Keywords: Drug Smuggling Crime ; Money laundering crime; criminal liability not pursued

Counseling Attorney: Chen Lin, Wang Zhanping

Basic Facts of the Case:

While living in Cambodia, the suspect Xu met his fellow townsman Zi, who had been imprisoned for violating Cambodian national laws. Out of camaraderie as fellow villagers, Xu regularly visited Zi in prison and, under conditions compliant with Cambodian prison regulations, even helped Zi use a mobile phone. Zi asked Xu to help him log into his WeChat account, saying that a woman from Northeast China had contacted him and asked Xu to take a look at what she wanted. After logging in, Xu noticed a message from the woman asking, “When will the delivery arrive?” Xu replied, “I’ll ask around.” Then Xu informed Zi about this, and Zi told Xu not to bother with her. As a result, Xu never logged into Zi’s WeChat again to communicate with that woman from Northeast China. Later, Zi also told Xu that he couldn’t get in touch with someone named Xiao Dong and asked Xu to send an address to that person. Zi gave Xu his phone number, so Xu forwarded the address Zi had provided via text message.

In early 2021, Zi told Xu that he had added her on WeChat using Quan’s account. After Xu accepted Zi’s friend request via Quan’s WeChat, Zi never actually used that WeChat account to communicate with Xu. It wasn’t until June 2021 that Zi transferred four sums of money to Xu via Quan’s WeChat and three sums via his own WeChat account, totaling more than 114,000 yuan. Zi didn’t tell Xu what the money was for; he simply asked Xu to use it to hire a lawyer for him. Since Cambodia settles transactions in U.S. dollars, and at the time the COVID-19 pandemic made foreign exchange conversions particularly inconvenient, Xu used U.S. dollar cash belonging to her younger brother—who works in Cambodia as a sound engineer—to pay Zi’s lawyer fees. The lawyer’s fee amounted to 15,000 U.S. dollars. As for the remaining few thousand U.S. dollars, Xu deposited them into an account held by the prison authorities, allowing Zi to use the funds for his personal expenses while incarcerated.

Based on this, the public security authorities have initiated an investigation into Xu, charging him with drug smuggling and money laundering.

Case Highlights: After accepting the commission, Tong After meeting with the suspect, Mr. Xu, I gained a clear understanding of the facts of the case and actively communicated with the investigators. Through the Cambodian Embassy, I submitted the relevant foreign-related legal documents pertaining to Ms. Zi, clarified the investigative doubts surrounding the case, and provided a legal opinion advising against the arrest of Mr. Xu. Following two periods of bail pending trial and two instances of residential surveillance as coercive measures, the procuratorate ultimately decided not to pursue criminal charges against Mr. Xu and returned his seized mobile phone and identity documents, including his passport.

Typical significance: (1) Starting from the factual details of the case, we will interview the suspect, Xu, to reconstruct the original truth of the case and analyze it from the perspective of the elements constituting the crime, thereby elucidating the investigative doubts surrounding this case.

Xu merely extended a helping hand to Zi out of fellow-townsmen camaraderie in a foreign land. As for the relationship between Zi and a woman from Northeast China, or who exactly these two individuals are, Xu knows absolutely nothing about it and has never had any contact with them. Therefore, there is no way he could have been involved in “drug smuggling” or “knowingly assisting others in drug smuggling.” Moreover, Xu certainly did not act with the intent required to commit the crime of drug smuggling.

Xu merely accepted Zi’s commission to hire a lawyer for him, and Xu was completely unaware of the source of Zi’s funds. The crime of money laundering requires that the suspect act with subjective intent—that is, “knowing full well that the upstream activity is criminal, and intentionally concealing or disguising the origin and nature of the proceeds derived from such upstream criminal activities...” In this case, Xu only knew that Zi was a fellow townsman; he had no knowledge whatsoever about Zi’s specific occupation or the source of his funds, nor did he have any idea whether the money Zi gave him came from other criminal activities. Thus, it is clear that Xu lacked the subjective intent required for the crime of money laundering. According to Article 1 of the “Interpretation on Several Issues Concerning the Specific Application of Laws in the Trial of Criminal Cases Involving Money Laundering and Other Such Crimes,” the term “knowing” as stipulated in Articles 191 and 312 of the Criminal Law shall be determined by taking into account such subjective and objective factors as the defendant’s cognitive capacity, the defendant’s exposure to the proceeds and benefits derived from others’ crimes, the types and amounts of such proceeds and benefits, the methods used to convert or transfer these proceeds and benefits, and the defendant’s own statements. First, in this case, most Chinese nationals who go to Cambodia for work do so primarily to earn a living and send money back home. Consequently, almost all Chinese workers who receive their wages in U.S. dollars will exchange them into RMB, and whenever possible, they’ll directly remit the money back to China. Therefore, it is entirely normal for these Chinese nationals to hold tens of thousands of RMB in their hands. Second, Xu and Zi were fellow townsmen and merely ordinary friends. Xu was unaware of the source of Zi’s money; he simply used Zi’s money to hire a lawyer for him and to deposit funds into the prison account. Since these kinds of jobs in Cambodia require payment in U.S. dollars, Xu used the U.S. dollars earned by his younger brother’s work directly for these purposes, while sending the RMB back home to his mother. Finally, given Xu’s cognitive abilities and the objective facts of the case, it was simply impossible for him to know that Zi was engaged in illegal or criminal activities, let alone to realize that the 114,000 yuan Zi gave him was proceeds from criminal activities. Moreover, Xu neither provided any bank accounts, transferred assets, nor—without any legitimate reason—dispersed Zi’s cash across multiple accounts—all actions that would constitute the elements of the crime of money laundering. Therefore, Xu did not possess the subjective intent required for the crime of money laundering, nor did he engage in any conduct constituting that crime. The actions involved in this case should be viewed solely as acts of assistance between friends and should not be characterized as money laundering.

2. Through Xu’s relatives in Cambodia, we actively communicated with the Cambodian judicial authorities and the embassy to obtain case files and legal documents related to Zi’s case, thereby laying a solid foundation for the final determination of the case’s nature.

Given the numerous doubts and unproven facts in this case, the defense attorney repeatedly communicated with Xu’s relatives in Cambodia, attempting to obtain the case files of a key witness—co-defendant Zi—to prove that Xu was unaware of Zi’s illegal activities and had never been involved in drug smuggling or money laundering. Thanks to the defense attorney’s persistent efforts, the procuratorate ultimately acknowledged that this case is fraught with many problems, with unclear facts and insufficient evidence. After undergoing two periods of bail pending trial and two periods of residential surveillance as coercive measures, the procuratorate ultimately decided not to pursue criminal charges against Mr. Xu and returned his seized mobile phone and identity documents, including his passport.