the victims is merely the result of the implementation of such criminal acts. It is not the criminal object protected by this crime.

To sum up, in the context of pension fraud, the manifestation of the crime of false advertising is to promote pension products through advertisements, while the manifestation of fraud is to defraud property by selling health products. Among them, advertising and promotion are only one part of the fraud methods. The subjective purpose of the criminal should be comprehensively determined by taking into account the nature of the criminal group, product quality, promotional behavior and post-event behavior, etc., so as to infer the criminal object and distinguish the difference between the crime of false advertising and the crime of fraud.

(3) Sharing of self-organized cases

A search on the Judgments Online reveals that there are very few cases of the crime of false advertising. Most of these cases are held criminally responsible for fraud, and the principal offender is often sentenced to more than ten years in prison. However, if it can be identified as the crime of false advertising, the maximum statutory penalty is two years in prison. The prison terms of the two are vastly different.

The two cases involving the sale of health products suspected of fraud handled by the author have both been successfully defended as false advertising.

One of them is the case of "bovine colostrum powder" : The defendant set up a Beidahuang Green Food store, selected some elderly people, and attracted them to the store by giving away rice and other means. Later, through tricks such as enrolling members, false advertising, and free Tours, he used special scripts in each trick link to attract the elderly to attend classes in the store. He also promoted the sale of colostrum powder in the store through PPTS and played false food advertisements. They have the elderly come to the stage to promote a series of tricks such as the effects of consumption, falsely claiming that the colostrum powder they sell has health benefits such as lowering blood pressure and uric acid, and inducing the elderly to purchase it at a high price. This case was filed and arrested for fraud. After being transferred for review and prosecution, it was changed to false advertising and released on bail. My client actively cooperated and withdrew the illegal gains, and was eventually given a suspended sentence.

Another case is the "Light Nourishing Energy Mattress" case: The defendant set up sales stores, targeting the middle-aged and elderly group. Through forms such as in-store lectures, travel dinners, organizing sales meetings, and having old customers share their experiences, the company's marketing and other electric mattresses were packaged as "Light Nourishing Energy mattresses", and they were promoted to have the effects of improving and treating various diseases in the middle-aged and elderly, inducing middle-aged and elderly consumers to purchase them at high prices. A special task force was established to file a case for fraud and approve the arrest. After being transferred for review and prosecution, it was changed to the crime of false advertising. My client was eventually sentenced to ten months in prison.

Conclusion

This article combines the specific behavioral logic and characteristics of the crime of false advertising in pension fraud, distinguishes the differences between the crime of fraud and the crime of false advertising, and sorts out practical cases, with the aim of combining theory and practice to seek more effective defense ideas and make continuous progress.