To alleviate the inventory pressure caused by returns of electronic products, Du and Wang devised a scheme to deliberately damage product circuit boards by applying high current, burning out components, and then claiming “quality issues” to exchange for new products, thereby committing fraud. Recently, the Haidian Court sentenced defendants Du and Wang to three years in prison, with a three-year probation, and imposed a fine.
Case Summary
Between May and September 2023, defendants Du and Wang instructed company employees (handled in a separate case) to intentionally damage returned products such as fascia guns and smart cameras purchased from a victimized telecommunications company by applying electric shocks to the components. They then concealed this fact and deceived the victimized company into providing brand new products under the pretense of quality issues. The total value of the involved products amounted to over 140,000 yuan.
In this case, the company where the two defendants worked repeatedly purchased fascia guns, cameras, and other products from the victimized company for sale on electronic platforms. To reduce the inventory pressure caused by customers’ “seven-day no-reason” return policy, the defendants exploited the victimized company’s product exchange policy by using high current to damage the circuit boards, leading to component failures, and then fabricated quality issues to obtain exchanges. The defendants naively believed that the victimized company would not detect the faults, mistakenly thinking it was a product quality issue, thus allowing them to exchange for new products of the same type. However, the victimized company noticed a surge in exchange requests from the involved company within a short period and discovered the issue through factory inspections, leading to a police report.
During the trial, the two defendants did not dispute the facts and charges brought by the prosecution, admitting guilt and accepting punishment.
Court Ruling
After hearing the case, the court found that the two defendants, with the intent of illegal possession, deceived public and private property, with a significant amount involved, constituting fraud. Considering that the defendants truthfully confessed, compensated the victimized company for losses, and obtained understanding, as well as voluntarily admitting guilt and accepting punishment, the court decided to impose a lighter sentence and apply probation. The court ultimately made the aforementioned ruling.
Judicial Commentary
In business operations, legality and integrity are the most fundamental rules. Adhering to rules and business ethics is the foundation for ensuring sustainable, legal, and compliant cooperation, which not only reduces related risks but also enhances trust among partners, thereby achieving healthy business development. One must not engage in illegal activities for trivial gains. Especially for market entities operating electronic products, all illegal destructive behaviors can be traced and clarified through technical means, ultimately harming the development of the enterprise and potentially leading to imprisonment.
(All characters in the text are pseudonyms)
Written by: Yang Guang, Cao Hongkun
Edited by: Jiang Xinyu
Reprinted from WeChat Official Account: Beijing Haidian Court
Lawyer Huang Qian’s Profile
Huang Qian / PartnerLawyer Huang Qian holds a master’s degree in corporate law from the Central University of Finance and Economics, is a member of the Communist Party of China, a partner at Beijing Anjie Law Firm, a member of the Criminal Practice Research Committee of the Beijing Lawyers Association, a member of the Difficult Cases Defense Guidance Group, and the deputy director of the Criminal Professional Committee of the Chaoyang District Lawyers Association in Beijing. She is also a columnist for the Civil Aviation Network and a registered bankruptcy administrator at the Beijing High People’s Court. She was awarded the “2015-2018 Industry Contribution Award” by the Chaoyang District Lawyers Association in Beijing. Before joining Beijing Anjie Law Firm, she was a senior partner, business director of the management committee, consultant for the criminal business department, and head of the bankruptcy case team at Beijing Beidou Dingming Law Firm.
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