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in a case of reinstatement of execution, guangxi lawyer duan hua signed a risk agency contract with the entrusted enterprise and obtained the company's pending debt for 300,000 yuan. after the successful execution, a total of more than 6 million yuan in execution funds were received. in addition to the 300,000 yuan that belonged to the entrusted enterprise, duan hua directly made a profit of more than 5 million yuan. six years later, duan hua was reported. in august 2024, the gongcheng county court of guilin city ruled in the first instance that duan hua was guilty of fraud.

the first instance judgment held that in the above-mentioned enforcement case, duan hua, as the agent of the enterprise applying for enforcement, concealed the truth from the entrusting enterprise even though he knew that the enforcement was very likely to succeed, causing the enterprise to have a wrong understanding of whether the enforcement could be successful, and thus transferred the debt involved to him and signed a risk agency agreement. after the case was executed, duan hua bribed the judge with another 30,000 yuan in cash.

the court of first instance found that duan hua's behavior constituted the crime of fraud and bribery, and sentenced him to 11 years and 2 months in prison for both crimes. duan hua was dissatisfied with the verdict and appealed.

duan hua and his defense lawyer said that the reason why the company entrusted the lawyer to sign a risk agency contract and transfer the debt to the lawyer was because the company was in financial difficulties and had more than 3 million yuan of debts waiting to be executed. when the company was unable to pay the lawyer's fees at the time, the debt transfer was a choice made by the company and duan hua after consultation to ensure their respective interests.

when analyzing the defense's views, the first instance court held that duan hua failed to explain to the enterprise the key evidence and the opinion that increased the possibility of winning the case, causing the other party to mistakenly believe that the case was difficult to execute and make the wrong decision to transfer the debt, which was therefore a fraud.

lawyers earn millions from "risk agency"

duan hua, a 58-year-old lawyer who was once the director of the criminal professional committee of the guilin lawyers association, was charged with fraud for his "risk agency" in the case of resuming execution of a contract dispute of guangxi guilin guilian bus industry co., ltd. (hereinafter referred to as "guilian company").

case materials show that in 2001, guilian company sued lijiang fengqing travel agency (hereinafter referred to as "lijiang fengqing travel") for a contract dispute over installment sales. after mediation by the people's court of yanshan district, guilin city, lijiang fengqing travel agreed to pay guilian company 1.266 million yuan for the purchase of the car and compensate for economic losses of 176,1597 yuan. the company's legal representative zhao jun assumed joint and several liability for the debt.

after the yanshan district court executed 148,000 yuan, the property of lijiang fengqing travel was auctioned off by the local court in lijiang, yunnan to repay the debt, and the business license was revoked. zhao jun's whereabouts were unknown after he was wanted by the public security department for suspected fraud, and there was no executable property under his name. on march 27, 2005, the yanshan district court ruled that the execution procedure was terminated.

in 2013, the case took a turn for the better. ma junjie, former deputy manager of lijiang fengqing travel, reported to the relevant authorities that zhao jun fled to xinjiang under the alias "yang zhiming" and married and had children. he died of illness two years ago, and his estate was inherited by his wife and children.

duan hua accepted guilian company's commission and went to xinjiang with chen wen, another legal advisor of the company, to investigate and verify the contents of the report. after investigation, the two believed that the contents of ma junjie's report were true. guilian company immediately applied to yanshan district court for resumption of execution.

on june 27, 2014, the yanshan district court filed a case for enforcement of the sales contract dispute between guilian company and lijiang fengqing travel. later, duan hua, chen wen and yanshan court executive judge liu jun went to xinjiang, yunnan and other places to investigate, and conducted an appraisal of the handwriting and portrait of "yang zhiming". at the same time, they froze the equity and real estate under the name of "yang zhiming" and his wife.

the first-instance judgment stated that after obtaining the appraisal opinion, duan hua did not inform guilian company. not only did he conceal the fact that "zhao jun" and "yang zhiming" were the same person and that the case could be executed smoothly at the meeting organized by the guilin state-owned assets management committee, but he also proposed at the meeting to purchase the debt in the case through risk agency for 300,000 yuan.

the risk agency contract signed by both parties shows that duan hua will bear the risk of the fees paid during the execution of the case. after the execution is closed, 300,000 yuan of the execution funds will go to guilian company, and the rest will be used as duan hua's risk agency fees. in order to protect the rights and interests of both parties, the two parties signed the "debt transfer agreement", stipulating that guilian company will transfer the execution debt to duan hua for 300,000 yuan.

the verdict shows that in july and september 2016, feng meiying, the wife of "yang zhiming", paid 62.13309 million yuan in execution fees (including years of interest, etc.) to the yanshan district court in two installments. since duan hua had obtained the debt from guilian company, he took the money from the yanshan district court in the name of the creditor.

after receiving the execution money, duan hua paid 300,000 yuan to the designated account of guilian company, and paid 100,000 yuan each to chen wen, ma junjie and huang haifeng, a shareholder of "yang zhiming's" company in turpan, and kept the rest of the money for himself.

according to the verdict, duan hua received more than 5 million yuan in risk agency returns, becoming the biggest winner in the case. the enforcement case has come to an end.

judge's violation of discipline leads to "case within a case"

many years later, duan hua was accused of fraud for representing the above-mentioned enforcement case.

the verdict shows that in 2022, the yanshan district supervisory committee discovered that duan hua was suspected of bribing state officials during the investigation. during the investigation, it collected evidence that duan hua might be suspected of fraud, and then transferred him to the public security organs.

the verdict also stated that half a year after duan hua was taken into custody, on february 1, 2023, qin lian, the former legal representative of guilian company, reported the company's debt issue to the qixing district branch of the guilin public security bureau. the bureau immediately opened an investigation into duan hua on suspicion of fraud.

the verdict shows that the person duan hua was accused of bribing was liu jun, the former director of the execution bureau of yanshan district court. liu jun was the judge who participated in the first instance, mediation and first execution of the contract dispute between guilian company and lijiang fengqing travel.

the verdict states that when liu jun was investigated by the supervisory committee, he confessed that he had received 200,000 yuan from duan hua, while duan hua confessed to the supervisory committee that liu jun had demanded a bribe of 30,000 yuan. the first instance court stated that in the absence of other evidence to prove that liu jun had indeed received 200,000 yuan, it determined that duan hua had bribed 30,000 yuan.

on december 28, 2023, the guilin municipal commission for discipline inspection issued a notice on liu jun, former full-time member of the trial committee of the yanshan district court of guilin, for receiving gifts in violation of regulations and accepting banquets that may have affected the impartial performance of his official duties.

the notice stated that from 2015 to 2021, during the spring festival and other holidays, liu jun asked for and accepted gifts such as shopping cards, cigarettes, and high-end liquor from those he managed and served, and repeatedly accepted banquets arranged by those he managed and served. liu jun also had other serious violations of discipline and law. in may 2023, liu jun was expelled from the party and removed from his government post, and demoted to a second-level clerk.

duan hua was prosecuted for suspected fraud and bribery. the verdict stated that liu jun voluntarily surrendered all the illegal funds of 418,440 yuan. however, the specific amount of bribes was not specified.

the court of first instance found that guilian company and guilin bosheng investment consulting co., ltd. were both subsidiaries of guilin bus industry group co., ltd. (hereinafter referred to as "guike group"). qin lian and xu lunguang served as vice chairman and director of guiike group respectively. qin lian also served as the legal representative of bosheng company and the legal representative of guilian company before october 2012. qin lian stated in his testimony that he was "the actual manager of guilian company after 2010."

since 2010, guilian company has no main business, and its staff has been transferred to guike group. its daily affairs are also managed by guike group. in december 2010, guike group transferred all the shares of guilian company to bosheng company. relevant information shows that guike group was formerly guilin bus factory, a long-established state-owned enterprise in guangxi. its "guilin daewoo" luxury buses jointly produced with south korea's daewoo group were once sold well throughout the country. after the reorganization of guike group, the equity of guilian company changed, and it is now actually controlled by a private enterprise in shanghai.

the back-and-forth execution lawsuit

duan hua said that although someone had reported it, the person involved, "zhao jun", had died, and it was very difficult to prove that "yang zhiming" was zhao jun. he spent three years collecting evidence, conducting handwriting and portrait identification, and going through procedures such as execution objection and reconsideration before he finally won the case.

ma junjie, who provided the clue, testified that he was the deputy general manager of zhao jun's lijiang fengqing travel company. many years after the company went bankrupt, he accidentally met zhao jun, who had changed his name to "yang zhiming", and learned that zhao jun was married and living in xinjiang, and that he and others were running the turpan desert ecological botanical garden and had a lot of property in xinjiang. at zhao jun's invitation, ma junjie also went to xinjiang to develop.

huang haifeng was a shareholder of zhao jun's company. in 2011, zhao jun died of illness, and his wife wanted to inherit the company's shares and had a lawsuit dispute with huang haifeng. ma junjie said that he reported zhao jun's situation in xinjiang to the relevant departments in guilin for personal reasons, and huang haifeng also expressed his support. it was through these two people that duan hua obtained a lot of information about zhao jun in xinjiang.

the court of first instance found that in 2013, after duan hua and others returned from xinjiang, they reported the relevant situation to qin lian and xu guanglun (director of guike group), believing that the execution of the case that had been terminated could be resumed. qin lian, xu guanglun and duan hua verbally reached a preliminary intention to transfer the debt involved in the case, but no agreement was signed and duan hua did not pay the price.

at that time, guilian company entrusted duan hua as an agent to apply to yanshan court for resumption of execution of the case, but the case was not accepted. liu jun said in the interrogation record that he did not agree to resume execution of the case at that time because the procedure for identifying "yang zhiming" as zhao jun was very complicated, and the execution was too difficult and took too long. in the end, it was the guilin state-owned assets supervision and administration commission that stepped in and coordinated with the guilin municipal political and legal committee, "the political and legal committee asked us to resume execution of the case."

duan hua's defense lawyer said that the fact that various departments were able to coordinate and inquire about the resumption of execution of this case at that time was the result of duan hua always representing guilian company and constantly reporting the situation to various departments.

finally, the yanshan court accepted the case on june 30, 2014 and resumed execution. on the same day, it issued an execution ruling to seal and freeze the equity and property of yang zhiming's travel company in turpan, and also found out yang zhiming's real estate and other business assets, and added his wife feng meiying as the person to be executed.

on august 19, 2014, feng meiying filed an objection to the execution with the yanshan court, arguing that the procedure for adding her as a person to be executed was illegal and that there was no basis for determining that yang zhiming was zhao jun.

the case went back to court again, and the yanshan court twice commissioned an appraisal agency to conduct a judicial appraisal on whether zhao jun and "yang zhiming" were the same person.

after the yanshan district court rejected feng meiying's objection for the first time, feng meiying applied for reconsideration to the guilin intermediate people's court. after hearing, the guilin court sent the case back to the yanshan district court for retrial on may 21, 2015. during this period, after zhao jun and "yang zhiming" were identified as the same person, feng meiying again raised objections to the identification opinion. after repeated litigation, the court finally confirmed that "yang zhiming" was zhao jun. feng meiying was added as the person subject to execution, and the equity of the two was seized and frozen. feng meiying applied for reconsideration again, which was rejected by the guilin intermediate court.

risk agency and credit transfer

in july and september 2016, feng meiying, the wife of "yang zhiming", paid 62.13309 million yuan in execution fees to the yanshan district court. prior to that, on january 6, 2016, guilian company and duan hua and his gufang law firm signed the "debt transfer agreement" mentioned in the above-mentioned risk agency.

the paper noted that guilian company and duan hua agreed in the agreement that, given the complexity of the enforcement case, the high costs and risks, duan hua had already paid 50,000 yuan in travel expenses and appraisal fees in the case, and that he would need to pay an estimated 100,000 yuan in appraisal fees, auction fees, and several travel expenses in the future. guilian company is now a particularly distressed enterprise and is unable to pay the relevant expenses.

the agreement clearly states that after negotiation, in order to ensure that the execution case can proceed smoothly and that the interests of both parties can be realized, an agreement was reached on the basis that duan hua voluntarily assumed the execution risk of the case and the risk of expenditure: guilian company will transfer the execution debt to duan hua, including the execution principal, interest and other rights, and duan hua will be the applicant for compulsory execution of the case. the debt transfer fee is 300,000 yuan, and the time and condition for the transfer fee to be paid to guilian company within three days of the execution return.

on june 20, 2016, the yanshan district court sealed up the five houses left by "yang zhiming" in urumqi and froze feng meiying's 5 million yuan deposit. after that, feng meiying paid the court 62.13309 million yuan in execution money in two installments in july and september. on july 13, guilian company issued a confirmation letter to the execution bureau of yanshan court regarding the recipient of the execution money.

the confirmation letter stated that since the company had transferred all the rights and interests generated by the execution of the case to duan hua, all the execution funds of the case were collected by duan hua and the company would no longer collect them. the owner of the execution funds of the case was duan hua.

qin lian said that at that time, it was unknown whether the debt could be recovered and how much could be recovered, so he proposed to buy out the debt for 300,000 yuan. how to handle it afterwards was the lawyer's business, and he would bear the risk. in their view, there was no difference between debt transfer and risk agency contract.

the minutes of the meeting of the guilin state-owned assets supervision and administration commission on october 19, 2015 stated that feng meiying raised an objection after being added as the person subject to execution, and the case was heard by the guilin intermediate court and sent back for retrial. the yanshan court and the appraisal agency were going to yunnan and xinjiang to investigate and collect evidence. guilian company was unable to pay the travel expenses, so the expenses were paid by duan hua. however, the case was still ongoing and more than 100,000 yuan of related expenses were required.

the meeting minutes showed that at that time, guilian company had more than 20 cases under execution in the guilin qixing district court, with a total amount of more than 3 million yuan.

therefore, in order to ensure the smooth progress of the execution of the case and protect the interests of lawyers and enterprises, duan hua proposed to handle it by transferring the debt. he was willing to bear the expenses that had been paid and the expenses that needed to be spent. the price of the debt transfer was 300,000 yuan. as state-owned assets were involved, the participants questioned this method and proposed the method of lawyer risk agency.

the risk agency agreement signed between guilian company and duan hua shows that in order to protect the rights and interests of both parties, duan hua and guilian company signed a "debt transfer agreement" for record. if a third party may make a claim for the execution of the case, the "debt transfer agreement" will be executed to protect the rights and interests of both parties.

focus of the case: is the debt obtained by concealing the truth?

whether duan hua concealed the truth and caused guilian company to make the wrong decision to transfer the debt to him at a low price is one of the focal points of the controversy in duan hua's fraud case.

the first instance court held that after learning the portrait appraisal conclusion that "yang zhiming" and zhao jun were the same person, duan hua, as a senior lawyer, should have known that the possibility of winning the case had greatly increased; but until he signed a written risk agency contract and debt transfer agreement with guilian company, he did not disclose or explain the key evidence and the legal opinion on the increased possibility of winning to qin lian, xu lunguang or other personnel of guilian company, causing guilian company to mistakenly believe that the case was still difficult to advance and execute, and thus made the wrong decision to transfer the debt to it at a low price.

duan hua denied any concealment and argued that chen wen, as an agent, signed for the portrait appraisal conclusion on behalf of guilian company, and guilian company knew or should have known the conclusion, and chen wen should have informed guilian company; the "minutes of the meeting" on october 19, 2015 recorded that "feng meiying raised objections again", and the relevant documents issued by guilian company in the process of executing the objection can all prove that guilian company knew the portrait appraisal conclusion before signing the written agreement on january 6, 2016.

the court of first instance held that chen wen’s act of signing for the portrait appraisal opinion had the effect of presuming that guilian company should have known the appraisal conclusion, but internally, there needed to be evidence to prove that guilian company did know. in the relevant activities of the execution objection, only duan hua and chen wen participated in the guilian company. without duan hua’s active notification, guilian company could not have known the specific content of the evidence and hearing in the relevant execution objection. the “minutes of the meeting” was prepared by duan hua. if he did not explain in detail at the meeting the content of “feng meiying has raised an objection again”, the participants would not have known the specific meaning of the content. moreover, the participants at the time confirmed that he had not mentioned the portrait appraisal conclusion, so it should be determined that he concealed the portrait appraisal conclusion at the meeting.

as to why the risk agency contract and the debt transfer agreement were signed, duan hua's defense lawyer said that at the time, guilian company had gone bankrupt, owed more than 3 million yuan, and had several cases to be executed. if the execution funds of the above execution cases entered the account of guilian company, the money would also be executed later. therefore, the two parties signed the debt transfer agreement after negotiation. this is only used as a filing contract and will take effect when a third party claims rights to counter the debts of other people. in essence, the execution is still a risk agency contract. this is to protect the interests of enterprises and lawyers, and it is also a common choice of both parties.

in addition, the defense lawyer said that as early as the end of 2013, the two parties agreed that the execution amount of 300,000 yuan would belong to guilian company, and the remaining amount would be the risk attorney fee, but they only signed a written agreement later. what affected and determined the price of the subsequent risk agency contract was the case facts and related factors when the two parties formed the agency relationship at the end of 2013, rather than the subsequent handwriting identification or portrait identification. it is normal for the identification conclusion to be overturned by a new identification conclusion during execution, and the portrait identification only increases the probability of successful execution. even if the portrait identification is successful, the person being executed can still raise an objection, and even the execution may be reversed after the execution is closed. this is the characteristic of risk agency. therefore, whether the results of the portrait identification are informed to guilian company is not a prerequisite for signing a written agreement.

"it's just that the risk agency income of duan hua and the law firm is indeed a bit high, exceeding the maximum fee ratio of 30% of the subject amount stipulated in the "regulations on the management of lawyer service fees". they are suspected of using the convenience of providing legal services to obtain the disputed rights and interests of the parties. however, this kind of violation is sufficient to be regulated by industry associations and judicial administrative departments." duan hua's defense lawyer believes.

the first instance court held that before the execution of the case between guilian company and lijiang fengqing company was resumed, the execution prospects of the case were not yet clear based on the actual situation at the time. qin lian and xu lunguang agreed in principle to transfer the debt involved to duan hua, but did not agree on the specific terms of the transfer. after the case was resumed, in response to the objection raised by the person subject to execution, he was entrusted by guilian company to participate in the litigation. after learning the conclusion of the portrait appraisal that yang zhiming and zhao jun were the same person, he had further negotiations with guilian company on the transfer of the debt involved. as the agent of the case, he had an even greater obligation to proactively inform his client and debt transferor guilian company of all the circumstances of the execution case, and to provide legal analysis opinions to guilian company based on the facts and evidence of the case, so as to ensure that guilian company could make correct and reasonable considerations on the handling of the debt involved based on the objective case circumstances.

the court held that duan hua obtained the debt in question by deceiving others by concealing the truth, causing huge property losses to guilian company. his actions were not legal civil acts but fraudulent acts.

lawyer appeals after being sentenced

in this case, duan hua was also charged with bribery. his defense lawyer said that duan hua confessed that the briber liu jun asked for 30,000 yuan, while liu jun confessed that duan hua gave him 200,000 yuan out of gratitude for his handling of the enforcement case. the two people's statements on the amount and motives were inconsistent, and the evidence could not corroborate each other. in addition, liu jun was only subject to disciplinary sanctions, while duan hua was held criminally responsible for bribery, which violated the principle of proportionality between crime and punishment.

in this regard, the court of first instance held that the evidence in the case included the testimonies of qin lian and xu lunguang, the testimony of the bribed person liu jun, and duan hua's self-written materials and multiple confessions that he gave liu jun 30,000 yuan for the execution of the case, which were sufficient to prove the fact that he bribed liu jun. the elements of the crime of bribery and the crime of accepting bribes are different, and there is no causal relationship between the punishment of the bribee and whether the briber has committed a crime.

on august 1, 2024, the gongcheng county people's court of guangxi found in the first instance that duan hua concealed the truth for the purpose of illegal possession and defrauded the victim unit of 59.13309 million yuan, which was a particularly large amount. in order to obtain improper benefits, he gave 30,000 yuan to state officials, constituting the crime of fraud and bribery, and was sentenced to eleven years in prison.

duan hua was dissatisfied with the verdict and has filed an appeal.