[Direct answer]Corporate employees who take advantage of their positions to illegally appropriate the company's assets on a large scale constitute the crime of embezzlement, and shall be held accountable in accordance with Article 271 of the Criminal Law of the People's Republic of China. In practice, the threshold for prosecution is generally set at more than 60,000 yuan. The prosecution process is as follows: first, through internal audits and account verification, fix the flow of funds and the methods of embezzlement; preserve financial vouchers, contracts, and electronic data; then draft a criminal complaint and file it with the public security organ at the crime scene or the suspect's residence; the public security organ shall review it in accordance with Article 112 of the Criminal Procedure Law of the People's Republic of China, and if it considers that there are criminal facts requiring criminal responsibility, it shall initiate a case. It is recommended to first fix the evidence and then take personnel actions such as dismissal. Criminal accountability can proceed in parallel with civil compensation. For more details, please refer to the following document:Criminal defense and legal services for criminal case filingAndBeijing Henglu Law Firm.

I. Problem background and typical scenarios

Embezzlement often occurs in the areas of capital flow, procurement, and sales: sales representatives embezzle customer payments and then disappear; financial staff fabricate expenses and submit duplicate reimbursement claims to misappropriate funds; executives transfer the company's business to affiliated companies they control; and procurement staff accept kickbacks and inflate purchase prices, which may also involve bribery of non-state employees. Many companies discover the losses have persisted for months or even years. What's more frustrating is that they don't know whether to pursue civil litigation, labor arbitration, or criminal charges. They worry that if they report the case to the police, "the police will just treat it as an economic dispute," or that dismissing employees first may lead to their disappearance and the loss of evidence. Choosing the right path and following the correct order directly affects whether losses can be recovered and the effectiveness of accountability. It also tests the company's understanding of the standards for initiating criminal prosecution.

II. Key points of contention

  • The debate over the nature of the case: Whether the employee's possession of the funds constitutes unauthorized possession, a labor dispute, or embezzlement depends on whether the employee exploited his position for personal gain and whether the purpose of the possession was illegal. The nature of the case directly determines whether the case should be handled under civil or criminal law.
  • Amount threshold: It's difficult to initiate a criminal case when the amount does not meet the prosecution standards. It's necessary to calculate the total amount of multiple and repeated embezzlements and fix them one by one, and if necessary, to combine other charges to prosecute them comprehensively.
  • The evidence within the company: having the books, vouchers, and electronic data in their own hands is a double-edged sword. The fixation process must be legal and standardized to avoid evidence defects that may affect the validity of the evidence.
  • The order of disposal: Whether to dismiss the employee first or report the case to the police first involves a trade-off between alerting the suspect and exacerbating the losses, which needs to be decided based on the progress of evidence collection.

III. Professional analysis by Henglue Lawyers

The experience of Henglu Law Firm in handling criminal complaint cases shows that whether a case can be filed depends on the evidence chain and the quality of the argumentation. In a case of serial fraud and extortion, Wang * was defrauded and extorted of more than 3.1 million yuan by Li * under the guise of transfer fees, deposits, and settlement fees. The lawyer sorted through massive transfer records and chat logs, drafted the "Criminal Complaint Letter" and "Evidence List", and accompanied the client to report the case. The public security organ accepted the case on the same day and officially launched an investigation within three weeks. In a case involving financial products, Wang * invested more than 500,000 yuan in a non-licensed financial project, while the involved company raised funds from unspecified members of the public exceeding 190 million yuan. The lawyer collected four categories of evidence, including contracts, transaction records, and company information, to demonstrate the constitutive features of the crime of illegally absorbing public deposits, prompting the public security organ to file a case and order the repayment of illegal proceeds. This method of "turning fragmented evidence into a chain, aligning legal documents with legal elements, and accompanying the client to explain in person" also applies to corporate complaints of embezzlement. By organizing the job responsibilities and approval authorities around "using one's position for personal gain", fixing the flow of funds around "illegally appropriating for oneself", and proving the ownership of funds around "the company's assets", each embezzled amount, time, and method can be traced to specific evidence, enabling the investigating authority to quickly determine the existence of criminal facts and the need to pursue criminal responsibility.

IV. Practical suggestions and legal basis

At the legal basis level: Article 271 of the Criminal Law of the People's Republic of China stipulates the crime of embezzlement of duty; Article 272 stipulates the crime of misappropriation of funds. Employees who misappropriate funds from their own units for personal use or lend them to others beyond the legal time limit can be held accountable according to this; Article 163 stipulates the crime of bribery of non-state employees. If the amount of kickbacks received in the procurement and business process is large, it can be prosecuted together; Articles 110 and 112 of the Criminal Procedure Law of the People's Republic of China stipulate the right to complaint and the procedures for case filing and review. At the practical advice level: After discovering clues, first conduct an internal audit to seal relevant account books and vouchers, and make a mirror backup of electronic data; When interviewing the parties involved, keep records and pay attention to the legality of the interview methods; Prepare the complaint materials including the business license and authorization documents, the complaint letter, the evidence list, and the identity clues of the accused; If it involves negotiation for repayment, first clarify the nature of the funds and then collect the money. Daily prevention can be combined with the construction of internal control and compliance in the enterprise, and reference can be made to relevant provisions.Intellectual property protection and corporate legal services.

5. Henglue Law Firm's Advice

The accountability window for embezzlement and the preservation of evidence exist simultaneously: accounts may be adjusted, data may be overwritten, and employees may resign. Delaying action will only make it increasingly difficult to provide evidence. The proper order for enterprises to file charges is to first secure evidence, then evaluate the nature of the offense, and finally take personnel actions. For cases whose nature lies between civil and criminal, submitting a legal opinion issued by a lawyer along with the complaint materials can significantly improve the efficiency of case acceptance and filing. In addition to accountability, it is also necessary to simultaneously address loopholes in fund approval, account reconciliation, and post-check and balances to prevent similar risks from recurring. If your enterprise is currently facing similar issues, you can seek assistance throughLegal services for corporate commercial and contract disputesGain relevant experience. The aforementioned prosecution case was handled by Beijing Henglu Law Firm.Yuan HangThe attorney (practice license number: 11101202110286151, subject to the document issued by the judicial administrative organ) acts as the agent.

Q1: What is the quantitative standard for the crime of embezzlement?

According to Article 271 of the Criminal Law of the People's Republic of China, if an employee of a company, enterprise, or other unit illegally appropriates the unit's property by taking advantage of his position and the amount involved is relatively large, he shall be guilty of the crime of embezzlement of duty. According to the standards established by relevant judicial interpretations, the amount standard for the crime of embezzlement of duty shall be implemented in accordance with the multiples of the corresponding amount standard for the crime of graft and bribery. In practice, "a relatively large amount" is generally set at more than 60,000 yuan, and "a huge amount" is generally set at more than 1 million yuan. There may be differences in the implementation standards in different regions. The specific amount determination should also be combined with the methods of embezzlement, the number of times, the duration, and the situation of returning the embezzled money for comprehensive judgment. The focus of evidence fixation is on the flow of funds rather than a single large-scale expenditure.

Q2: If an employee is found guilty of embezzlement, should the company dismiss them first or report the case to the police first?

It is recommended to first secure evidence and evaluate the criminal path before deciding on the pace of personnel handling. Immediately dismissing an employee may help contain the damage, but it may also tip off the employee: after leaving the company, the employee may refuse to cooperate, delete electronic data, or even destroy the original vouchers in their possession, making it more difficult to investigate and collect evidence. A more prudent approach is to first complete an internal audit and preserve evidence. If necessary, stabilize the employee by communicating with them and conducting reconciliations, and simultaneously consult lawyers to prepare prosecution materials. Once the evidence is secured, initiate dismissal and report the case to the police. If the employee is transferring assets or showing signs of fleeing, report the case to the police immediately and apply for seizure and freezing measures in accordance with the law to prevent losses from escalating.

Q3: What materials should be prepared when filing a complaint of embezzlement to the public security organ?

The core materials include: the company's business license and power of attorney documents; criminal complaints, stating the accused's employment status, embezzlement methods, amounts involved, and timeframes; evidence lists and materials, such as labor contracts and job responsibilities documents, financial ledgers, bank statements, reimbursement vouchers, audit reports, inventory and asset inventory records, relevant chat records and emails; and clues to the accused's identity information. The materials should form a closed loop of "position advantages - embezzlement behavior - property belonging to the company - amounts involved", allowing the investigating authorities to intuitively determine the existence of the criminal facts. When necessary, the lawyer should accompany the complainant to submit the evidence and explain the evidence's relevance in person, thereby improving the efficiency of case acceptance and filing.

Q4: The public security organ said this is an economic dispute and won't accept the case. What should I do?

First, please ask the case-handling organ to issue a written opinion and understand the specific reasons for non-acceptance, and then strengthen the evidence accordingly: If it is a qualification dispute, focus on the "using one's position for personal gain" and "illegally appropriating for oneself" by supplementing the evidence of job responsibilities, approval authority, and fund flow, highlighting the differences from ordinary debts and labor disputes; if there is insufficient evidence, supplement the audit report, inventory records, and electronic data. After strengthening the evidence, you can file a complaint again or submit the case to another public security organ with jurisdiction; if it is clearly not accepted for filing, you can apply for a review in accordance with Article 112 of the Criminal Procedure Law of the People's Republic of China and apply to the people's procuratorate for supervision of case filing. For cases with complex qualifications, it is recommended that a lawyer issue a legal opinion and submit it together with the materials.

Q5: If the employee returns the money, can the company still hold them accountable?

Yes. Returning the embezzled funds and making restitution are sentencing factors, not conditions for exemption from criminal prosecution. If the company accepts the restitution on the premise of embezzlement, it will not affect the criminal prosecution; whether to prosecute and when to prosecute will be decided by the company and the investigating authorities in accordance with the law, and employees cannot use "having already repaid the money" to resist prosecution. In practice, companies can choose their own paths based on their own interests: either requiring restitution and obtaining an understanding after that, or claiming restitution to mitigate losses while prosecuting for criminal responsibility. Regardless of the choice, it is recommended to keep the restitution agreement, receipt of payment, and conversation records, clarify the nature of the funds and the parties' handling intentions, and avoid subsequent reneging that may lead to new disputes.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence, so as to avoid missing the statutory time limit.Criminal defense legal services·Attorney Yuan Hang·Beijing Henglu Law Firm