How Should Bank Transaction Records Be Reviewed in Economic Crime Cases in China? — Nature of Funds, Mental Elements, and Offense Elements

Can large bank transactions prove a crime? Does money entering a manager’s personal account create criminal liability? This article explains what bank records can and cannot prove in Chinese criminal cases, focusing on the nature of funds, account control, mental elements, and offense elements.

Author: Yaqi Wang
Published: 23 August 2026
Reading time: 26 min
Legal review: Yaqi Wang
中文版: 经济犯罪案件中的银行流水如何审查？——资金性质、主观要素与犯罪构成

Bottom Line: Bank Records Matter, but the Existence of Transactions Does Not by Itself Prove a Crime

In criminal cases involving fraud, the unlawful appropriation of an entity’s property by personnel taking advantage of their positions, illegal business operations, money laundering, concealment or disguise of criminal proceeds, and other offenses involving the movement of funds, bank transaction records are often important evidence for reconstructing the path of funds and analyzing how transactions occurred.

But two different questions must be distinguished:

Proving that funds moved is not the same as proving that a particular person committed a crime.

For example:

Account A transfers RMB 1 million to Account B.

The bank records may establish:

that the transfer actually occurred;
when it occurred;
the amount transferred;
the sending and receiving accounts; and
the direction in which the funds moved.

But that transaction alone will usually not answer:

Why was the RMB 1 million transferred?

Was it payment for goods, a loan, an investment, or funds of some other nature?

Who actually controlled Account B?

Who decided to receive, dispose of, or transfer the funds?

Did B know that there was anything unusual about the funds?

Did B’s conduct satisfy the elements of a particular criminal offense?

The real question in a criminal case is therefore not simply:

“Are there bank records?”

The question is:

What exactly can those records prove, and can they combine with other evidence to form a complete evidentiary basis for the alleged offense?

Under the Criminal Procedure Law of the People’s Republic of China, the facts used for conviction and sentencing must be supported by evidence, and the facts of the case must be determined through an assessment of the evidence as a whole.

Accordingly:

Bank records may be important evidence of a crime, but they cannot replace proof of all facts required to establish the elements of the offense.

1. What Can Bank Transaction Records Establish?

One of the principal evidentiary functions of bank transaction records is to document receipts, payments, and transactions involving a particular account over a defined period.

Depending on the scope of the records obtained, they will commonly show:

the account holder;
the time of each transaction;
the transaction amount;
whether funds were received or paid out;
the counterparty account;
the frequency of transactions;
certain transaction descriptions or remarks; and
the overall movement of funds during a particular period.

In cases involving multiple people and multiple accounts, comparing the relevant records may also help reconstruct:

where the funds originated, which accounts they passed through, and where they ultimately went.

For example, in a case involving company funds, it may be necessary to examine:

whether company revenue was paid into a manager’s personal account;
whether the personal account was used to pay company operating expenses;
whether the funds were subsequently transferred to related persons; and
whether the funds were ultimately used for personal consumption or other purposes.

Bank records may be necessary to establish each of these facts.

However:

The fact that a transaction appears in the bank records does not mean that those records prove every relevant fact in the case.

What a bank record establishes first and foremost is:

that a particular financial transaction occurred in a particular account.

Questions such as:

why the transaction occurred;

what the true nature of the funds was;

whether there was a genuine commercial basis for the transaction; and

whether the person involved had the required state of mind,

must still be assessed together with other evidence.

Bank transaction records should therefore neither be underestimated nor treated as proving more than they actually establish.

2. What Can Bank Transaction Records Usually Not Establish on Their Own?

Bank records are relatively objective evidence of the movement of funds, but they record the outcome of transactions. They do not automatically reveal all of the reasons behind those transactions.

For example:

A transfer of RMB 500,000, viewed in isolation, will ordinarily not show whether it was:

a legitimate payment for goods;

a loan;

an investment;

a payment collected or made on behalf of another person;

or funds of some other nature.

Likewise, the fact that money entered an individual’s account does not, by itself, establish that:

the registered account holder was the person who actually controlled the funds.

Still less does it automatically establish that:

the account holder knew that the funds had an unlawful source.

Nor does it establish that:

the account holder bears criminal responsibility for every act occurring throughout the entire chain of funds.

Bank records therefore usually cannot, standing alone, resolve the following issues.

1. Why did the transaction occur?

A bank record shows that a transfer occurred, but does not necessarily explain why.

Contracts, orders, performance records, chat messages, financial documents, and other evidence may be required to determine the underlying reason.

2. What was the true nature of the funds?

The same transfer may have entirely different legal characteristics.

For example, it may represent:

business revenue;
a loan;
an investment;
a debt-related payment;
criminal proceeds.

Its nature must be determined by considering the source of the funds, the transaction background, and their subsequent use.

3. Who actually controlled and disposed of the funds?

The registered account holder, the person operating the account, the person controlling the funds, and the ultimate beneficiary may not be the same person.

Relevant evidence may include:

how the account was used;
who controlled the relevant devices and passwords;
authorization arrangements;
the flow of funds;
relationships among the persons involved; and
communications between them.

4. What was the person’s state of mind?

Many criminal offenses require more than an objective act. They may also require proof of:

intent;
an intent to unlawfully appropriate property;
knowledge;
or another specific purpose.

Such mental elements normally have to be inferred from objective facts taken as a whole. They cannot simply be inferred from a single transaction.

One point, however, is important:

The fact that bank records cannot prove something on their own does not mean that they have little probative value.

Where the transaction records are complete and continuous, and where they corroborate contracts, chat records, witness testimony, electronic data, and other evidence, they may play an important role in establishing the source and destination of funds, patterns of transactions, and the conduct of the persons involved.

Criminal evidence review focuses on:

whether a piece of evidence is relevant to the fact to be proved, and whether different items of evidence can collectively form a coherent and complete evidentiary basis.

It does not turn on the abstract question:

whether a particular type of evidence is “useful.”

3. To Determine the Nature of Funds, Start With Why the Transaction Occurred

When confronted with a large or unusual transaction, people often focus first on one question:

Is the amount very large?

From the perspective of criminal evidence review, however, the more fundamental question is:

Why did this money exist and why was it transferred?

The same amount entering a personal account may correspond to entirely different facts.

It may be:

payment for goods that were actually delivered;
a lawful loan;
an investment;
company operating revenue;
a transfer between shareholders;
or proceeds of unlawful or criminal activity.

The nature of the funds therefore cannot be determined merely by looking at the figures shown in the bank records. The underlying transaction must be reconstructed.

Relevant materials may include:

contracts and agreements;
order records;
delivery, performance, and acceptance documents;
invoices;
documents supporting a loan;
investment documents;
accounting records;
reconciliation records;
chat messages;
emails; and
evidence showing how the funds were later used.

For example:

Suppose company revenue is paid into the personal account of the person in charge of the company.

The fact that:

“the money entered a personal account”

does not by itself establish that:

“the person in charge unlawfully appropriated the entity’s property.”

Conversely, the mere fact that:

“there was a contract”

does not automatically establish that:

“the transaction was genuine and lawful.”

It remains necessary to examine:

whether the contract was actually performed;
whether the transaction genuinely occurred;
whether the funds were used in the company’s ordinary business;
how the funds were subsequently used; and
whether the different items of evidence corroborate one another.

The type of account involved is only one factor in reviewing the funds. It is not the sole basis for determining criminal liability.

Accordingly:

Determining the nature of funds requires more than reviewing bank records or formal documentation. The actual background of the transaction must be reconstructed.

4. What Still Must Be Proven Before a Funds Transfer Can Support Criminal Liability?

A common error in cases involving financial transactions is:

seeing an unusual flow of funds and immediately jumping to a conclusion of criminality.

From an evidentiary perspective, however, several steps must still be established between the financial transaction itself and criminal liability.

The analytical chain can be expressed as follows:

Movement of funds

↓

Nature of the funds

↓

Specific conduct

↓

The person’s knowledge, intent, or purpose

↓

Elements of the relevant offense

↓

Scope of criminal liability

For example:

Bank records show that Account A transferred RMB 1 million to Account B.

The inquiry must continue:

Why was the payment made?

Who decided that it should be made?

Who controlled the funds?

Did B actually obtain any benefit?

Were the funds derived from unlawful activity?

What did B know about the relevant circumstances?

Did B’s conduct satisfy the elements of a particular offense?

Where multiple persons, multiple accounts, and multiple layers of transfers are involved, it is even more important not to reason simply that:

“Whoever’s account the money passed through is responsible for the entire amount.”

Criminal liability ultimately concerns:

whether a particular person engaged in conduct satisfying the elements of an offense, and the scope of responsibility that person should bear.

The flow of funds may provide an important route to discovering and proving the facts of a case. It does not replace proof of the elements of the offense.

5. Why Abnormal Account Activity Cannot Substitute for Proof of the Required Mental Element

In criminal cases involving the movement of funds, the authorities handling the case often focus on unusual circumstances such as:

large amounts of money entering and leaving an account within a short period;
funds being transferred out immediately after receipt;
transaction amounts that are clearly inconsistent with the account user’s ordinary financial circumstances;
frequent splitting and movement of funds among multiple accounts;
an account being operated or controlled by another person; or
transaction patterns that differ substantially from normal business activity.

These circumstances can, of course, have evidentiary value.

But an important distinction must be maintained:

An objectively unusual transaction and the person’s awareness of that unusual circumstance are not the same issue.

For example:

An account receives multiple transfers over a short period and the funds are quickly transferred out.

That fact may establish:

that the transaction pattern was unusual.

But further questions still need to be examined:

Did the account user know the source of the funds?
Did the person understand the transaction background?
Did the person participate in arranging the transfers?
Did the person have a special relationship with persons involved in the underlying offense?
Did the person obtain a manifestly unreasonable benefit?
Did the person take steps to evade supervision or conceal the funds?

It is not sufficient to reason:

“The account activity was unusual.”

and from that alone conclude:

“The person must have known that the funds were connected with unlawful or criminal activity.”

This issue is particularly important in cases involving the offense of concealing or disguising criminal proceeds and proceeds derived from them.

Under the Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases of Concealing or Disguising Criminal Proceeds and Proceeds Derived Therefrom, whether a person had the “knowledge” required by Article 312 of the Criminal Law must be determined by considering multiple factors, including the information the person encountered or received, the circumstances in which the person handled the criminal proceeds, the type and amount of the property, the manner in which the property was transferred or converted, the form of the transaction, abnormalities in the relevant bank accounts, the person’s professional experience, the relationship between the person and the perpetrator of the underlying offense, and the person’s statements and explanations.

Accordingly:

Abnormal account activity may be one factor in determining “knowledge,” but it cannot mechanically replace proof of the required mental element without reference to the other facts of the case.

It must also be emphasized that:

the above judicial interpretation addresses the determination of “knowledge” specifically in cases involving concealment or disguise of criminal proceeds and proceeds derived from them.

For this offense, the judicial interpretation provides that “knowledge” includes both knowing and circumstances in which the person should have known, subject to a comprehensive assessment of the facts of the case.

Different offenses do not necessarily impose the same mental-element requirements.

For example:

some offenses require proof of an intent to unlawfully appropriate property;
some require proof of a particular form of intent;
some involve crimes committed by entities, joint crimes, or other specific forms of responsibility.

Therefore:

A rule used to determine “knowledge” for one category of offense should not automatically be applied to every criminal case involving financial transactions.

From the perspective of evidence review, however, the underlying methodology has broader significance:

Objective abnormalities should be evaluated together with the person’s knowledge, conduct, and the background of the case. They cannot independently establish criminal liability.

6. Why the Same Funds Can Have Different Evidentiary Significance in Different Offenses

A bank transaction is not itself a crime.

The same transfer may serve very different evidentiary functions depending on the alleged offense and the circumstances of the case.

The central question is:

What facts must be proved for the particular offense?

1. In fraud cases

Bank records may be relevant to determining:

whether the victim actually transferred property;
whose control the property entered;
how the person disposed of the funds after receiving them;
whether the use of the funds was consistent with the transaction background; and
whether the relevant conduct may indicate an intent to unlawfully appropriate the property.

But the flow of funds must ordinarily be assessed together with:

fabricated facts;
concealment of the truth;
the manner in which the property was obtained; and
the person’s intent to unlawfully appropriate the property.

The bank records cannot, independently of the fraudulent conduct and the required intent, establish the offense by themselves.

2. In cases involving the unlawful appropriation of entity property

The inquiry may focus on:

who originally owned the funds;
the relationship between the person and the company, enterprise, or other entity;
whether the person took advantage of his or her position; and
whether property belonging to the entity was unlawfully appropriated through the use of that position.

Thus, even where:

company funds entered a personal account,

it may still be necessary to distinguish among:

ordinary business receipts;
collection or payment on behalf of the company;
transfers between the company and its shareholders; and
the unlawful appropriation of entity property by personnel taking advantage of their positions.

3. In cases involving concealment or disguise of criminal proceeds

The principal questions include:

whether the funds were criminal proceeds or proceeds derived from them;
whether the person had the “knowledge” required by law; and
whether the person engaged in conduct that concealed or disguised those proceeds.

For this offense, the judicial interpretation provides that “knowledge” includes both knowing and circumstances in which the person should have known, although the conclusion must still be reached through a comprehensive assessment of the facts of the particular case.

Accordingly:

The same transfer may relate to entirely different facts to be proved depending on the offense alleged.

That is why:

“the transaction amount was very large,”

“the funds passed through a personal account,”

“the account activity was unusual”

cannot, without reference to the elements of the particular offense, directly support a conclusion of criminal liability.

A more accurate sequence of analysis is:

First determine what the specific offense requires the prosecution to prove, and then determine what the bank records can prove in relation to those requirements.

Not:

Identify unusual bank activity first and then search for a criminal conclusion.

7. Commingling Company and Personal Accounts: Financial Irregularities and Criminal Liability Must Be Examined Separately

The commingling of company and personal accounts is not uncommon in business operations.

Examples include:

company revenue being received in the personal account of a manager or person in charge;
a personal account being used to pay company expenses;
frequent transfers between shareholders and the company; and
company funds and personal funds not being kept strictly separate.

These circumstances require examination.

But criminal analysis should avoid two opposite extremes.

The first mistaken view:

Company and personal accounts were commingled, so a crime must have been committed.

This conclusion ignores the background to the transactions.

In actual business operations, arrangements may exist for:

collecting or making payments on behalf of another party;
temporary funding;
shareholder loans;
or operational convenience.

An irregular account structure does not mean that the facts establishing a criminal offense have already been proved.

The second mistaken view:

Many companies operate this way, so it is merely a financial management issue and has nothing to do with criminal liability.

That is also inaccurate.

If the commingling of accounts is used to:

conceal company revenue;
transfer company property;
unlawfully appropriate company funds;
evade supervision; or
conceal proceeds of unlawful or criminal activity,

criminal liability may require further consideration.

When company and personal accounts are commingled, the inquiry should continue:

Why was a personal account used?

To whom did the funds actually belong?

Who decided where the funds would go?

Were the funds used in the company’s business?

How were the funds subsequently used?

Did the persons involved have the relevant knowledge or purpose?

Likewise, where a company has unusual financial transactions, an individual should not be held criminally liable merely because he or she is:

the legal representative;

the actual controller;

or the person in charge of the company.

It remains necessary to determine:

who made the relevant decisions;
who organized or directed the conduct;
who actually controlled the funds;
who participated in the specific acts; and
the position and role of each person in the case.

Conversely:

The fact that a person did not personally operate the bank account does not automatically exclude criminal liability.

A person in charge may commit or participate in an offense through:

decision-making;
authorization;
organization;
direction;
actual control over the arrangements for the funds; or
participation in the distribution of benefits.

The key question is therefore not:

Who clicked the transfer button?

It is:

Who committed, organized, directed, or participated in conduct satisfying the elements of the offense and, under the law, should bear the corresponding criminal responsibility?

8. What Other Evidence Should Be Cross-Checked Against Bank Records?

Effective review of bank transaction records is not simply a matter of examining each transfer one by one.

More importantly:

Evidence should be identified according to the fact that needs to be proved, so that the source, destination, and nature of the funds can be explained.

1. Evidence establishing the source of funds

Key materials may include:

records of payments made into the account;
contracts and orders;
documents showing the basis for the income; and
materials explaining the transaction background.

The question is:

Where did the money come from, and why did it enter this account?

2. Evidence establishing the underlying transaction

Relevant materials may include:

contracts;
invoices;
delivery records;
acceptance documents;
evidence of services performed; and
reconciliation documents.

The question is:

Did the funds correspond to a genuine transaction?

3. Evidence establishing where the funds went

The analysis cannot stop at:

The money came in.

It must continue to ask:

Where did the money go afterward?

This may involve examining:

business expenses;
procurement payments;
repayment of debts;
cash withdrawals;
consumption;
subsequent transfers; and
refunds or repayments.

4. Evidence establishing actual control of the account

The registered account holder and the person who actually controls the account may be different.

Relevant evidence may include:

mobile phones, computers, and other devices;
online banking login information;
who possessed the bank card or USB security token;
authorization arrangements;
transaction operation records; and
statements from relevant persons.

5. Evidence establishing the person’s knowledge

Relevant materials may include:

chat messages;
emails;
telephone records;
witness testimony;
statements of co-suspects or co-defendants;
the person’s own statements and explanations;
professional experience; and
the transaction background.

A person’s mental state normally has to be assessed through objective facts viewed as a whole.

Ultimately, however, the question remains:

Can the existing evidence form a coherent and reasonable evidentiary basis?

6. Evidence showing how the transactions were treated in the company’s accounts

In cases involving companies, it may also be necessary to review:

accounting vouchers;
accounting books;
financial statements;
audit materials;
tax records; and
internal approval records.

This is because:

The movement of funds through bank accounts and the accounting treatment of those transactions in a company’s books are facts at two different levels.

Any inconsistency between the two may itself require further explanation.

9. What Do Criminal Defense Lawyers Focus on When Reviewing Bank Records?

In criminal cases involving financial transactions, reviewing bank records does not simply mean calculating:

how much money was received;

how much money was transferred.

The more important task is to determine, in light of the disputed issues in the case, what those records prove and what they do not prove.

Several questions commonly require particular attention.

1. What is the nature of the funds?

This is the most basic question in reviewing bank records.

It may be necessary to distinguish among:

lawful transaction payments;
loans;
investments;
company operating revenue;
shareholder-related transfers;
collection or payment on behalf of another person;
criminal proceeds or other funds connected with the case.

The legal nature of the same transfer may be impossible to determine accurately if it is separated from the transaction background.

For example:

A customer transfers RMB 1 million to the personal account of a company manager.

That fact may correspond to:

payment by the customer for goods purchased from the company;
a transfer between shareholders;
a personal loan;
or another financial arrangement.

The nature of the funds cannot be determined solely because the receiving account was a personal account.

2. Why did the funds pass through this account?

The direction of the funds is not the final answer.

Further questions include:

Why did the payer choose this account?

Who provided the account details?

Did the account holder participate in the transaction?

Was the use of the account authorized by the company?

Was it consistent with an established course of business?

Was the account used to evade supervision or conceal the source of the funds?

3. Who actually controlled and used the account?

The person in whose name a bank account is registered and the person who actually controls it are not necessarily the same.

Relevant questions include:

Who possessed the bank card?
Who knew the password?
Who logged into online banking?
Who initiated the transfers?
Who decided how the funds would be used?
Who ultimately benefited from the movement of the funds?

Particularly in cases involving crimes committed by entities, joint crimes, or multiple participants:

Identifying the account does not mean that every person bearing criminal responsibility has been identified.

It remains necessary to determine:

What was the relationship between the account and each particular person involved?

4. Does the flow of funds form a complete chain?

A single transaction often reflects only one point in a larger sequence.

Criminal cases may require reconstruction of the entire chain:

Where did the funds originate?

Which accounts did they pass through?

Were they split or transferred?

Where did they ultimately go?

Who ultimately benefited?

For example:

Account A receives funds, transfers them to Account B, and Account B then transfers them to Account C.

The analysis must continue:

Why did each transfer occur?

What was the relationship among the accounts?

Did the persons involved act together?

Where did the funds ultimately end up?

It is not sufficient to reason:

Whoever’s account the money passed through is responsible for the entire amount.

5. Did the person have the state of mind required by law?

This is a central issue in many cases involving funds.

It may be particularly important where the case concerns:

concealment or disguise of criminal proceeds;
assistance in fraudulent conduct;
conduct related to money laundering; or
joint crimes.

The review may need to determine:

What information did the person receive?

Did the person know the source of the funds?

Did the person understand that the transaction was unusual?

Did the person receive a manifestly unreasonable benefit?

Did the person conceal or transfer the funds in a suspicious manner?

One point must be kept in mind:

A person’s state of mind cannot usually be observed directly. It has to be inferred from objective circumstances.

These may include:

the person’s relationship with the transaction counterparties;
the degree of abnormality in the transactions;
the manner in which the transactions were conducted;
the person’s professional experience;
communications; and
the way the funds were handled.

6. Do the bank records corroborate the other evidence?

Bank transaction records rarely exist in isolation.

They should normally be examined together with:

chat records;
contractual documents;
electronic data;
witness testimony;
transaction records;
financial records;
interrogation records; and
other objective evidence.

The ultimate question is:

Can the existing evidence form a coherent and complete evidentiary basis?

Not:

Is there one bank record that looks unusual?

10. What Should Family Members or Company Managers Do When They Discover Unusual Transactions?

When large transactions, funds of unknown origin, or other unusual movements appear in an account, some people instinctively consider:

immediately deleting chat records;
contacting relevant persons to coordinate what they will say;
rushing to provide explanations or large volumes of documents;
or attempting to avoid an investigation by other means.

In a criminal case, however, the more important step is:

Preserve objective materials first, and then determine how they should be handled.

1. Preserve original materials

Relevant materials should be properly retained, including:

bank transaction records;
contracts and orders;
invoices and receipts;
financial records;
chat records;
emails;
business correspondence and documents; and
relevant data stored on devices.

In particular:

Do not delete, alter, fabricate, conceal, or transfer evidence or materials that may be relevant to the case.

For electronic data, the original device and complete records should be preserved where possible so that subsequent operations do not affect the authenticity of the evidence.

2. Organize the facts chronologically

In many cases, family members or company managers do not have complete information.

They can nevertheless begin by organizing:

what transaction occurred on what date;
who proposed the transaction;
who participated in the communications;
who arranged the payment;
who controlled the account; and
how the funds were subsequently used.

They should also distinguish among:

facts they personally know;
information relayed by other people; and
assumptions that have not yet been verified.

This helps ensure that the case can later be analyzed accurately.

3. Do not rush to characterize the case

The same transaction:

may be part of ordinary business activity;

or it may involve criminal risk.

The decisive issue is not:

whether the account activity looks unusual.

It is:

what the nature of the funds was, what relationships existed among the persons and conduct involved, and what the relevant persons knew.

4. Cooperate with lawful requests from the authorities handling the case

An important distinction must be made between:

preserving materials and submitting materials to the authorities handling the case.

Which materials should be submitted, when they should be submitted, to which authority, and what fact they are intended to prove will depend on the circumstances of the particular case.

However, where the authorities handling the case lawfully obtain, seize, or require the production of relevant materials, those lawful procedures should be complied with.

5. Do not rely on claims that a criminal case can be “fixed” by paying money

Criminal liability is ultimately determined by:

the facts of the case;
the evidence; and
the applicable law.

Claims that someone can “use connections to resolve the case,” “guarantee that the case will be withdrawn,” or “guarantee a decision not to prosecute” generally lack a reliable basis and may create additional legal risks.

11. Frequently Asked Questions

1. Does a large transaction amount necessarily indicate criminal activity?

No.

The amount shown in the bank records establishes the scale of the funds.

Criminal liability must still be assessed in light of:

the source of the funds;
the transaction background;
control over the account;
the person’s knowledge of the relevant circumstances; and
whether the elements of a particular offense are satisfied.

A large amount may attract greater scrutiny, but the amount alone does not establish a crime.

2. Can a person be convicted if there are bank records but no chat records?

That cannot be answered in the abstract.

Chinese law does not require chat records to exist before a conviction can be entered.

Criminal cases are proved through the evidence as a whole.

Bank records may combine with:

contracts;
financial records;
witness testimony;
electronic data; and
other objective evidence

to form the evidentiary basis of the case.

The key question is:

Whether the existing body of evidence meets the applicable standard of proof in a criminal case.

3. If company funds enter the owner’s or manager’s personal account, does that mean the person committed a crime?

Not necessarily.

It is necessary to distinguish among:

ordinary business arrangements;
temporary funding arrangements;
transfers between shareholders and the company;
collection or payment on behalf of the company.

At the same time, it is also necessary to examine whether:

entity property was unlawfully appropriated by personnel taking advantage of their positions;

company revenue was concealed;

or other conduct satisfying the elements of a criminal offense occurred.

An irregular account structure does not automatically establish criminal liability.

4. Why can a company manager be criminally liable even if he or she did not personally make the transfer?

Because criminal liability does not turn on:

who ultimately clicked the transfer button.

The relevant question is:

who committed, organized, directed, or participated in conduct satisfying the elements of the offense.

If a person in charge participated in the criminal conduct through:

decision-making;
authorization;
direction; or
actual control of the funds,

that person may still bear the corresponding criminal responsibility.

5. Does a frozen account necessarily mean that the account holder is suspected of a crime?

Not necessarily.

An account may be frozen under different procedures and for different reasons.

For example:

a measure taken in connection with a criminal investigation;
a civil enforcement measure;
or an investigation connected with another case.

The freezing of an account, by itself, does not establish that the account holder has committed a crime.

6. If bank transactions look unusual, does that mean the funds must be unlawful?

No.

An unusual transaction is a signal that further examination may be necessary.

The analysis should continue by considering:

the transaction background;
the nature of the funds;
the relationships among the relevant acts and persons; and
the person’s state of mind.

An unusual circumstance cannot replace complete proof of a criminal offense.

7. When lawyers review bank records, do they mainly focus on the amount?

No.

The amount is only one factor.

Criminal defense lawyers will ordinarily focus more closely on:

what fact each transaction corresponds to;
why the funds moved;
who controlled the account;
who actually benefited; and
whether the transaction can be connected to the elements of a particular offense.

8. Can bank records directly prove an intent to unlawfully appropriate property?

Usually not.

An intent to unlawfully appropriate property is a mental element.

It normally has to be assessed by considering:

the manner in which the person acted;
the transaction background;
how the funds were obtained;
how the funds were used; and
the person’s subsequent conduct.

The conclusion must be based on an assessment of those circumstances as a whole.

Conclusion: The Core of Bank Record Review Is to Return to the Elements of the Offense

In criminal cases involving financial transactions, bank records are often important evidence.

But criminal evidence review cannot stop at the question:

“Are there bank records?”

The more important question is:

“What can these records prove?”

And:

“Can they combine with the other evidence to establish the elements of the offense?”

Whether the case involves fraud, the unlawful appropriation of entity property by personnel taking advantage of their positions, concealment or disguise of criminal proceeds, or another offense involving the movement of funds, it remains necessary to distinguish among:

the fact that funds moved;
the legal nature of the funds;
control over the relevant accounts;
the person’s state of mind; and
the elements of the particular offense.

Ultimately, criminal liability must be assessed by returning to:

the nature of the funds, the relationships among the relevant acts and persons, the person’s state of mind, and the complete body of evidence.

Principal Legal Authorities

1. Criminal Procedure Law of the People’s Republic of China

Relevant to:

rules governing the review of evidence;
the requirement that facts supporting conviction and sentencing be proved by evidence; and
assessment of the evidence in the case as a whole.

2. Interpretation of the Supreme People’s Court on the Application of the Criminal Procedure Law of the People’s Republic of China

Relevant to:

review and evaluation of evidence;
corroboration among different items of evidence; and
comprehensive assessment of probative value.

3. Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases of Concealing or Disguising Criminal Proceeds and Proceeds Derived Therefrom

Relevant to:

factors used to determine “knowledge” in cases involving concealment or disguise of criminal proceeds; and
comprehensive assessment of unusual account activity, transaction methods, relationships among persons involved, and other relevant circumstances.

4. Criminal Law of the People’s Republic of China

Relevant to the elements of:

fraud;
the unlawful appropriation of an entity’s property by personnel taking advantage of their positions;
concealment or disguise of criminal proceeds and proceeds derived therefrom; and
other offenses involving financial transactions.