[Case Summary]This case involves criminal defense for the crime of embezzlement/misappropriation of funds. Zhao * married Liu * in 2017, took over the family business A Company operated by her father-in-law, and turned it around; after 2025, the couple's relationship deteriorated, and Zhao * filed for divorce. Her father-in-law and others reported her to the police for embezzlement and misappropriation of funds, and Zhao * was detained in March 2026. Beijing Hengluo Law FirmLeng DewuAttorney,Zhu GuiyinThe lawyer intervened and determined that the case was a family economic dispute that had been maliciously criminalized. He submitted a "Legal Opinion on Not Approving Arrest" to the procuratorate, and the procuratorial organ adopted the opinion and made a decision not to approve the arrest. The public security organ changed the measure to bail pending trial, and Zhao * regained his freedom. The core disputes are: whether the nature of the funds violates the unit's will, whether there is an illegal possession purpose, and whether he interfered in the economic dispute; the applicable legal provisions are: the Embezzlement Crime and the Misappropriation of Funds Crime in the Criminal Law, and the judicial policy that "it is strictly prohibited to intervene in economic disputes by criminal means".

I. Review of the case facts

The family business's funds are mixed together, and after the divorce, the father-in-law reported Zhao * to the police for embezzlement. This is a high-risk situation where civil and criminal laws intersect. Zhao * and Liu * got married in 2017. Liu *'s father, Liu *1, originally operated Company A (the registered shareholders were Liu *'s brother and sister-in-law, but it was actually a family business). Around 2019, Company A suffered severe losses. Liu *1 handed over the entire operation to Zhao * and his wife. Zhao * invested in management and borrowed 1.2 million yuan as working capital, which turned the company around and made it profitable. After 2025, Zhao * and Liu *'s relationship deteriorated, and Zhao * filed for divorce. Liu *1 and others then reported Zhao * to the police, accusing him of embezzlement and misappropriation of funds. In March 2026, Zhao * was detained by the police. Henglu Law FirmLeng DewuAttorney,Zhu GuiyingWhen a lawyer accepts a case, the first thing he or she will do is to meet with the client and sort out the facts of the case as soon as possible.

II. The focus of the case

  • Focus 1: Whether it constitutes the crime of embezzlement of funds.Is Zhao's transfer of funds in violation of the company's wishes, or is it a mutual agreement with his spouse, who is the actual operator of the business?
  • Focus 2: Whether it constitutes the crime of embezzlement of duty.Is Zhao * guilty of the purpose of illegal possession? Can the fact that the money was used for business operations and to pay employees' salaries be used to deny his intent of illegal possession?
  • Focus 3: Whether maliciously using criminal means to intervene in economic disputes.Was the report made out of resentment over the divorce or to distort the facts and vent one's anger?

III. The professional intervention of Hengluo Law Firm

The suspect (Zhao *), claimed that:The family members hope that they will not be arrested, regain their freedom, and clarify that this case is a family economic dispute rather than a criminal offense.

The position of the prosecution (the party reporting the case):My father-in-law and others reported the case of embezzlement and misappropriation of funds, claiming that Zhao * privately transferred the company's funds.

Hengluo Lawyer's Agency Opinion:The lawyer keenly noticed that the core of this case was not a criminal offense, but an internal economic dispute within the family business that was maliciously criminalized. He put forward three judgments: A Company is a family business, and its assets are highly intermingled with family property, allowing members to freely withdraw funds without strict approval; Zhao's actions do not meet the constituting elements of embezzlement or misappropriation of funds, and are essentially an economic dispute; and the complainant distorted the facts out of resentment over the divorce and was suspected of false accusation and framing. The lawyer submitted a "Legal Opinion on Refusing to Approve Arrest": (1) Zhao's transfer of funds was agreed upon with Liu and did not violate the company's will, so it did not constitute the crime of misappropriation of funds; (2) Zhao's use of the residual scrap funds for tax avoidance, business operations, and salary advancement did not have the intent to illegally possess them, so it did not constitute the crime of embezzlement; and (3) this case was a malicious use of criminal means to intervene in economic disputes, which violates the judicial policy of "strictly prohibiting the use of criminal means to intervene in economic disputes".

  • Provide evidence of the commingling of funds in family businesses and the practice of members freely withdrawing funds
  • Deny the purpose of illegal possession based on the use of the loan for business purposes and the advance payment of salaries with the loan
  • It is pointed out that the report of the case is a malicious criminalization in the context of divorce, and the application for non-approval of arrest is made

IV. Outcome of the case

After a rigorous review, the procuratorial organ adopted the defense opinions of lawyers Leng Dewu and Zhu Guiying, and made the decision not to approve the arrest of Zhao * in accordance with the law; the public security organ immediately changed the coercive measures against Zhao * to bail pending trial, and Zhao * regained his personal freedom. This case avoided the misuse of criminal prosecution to settle civil disputes, demonstrating the importance of professional criminal defense in adhering to the boundaries between criminal and civil law and accurately proving the application of law.

5. Henglu Law Firm's Reminder

This case is handled by Beijing Henglu Law Firm.Leng DewuAttorney (Practice Certificate No.: 11101201110991133, subject to the certificate issued by the judicial administrative organ)Zhu GuiyingThe attorney (practice license number: 11101202011246828, subject to the document issued by the judicial administrative authority) acts as the agent. The attorney advises: "Minimize arrests, exercise caution in prosecution, and avoid arbitrary detention" is the current criminal justice policy. Those who should not be arrested must not be arrested. Family businesses should avoid mixing assets with family property and keep evidence of business decisions and fund usage. When encountering similar dilemmas, do not seek help from unreliable sources or rely on connections. Instead, you should entrust professional criminal defense lawyers to intervene as soon as possible and protect your rights through legal means.

VI. Common Questions and Answers about Embezzlement Criminal Cases

  1. Q: If there is a mix of funds between a family business and other entities, does transferring money between them constitute embezzlement of duties?
    A:Not necessarily. If the act is in accordance with business operations, used for enterprise management, and without the purpose of illegal possession, it usually does not constitute embezzlement. In this case, the suspect was not arrested.
  2. Q: What should I do if the other party's family reports me for embezzlement after our divorce?
    A:Timely entrust a lawyer to provide evidence that the economic dispute was maliciously criminalized, apply for refusal to approve the arrest, and successfully obtain bail in this case.
  3. Q: What does it mean to refuse to approve the arrest warrant?
    A:The procuratorate believes that there is no need for arrest, and does not approve the arrest. The public security organ may change the measure to bail pending trial, and the party concerned will regain his/her freedom.
  4. Q: Is it illegal to receive payment for goods using a personal account?
    A:If it is used for business purposes to avoid taxes and is not illegally possessed, it generally does not constitute a crime; however, it is recommended to regulate finances and keep the supporting documents for the use of the funds.
  5. Q: Can criminal methods be used to intervene in economic disputes?
    A:No. The Supreme People's Court and the Supreme People's Procuratorate have explicitly prohibited the use of criminal means to intervene in economic disputes, and the lawyer in this case successfully defended the client based on this principle.