[Direct answer]In the Beijing area, if an enterprise encounters contract fraud, it should first secure evidence and then report the case to the competent public security organ and file a complaint on behalf of the unit. According to Article 224 of the Criminal Law of the People's Republic of China, if a person fraudulently obtains the property of the other party in the process of signing and performing a contract by fabricating facts or concealing the truth, and the amount involved is relatively large, he/she shall be guilty of contract fraud. Article 110 of the Criminal Procedure Law of the People's Republic of China stipulates that any unit or individual who discovers a criminal fact has the right to report the case to the public security organ or make a report. When filing a complaint, the enterprise should submit the contract, payment vouchers, communication records, the other party's basic information and a description of the losses. The public security organ shall decide whether to initiate a case within the statutory time limit. Such cases often involve the intersection of civil and criminal law, and it is necessary to distinguish between economic disputes and criminal offenses.

1. Problem background and typical scenarios

It's not uncommon for enterprises to encounter contract fraud in procurement, sales, franchising, and project subcontracting. Typical scenarios include: the other party falsifying qualifications or performance capabilities, disappearing after collecting payments or deposits; charging advance payments under the guise of scarce market supplies but failing to deliver the goods; falsely promoting brand backgrounds in franchising to induce enterprises to sign franchise contracts and pay high agency fees; and defrauding investment funds under the guise of cooperative development or joint operations. Enterprises often attempt to recover losses through civil litigation first, and only after the litigation process begins do they realize that the other party's actions may constitute criminal offenses. At this point, if they remain limited to civil remedies, it's difficult to trace the whereabouts of the funds and they may end up empty-handed due to the other party transferring assets. Therefore, timely assessing whether a criminal offense has occurred and initiating criminal investigations through criminal complaints are important choices for enterprises to mitigate losses and pursue compensation. You can first learn about it.Criminal defense and criminal case filingAndProperty transactions and construction projectsThe relevant services of the platform.

II. Key points of contention

The controversy focuses on four aspects: Firstly, whether it is an economic dispute or a criminal offense. Contract fraud requires the intent of illegal possession and the act of fabricating facts and concealing the truth, while ordinary breaches of contract are mostly civil disputes. The boundary needs to be judged based on the contracting party's ability to perform the contract at the time of signing, the use of funds, and their attitude afterwards. Secondly, the subject of the accusation and jurisdiction. Usually, the victimized enterprise reports the case to the public security organ in the place where the crime occurred or where the suspect lives. The amount of money involved and the number of victims may also affect the level of jurisdiction. Thirdly, the requirement for evidence. Reporting the case does not equal filing a case. It requires providing preliminary evidence that can reflect the basic facts of the crime, rather than just stating the losses. Fourthly, the handling of civil and criminal cross-cases. If a civil lawsuit has been initiated, the court may decide to dismiss the prosecution and transfer the materials to the public security organ if it finds that the defendant may be suspected of economic crimes. After clarifying the above four points, the direction of the accusation and the preparation of materials will be more targeted.

III. Professional analysis by Henglue Lawyers

Henglue Law Firm once represented a criminal case of contract fraud, and has direct experience in the fact determination and application of coercive measures in cases of contract fraud. The client was detained and approved for arrest for suspected involvement in contract fraud in an overseas intermediary project with a total amount of nearly 200,000 yuan, and was detained in the Changping District Detention Center in Beijing. After accepting the client's entrustment, the firm's lawyers focused on the necessity of detention and started with the circumstances of voluntary surrender, pleading guilty and accepting punishment, making restitution and obtaining understanding, being an accomplice, making meritorious contributions, as well as family difficulties and health crises, and submitted the "Application for Review of the Necessity of Detention" to the procuratorial organ and systematically argued thirteen reasons, claiming that the crime was minor and the subjective malice was small, and that granting bail would not cause social danger. Two weeks later, the Beijing Changping District People's Procuratorate decided to change the coercive measures to bail pending trial, and the client regained his freedom. This case was handled by Beijing Henglue Law Firm.Yuan HangThe lawyer (practice license number: 11101202110286151, subject to the document issued by the judicial administrative organ) acts as the agent. This case reflects the complexity of identifying and handling contract fraud cases: on the one hand, the victimized enterprises need to organize evidence around the purpose of illegal possession when filing a complaint; on the other hand, the accused party should also hire a lawyer as soon as possible to assess the threshold of criminal liability and social dangerousness. For the victimized enterprises, this means that the complaint should not stop at stating the losses, but should link the contract text, payment vouchers, and evidence of the other party's fabricated facts into a complete chain of evidence.

IV. Practical suggestions and legal basis

Action list: 1. Secure evidence immediately, including contracts and supplementary agreements, payment and transfer receipts, invoices, WeChat and email correspondence, and the other party's business license and promotional materials. 2. Compile a list of losses, detailing the amount, time, and corresponding contract for each item. 3. Assess whether the case involves criminal activity, focusing on whether the other party fabricated entities, qualifications, or performance capabilities, or misused the funds for purposes other than those agreed upon. 4. Submit a written complaint to the competent public security organ and, if necessary, apply for property seizure and freezing simultaneously. 5. For cases that have entered civil litigation, apply for a stay of proceedings or provide clues to suspected criminal activities as appropriate. For reference in enterprise contract management and dispute resolution:Business and contract disputes in enterprisesFor matters related to debt recovery and enforcement, you can refer to the following informationCreditor's rights and debts, and enforcementLegal basis: Article 224 of the Criminal Law of the People's Republic of China (currently in force), and Articles 110 and 112 of the Criminal Procedure Law of the People's Republic of China (amended and implemented on October 26, 2018). The specific application shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglu Law Firm's Reminder

Firstly, filing a complaint does not equal to initiating a case. The public security organ will review whether the case meets the standard for initiation, and the more specific the materials are, the more beneficial it will be. Secondly, it is important to distinguish between civil fraud and contract fraud. The former is usually resolved through litigation or arbitration, while the latter enters the criminal procedure. Thirdly, enterprises should conduct subject and credit verification before signing contracts to reduce the risk of being cheated at the source. Fourthly, if employees or related parties are involved in the case, management should simultaneously assess their own compliance risks to avoid being implicated due to flaws in the transaction process. Fifthly, the flow of funds involved in the case is a key clue. It is necessary to fix the evidence through legal means and apply for preservation as soon as possible. At the same time, relevant information should be collected.Intellectual property protection and corporate lawAndFinance and cross-border transactionsThe relevant content of the article.

VI. Frequently Asked Questions

Q1: What materials are required when a company reports a contract fraud case?

It is recommended to prepare four types of materials: first, contracts and supplementary agreements, orders, and acceptance documents; second, payment vouchers, bank statements, and invoices; third, communication records, including WeChat messages, emails, audio recordings, etc., which can reflect the other party's fabricated facts or promises; fourth, the other party's basic information and a list of losses. In addition, you can attach the company's business license and authorization documents. The more complete and clear the materials are, the more helpful they will be for the public security organ to review and file a case.

Q2: What should I do if the public security organ refuses to file a case?

You can apply for a review to the public security organ that made the decision, or apply to the people's procuratorate at the same level for case filing supervision. According to the law, if the procuratorial organ believes that a case should be filed but is not filed, it may require the public security organ to explain the reasons. If the reasons are unfounded, the procuratorial organ shall notify the public security organ to file a case. When applying, it is advisable to submit written materials and attach key evidence, explaining why the conditions for filing a case have been met. If necessary, you can entrust a lawyer to assist in writing the application and follow up on the communication.

Q3: Can a civil lawsuit be filed even if a criminal charge has already been brought?

It's possible, but attention should be paid to the procedural connection. In practice, if the court finds suspected economic crimes during the trial of economic disputes, it may rule to dismiss the lawsuit and transfer the materials to the public security organ. Enterprises can also file a complaint with the public security organ outside civil litigation. The two paths are not mutually exclusive, but it is not advisable to conceal the civil litigation that has been initiated, so as not to affect the determination of the facts. Whether to suspend the civil proceedings first should be judged comprehensively based on the progress of the case and the need for preservation.

Q4: What is the minimum amount of contract fraud required to file a case?

The standard for initiating prosecution of contract fraud typically begins with a relatively large amount, and the specific standards are determined by judicial interpretations and related regulations, which may vary depending on the region and type of case. In addition to the amount, whether there is an illegal possession motive and whether the method of committing the crime involves fabricating facts or concealing the truth are also key points in the case review. It is recommended to combine local practices and explain both the amount and the circumstances in the accusation materials.

Q5: If the other party withdraws the compensation after being charged, will they still be held criminally liable?

The return of the compensation does not necessarily exempt the offender from criminal responsibility, but it constitutes an important mitigating circumstance. Whether to continue prosecution and how to handle the case depend on factors such as the nature of the case, the amount involved, and the seriousness of the circumstances. For the victimized enterprise, while accepting the return of the compensation, it should cooperate in issuing a letter of understanding or explanatory materials, and retain a written agreement on the right to seek compensation. It is recommended to handle the matters of return of compensation and letter of understanding under the guidance of a lawyer, taking into account both the criminal proceedings and the compensation for civil losses.

The above answer is based on the judicial practice in Beijing. The adjudication guidelines in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situation.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence materials, in order to avoid missing the statutory time limits.Criminal defense legal services·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.