Verdict of the Beijing Municipality Haidian District People's Court in the Cai Zhuohua et. al. Illegal Operation of a Business Trial ;The Truth about Pastor Cai Case

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Verdict of the Beijing Municipality Haidian District People’s Court in the Cai Zhuohua et. al. Illegal Operation of a Business Trial
The following translation of the judgment in the Cai Zhuohua et. al. illegal operation of business trial was prepared by CECC staff based on versions provided by the China Aid Association. The original Chinese version of the judgment can be viewed by clicking “more” below.
Additional background on this case is available here.
Beijing Municipality Haidian District People’s Court
Criminal Verdict
(2005) Hai Judicial Criminal First Instance Document Number 1722
Public Prosecutorial Agency Beijing Municipality Haidian District People’s Procuratorate
Defendant Cai Zhuohua, male, born April 10, 1971 in Hunan province, Hengyang city, Han ethnicity, junior college education, unemployed, residing at Beijing municipality, Xuanwu district, Pingyuanli community, building 5, entrance 12, number 402. Detained on September 11, 2004, on suspicion of illegally operating a business, and arrested on October 20 of that same year. Currently in custody at the Beijing municipality Haidian district detention center.
Defense counsel Zhang Xingshui, a lawyer at the Beijing Jingding Law Firm.
Defendant Xiao Gaowen, male, born September 20, 1968 in Hunan province, Hengyang city, Han ethnicity, high school education, unemployed, residing at Hunan province, Hengyang city, Yanfeng district, Suyanjing, number 16, household 2-103. Detained on September 27, 2004, on suspicion of illegally operating a business, and arrested on October 20 of that same year. Currently in custody at the Beijing municipality Haidian district detention center.
Defense counsel Jin Xiaoguang, a lawyer at the Beijing Jingding Law Firm.
Defendant Xiao Yunfei, female, born January 6, 1972 in Hunan province, Hengyang city, Han ethnicity, junior high school education, unemployed, residing at Hunan province, Hengyang city, Yanfeng district, Suyanjing, number 16, household 2-103. Detained on September 27, 2004, on suspicion of illegally operating a business, and arrested on October 20 of that same year. Currently in custody at the Beijing municipality Haidian district detention center.
Defense counsel Gao Zhisheng, a lawyer at the Beijing Shengzhi Law Firm.
Defense counsel Fan Yafeng, editor in the editorial department of “Legal Research” at the Institute of Law, China Academy of Social Science Law Institute.
Defendant Hu Jinyun, female, born September 23, 1962 in Hubei province, Jichun county, Han ethnicity, junior high school education, unemployed, residing at Hubei province, Jichun county, Caohe township, Xiacao village, Siyin district. Detained on September 27, 2004, on suspicion of concealing illegally acquired goods, and arrested on October 20 of that same year. Currently in custody at the Beijing municipality Haidian district detention center.
Defense counsel Teng Biao, faculty at China University of Politics and Law.
The Beijing Municipality Haidian District People’s Procuratorate charged defendants Cai Zhuohua, Xiao Gaowen, and Xiao Yunfei with illegally operating a business, and defendant Hu Jinyun with concealing stolen goods pursuant to Beijing Municipality Haidian District People’s Procuratorate Indictment Document [2005] Number 100, and initiated a prosecution with this court. This court placed the case on its docket on June 3, 2005, constituted a collegial panel in accordance with the law, and tried this case in open court. The Beijing Municipality Haidian District People’s Procuratorate appointed procurator Li Muzi to appear in support of the prosecution, and defendant Cai Zhuohua and his defense counsel Zhang Xingshui, defendant Xiao Gaowen and his defense counsel Jin Xiaoguang, defendant Xiao Yunfei and her defense counsel Gao Zhisheng and Fan Yafeng, and defendant Hu Jinyun and her defense counsel Teng Biao appeared in court to participate in the litigation. Trial proceedings have now concluded.
The Beijing Municipality Haidian District People’s Procuratorate charged:
Defendants Cai Zhuohua, Xiao Gaowen, and Xiao Yunfei, using book samples obtained from third parties or materials downloaded from the Internet for content, did employ third parties in this city’s Haidian district, Lanyuan community, building 24, entrance 1, number 602, to engage in illegal publishing, and used a printing press to illegally print books. On September 11, 2004, in south storage area 3A of the Beijing Fifth Ring Jishun Tong Storage and Transportation Company Limited in this city’s Daxing district, Jiugong township, 24 Jiuzhong Road, public security agencies tracked down and recovered over 200,000 volumes of books illegally printed by defendants Cai Zhuohua, Xiao Gaowen, and Xiao Yunfei, which the Beijing Municipal Press and Publication Administration authenticated as illegal publications. On September 11, 2004, civilian police captured defendant Cai Zhuohua in this city’s Haidian district, Qinglong Bridge, on the road in front of the Central Party School’s south gate. The next day, in the vicinity of this city’s Haidian district, Dayun village, defendant Hu Jinyun, having full knowledge that defendants Xiao Yunfei and Xiao Gaowen had given her 80,000 yuan in illicit funds to illegally operate a business, nonetheless accepted said 80,000 yuan and deposited it in the bank under her own name. On September 27 of the same year, civilian police captured the defendant Hu Jinyun in Hunan province, Hengshan [sic] city, Zhongtang village, group 6. The same day, based on the information that Hu Jinyun provided, civilian police captured the defendant Xiao Gaowen in Hunan province, Hengyang city, at the entrance to Yueping Park. The same day, based on the information that Xiao Gaowen provided, civilian police captured the defendant Xiao Yunfei in Hunan province, Hengyang city, inside a household.
With respect to the foregoing charges, the procuratorial agency provided this court with the relevant evidentiary materials, and believes that the behavior of defendants Cai Zhuohua, Xiao Gaowen, and Xiao Yunfei constitutes illegally operating a business, and that the behavior of defendant Hu Jinyun constitutes concealing illegally acquired goods, and further that Xiao Gaowen and Hu Jinyun have rendered meritorious service, and submit to this court that the criminal culpability of the four defendants be treated separately in accordance with the law.
Defendant Cai Zhuohua defended himself on the grounds that the compiling and printing of the books was not done to seek personal profit, that the origin of the funds for printing the books was what he had accumulated over many years of engaging in business, that no other person gave him capital, and that his behavior was not the behavior of operating a business. His defense counsel believes that Cai Zhuohua’s compiling and printing of books was not done with the purpose of pursuing illegal profits, and did not severely harm social order and disrupt market order, and that his behavior does not constitute the crime of illegally operating a business.
Defendant Xiao Gaowen defended himself on the grounds that he engaged in neither buying nor selling, so there was no illegal operation of a business. His defense counsel believes Xiao Gaowen was employed by Cai Zhuohua to carry out printing operations, and was unclear as to what publishing formalities were necessary for this operation, and that his behavior does not constitute the crime of illegally operating a business.
Defendant Xiao Yunfei defended herself on the grounds that she did not compile and print books to make money, and that the 80,000 yuan she gave to Hu Jinyun was not acquired from illegally operating a business. Her defense counsel believes Xiao Yunfei did not have the status of a business operator, the books which she compiled and printed were publications intended for internal use, it was not necessary to undertake any publishing formalities, and they were not illegal publications. These books did not enter the market, were not linked to any transaction, could not have disrupted market order, and there was no seeking after profit, which is the core characteristic of “operating a business,” and therefore it could not be considered operating a business. Therefore her behavior does not constitute the crime of illegally operating a business.
Defendant Hu Jinyun defended herself on the grounds that Xiao Yunfei gave her 80,000 yuan as living expenses, and she was not aware that the funds were illegally acquired. Her defense counsel believes there is no evidence proving whether or not the 80,000 yuan involved in this case were illegally acquired funds. Xiao Gaowen and Xiao Yunfei were members of Hu Jinyun’s family, and their giving Hu Jinyun the 80,000 yuan for living expenses was a kind of gift between relatives. Hu Jinyun had no way to determine that the 80,000 yuan were illegally acquired funds, and therefore, Hu Jinyun’s behavior does not constitute the crime of concealing illegally acquired goods.
The proceedings revealed that defendants Cai Zhuohua, together with Xiao Gaowen and Xiao Yunfei, using book samples obtained from third parties or materials downloaded from the Internet for content, did employ third parties in Beijing municipality, Haidian district, Lanyuan community, building 24, entrance 1, number 602, to engage in illegal publishing, and used a printing press to illegally print books. The specific division of labor among the three was: with Cai Zhuohua being the person in charge, it was Cai Zhuohua who contacted the professionals and provided the funds to Xiao Yunfei, it was Xiao Yunfei who led the task of typesetting and paid the printing costs, it was Xiao Gaowen who took the electronic files to the layout factory for the production of the films, who contacted the printing press for printing and binding, and who contacted the shipping company and at the end sent books to all areas in accordance with the request of Cai Zhuohua. On September 11, 2004, in south storage area 3A of the Beijing Fifth Ring Jishun Tong Storage and Transportation Company Limited in this city’s Daxing district, Jigong township, 24 Jiuzhong Road, public security agencies tracked down and recovered 237,776 volumes of books illegally printed by defendants Cai Zhuohua, Xiao Gaowen, and Xiao Yunfei, which the Beijing Municipal Press and Publication Administration authenticated as illegal publications. On the same day civilian police captured defendant Cai Zhuohua in this city’s Haidian district, Qinglong Bridge, on the road in front of the Central Party School’s south gate. The next day, in the vicinity of this city’s Haidian district, Dayun village, defendant Hu Jinyun, having full knowledge that defendants Xiao Yunfei and Xiao Gaowen had given her 80,000 yuan in illicit funds to illegally operate a business, nonetheless accepted said 80,000 yuan and deposited it in the bank under her own name. On September 27 of the same year, civilian police captured the defendant Hu Jinyun in Hunan province, Hengyang city, Zhongtang village, group 6. The same day, based on the information that Hu Jinyun provided, civilian police captured the defendant Xiao Gaowen in Hunan province, Hengyang city, at the entrance to Yueping Park. The same day, based on the information that Xiao Gaowen provided, civilian police captured the defendant Xiao Yunfei in Hunan province, Hengyang city, inside a household.
The aforementioned facts were submitted by the procuratorial agency, and the following evidentiary materials have been examined and confronted, and authenticated, as evidence in the case:
1. The defendant Cai Zhuohua’s statement proves that he once confessed that beginning in early 2003, he did, in a situation of not having undertaken any of the publishing formalities, accept a third party’s charge to compile and print books, and that the origin of the book samples and capital for printing the books was provided by a third party, and that in this business project he was the person in charge, Xiao Yunfei led the task of typesetting, and Xiao Gaowen contacted the printer and shipper.
2. The defendant Xiao Yunfei’s statement proves that she once confessed to taking part in the work of compiling and printing books, and was first contacted for the business by Cai Zhuohua, and did typesetting based on book samples obtained from third parties or materials downloaded from the Internet provided by Cai Zhuohua in Haidian district, Malianwa Lanyuan community, building 24, unit 1, room 602. Subsequently, Xiao Gaowen took the electronic files of the typesetting to a film production company for the production of the films, and Xiao Gaowen then contacted the printer to print the books, and Xiao Gaowen then contacted the shipper for shipping based on the request of Cai Zhuohua, and that she was responsible for settling accounts with the printer and shipper. She did not know specifically how profit was being made, only that Cai Zhuohua gave her money, which she then took, and when it was time to pay the bill, she then withdrew the money, and overall was in it to make money. On or about September 11, 2004, she, Xiao Gaowen, and Hu Jinyun withdrew 80,000 yuan from the Zhaoshang Bank in Dayun village and gave it to Xiao Gaowen, and subsequently Xiao Gaowen gave it to Hu Jinyun for living expenses, and this money was money made from editing and printing books. At that time she did not inform Hu Jinyun of the origin of this money, but she should have known because at that time she and Xiao Gaowen and other people were relying on compiling and editing books to make money.
3. The defendant Xiao Gaowen’s statement proves that he once confessed that, beginning in August 2001, he, together with Cai Zhuohua and Xiao Yunfei, in a situation of not having [undertaken] any of the publishing formalities, did print books (the printing process was essentially the same as that in the statement by Xiao Yunfei). The goal of Cai Zhuohua and Xiao Yunfei in compiling and printing books was to make money, and each month, he received 2,000 yuan from Cai Zhuohua. On or about September 12, 2004, he and Xiao Yunfei prepared to flee after receiving word that Cai Zhuohua had been detained, and before fleeing Xiao Yunfei said that he and Cai Zhuohua had been working together for such a long time, so she gave Hu Jinyun 80,000 yuan for living expenses, which could count as compensation.
4. The defendant Hu Jinyun’s statement proves that she once confessed that at 2 o’clock in the afternoon on September 11, 2004, Xiao Yunfei withdrew 80,000 yuan from the Zhaoshang Bank in Dayun village, said simply that they had had a problem, that Cai Zhuohua had been detained for printing books, that the two of them had to leave for a while, and that she should hold onto this money for her living expenses. Although Xiao Yunfei did not say what the origin of this money was, she nevertheless knew that this money was made through their compiling and printing of books, and that they relied upon this profession for making money.
5. Deposition of witness Yu Zizhou proves that on August 29 and 30, 2004, the defendant Xiao Gaowen contacted him to print 40,000 books, and that Xiao Gaowen arranged with him to give him the printing contracts on September 2, but that in the end he was not given the printing contracts.
6. Depositions of witnesses Zhan Ruowei, Zhang Yimin, Zhang Weiqiang, and Ai Li, and the production order, bill, shipping order, and other documentary evidence from the [Seven] Rainbow Printers prove that beginning in October 2002 defendant Xiao Gaowen printed a large quantity of books at the Seven Rainbow Printers in Beijing.
7. Depositions of witnesses Li Jinbao, Li Wenping, Tian Junsheng, and Wang Shan, handwriting analyses, the operating license, and storehouse lease contract of the Beijing Rapid Delivery Shipping Service Company Limited prove that Liu Jinbao assisted Cai Zhuohua, Xiao Gaowen, and Xiao Yunfei to ship books, and assisted them in leasing a warehouse to store books in the parking lot of the Beijing Jishun Tong Storage and Transportation Company, Limited, but did not know these books were illegal publications, and on September 12, 2004, police recovered books totalling 237,776 volumes in this storeroom.
8. Depositions of witnesses Li Aili, Wang Yilin, Xiong Lili, Sun Miao, Yang Xuan, Zhang Jun, and Wang Changmei, and the operating license and lease agreement of the Maizi Culture and Art Limited Liability Company prove that the defendant Xiao Yunfei is the person responsible for the Maizi Culture and Art Limited Liability Company, and that they once typed and typeset the book materials involved in this case.
9. Deposition of witness Sun Jinbao proves that Xiao Yunfei leases a residence at Lanyuan community, number 24-2-101.
10. The authentication conclusions from the publications and authentication report on the electronic data that the Beijing Municipal Press and Publication Administration produced prove the fact that the 51 types of books totaling 237,776 volumes involved in this case are illegal publications.
11. Search records, checklists of materials in custody, photographs, and checklist records from goods acquired illegally, prove that on September 11, 2004, public security agencies recovered 51 types of books totaling 237,776 volumes from south storage area 3A of Beijing Fifth Ring Jishun Tong Storage and Transportation Company Limited and recovered computers, optical discs, and other materials from the Maizi Culture and Art Limited Liability Company, and took them into custody.
12. Bank deposit books and the checklists of materials in custody and the account freezing notification prove that on September 12, 2004, Hu Jinyun deposited 80,000 yuan, and that this account has been frozen by public security agencies.
13.The sequence of the events leading up to this case proves that public security agencies captured Cai Zhuohua on September 11, 2004, captured Hu Jinyun on the 27th of that same month, and in accordance with the information provided by Hu Jinyun, captured Xiao Gaowen; and in accordance with the information Xiao Gaowen provided, captured Xiao Yunfei.
Cai Zhuohua’s defense counsel Zhang Xingshui applied to have the witness Zhang Meihua appear in court to testify, proving the fact that she once received books delivered by Cai Zhuohua free of charge.
Through examination and confrontion of the evidence during proceedings,each of the defendants Cai Zhuohua, Xiao Gaowen, and Xiao Yunfei denies the content of their pre-trial confessions that their compiling and printing of books was commercial in nature; Xiao Yunfei denies the content of her statement that Xiao Gaowen’s salary and Xiao Yunfei’s money were entirely derived from the profit of business they had previously done; Hu Jinyun denies the content of her statement that she knew the 80,000 yuan was money Cai Zhuohua earned from compiling and printing books. Defendant Cai Zhuohua’s defense counsel, Zhang Xingshui, believes that of the evidence now available, there is no supporting evidence other than Cai Zhuohua’s partial statement that can prove that the compiling and printing of the books were of a profit-seeking nature. Defendant Xiao Gaowen’s defense counsel, Jin Xiaoguang, believes that Xiao Gaowen was merely a laborer, and was not aware of the business’ origins or what publishing formalities it required. Defendant Xiao Yunfei’s defense counsel, Gao Zhisheng, and defendant Hu Jinyun’s defense counsel, Teng Biao, believe that flaws exist in the evidence, that the public security civilian police did not disclose their own names, and that the method of interrogation raises questions of forced confession.
The court believes that the cross-examination opinion of defense counsel Gao Zhisheng and Teng Biao regarding the illegality of the form of the pre-trial statement lacks a factual basis and evidentiary support. In addition, at the same time public security agencies detained the four defendants, the agencies delivered to them individually a “Written Notice of Procedural Rights and Obligations of Criminal Suspects,” and each of the four defendants signed the public security agencies’ record of interrogations, acknowledging they had “read and verified the foregoing record,” and that the form and origin of the statements were legal, the content was settled, and therefore the pre-trial statements could be utilized as the basis for reaching a verdict. The other cross-examination opinions of defense counsel for the four defendants are addressed along with the defense opinions in the text below.
This court believes that defendant Cai Zhuohua along with defendants Xiao Yunfei and Xiao Gaowen illegally engaged in the business of publishing, printing, and copying publications, that this severely disrupted market order, that the circumstances are particularly severe, and that the behavior of each constitutes the crime of illegally operating a business and should be punished. Defendant Hu Jinyun provided safekeeping for the illicit funds derived by a third party from criminal activity, and her behavior constitutes the crime of concealing illegally acquired goods. The facts are clear and the evidence is certainly sufficient regarding the Beijing Municipality Haidian District People’s Procuratorate’s charge that defendants Cai Zhuohua, Xiao Yunfei, and Xiao Gaowen committed the crime of illegally operating a business, and its charge that defendant Hu Jinyun committed the crime of concealing illegally acquired goods, and the charged crimes are established. Regarding the defense opinion of defense counsel that the books compiled and printed by Cai Zhouhua and the others were publications for internal use, and not illegal publications, the court believes that through examination and confrontation of the evidence during proceedings, both the substance and procedure of the authentication conclusions drawn by the Beijing Municipal Press and Publication Administration that the books involved in this case are illegal publications was lawful, and their legal support is correct. In accordance with our country’s relevant laws and regulations, books and other publications shall be published by book publishing houses and other publishing work units, and requests by non-publishing work units to print publications that are for internal use must be approved by the provincial level people’s government press and publication office. Cai Zhuohua and the others are neither a publishing work unit, nor did they submit an application to the provincial level people’s government press and publication office, and their compiling and printing of books is therefore considered unlawful in terms of publishing procedures, and the legally recognized authentication conclusions of the Beijing Municipal Press and Publication Administration that the books involved in this case are illegal publications is therefore accepted as valid. This court does not accept the opinion of defense counsel regarding the books involved in this case not being illegal publications. Regarding the defense opinion of Cai Zhuohua’s and others’ defense counsel that subjectivity of the crime of illegal operation of a business requires that the actors have profit seeking as their motive, and that the actions of Cai Zhuohua and the others did not disrupt market order, this court believes that the subjectivity of the crime of illegal operation of a business does not require that the actors have profit seeking as their motive; defendant Cai Zhuohua and the others had already been engaging in illegal publishing activities for several years, and witness Yu Zizhou had also requested relevant publishing formalities from Xiao Gaowen, and Cai Zhuohua and the others clearly understood the illegality and harmfulness to society of their behavior; at the same time, the quantity of illegal publications which were recovered meets the standard for “particularly severe circumstances” set forth in Article 15 of the Supreme People’s Court’s Interpretation Regarding Certain Questions About the Specific Laws to be Used in Adjudicating Criminal Cases of Illegal Publications, and therefore the illegal compilation and printing of books by defendant Cai Zhuohua and the others shall be declared a crime and punished. The related defense opinions of defendant Cai Zhuohua and the others and their defense counsel that the actions of Cai Zhuohua and the others in illegally compiling and publishing books did not have the characteristic of illegal operation of a business is not supported by law, and this court does not accept them as valid. Regarding defendant Hu Jinyun’s defense that she did not know that the 80,000 yuan involved in this case were considered illicit funds and her defense counsel’s related defense opinion, this court believes that the pre-trial statements of defendants Xiao Yunfei and Xiao Gaowen regarding the 80,000 yuan being money earned through the compilation and printing of books and the pre-trial statement of defendant Hu Jinyun that she clearly knew that Xiao Gaowen and others were relying exclusively on the compilation and printing of books to make money, means this is extremely well settled, and furthermore that when Hu Jinyun received the money she already knew that Cai Zhuohua had been captured on suspicion of committing a crime by compiling and printing books, and these facts are sufficient to prove that Hu Jinyun knew the illicit nature of the 80,000 yuan involved in this case, and this court therefore does not accept as valid the foregoing defense opinion of defendant Hu Jinyun and her defense counsel. The defendant Xiao Gaowen assisted public security agencies in capturing the other criminals in this case, which is considered rendering a meritorious service, and this court reduces his sentence in accordance with the law. The circumstances of defendant Hu Jinyun’s crime were minor, and furthermore she assisted public security agencies in capturing the other criminals in this case, which establishes a circumstance of rendering a meritorious service, and this court therefore shall not impose criminal punishment on her in accordance with the law. According to the specific circumstances of the four defendants’ crimes, this court rules as follows with respect to defendants Cai Zhuohua and Xiao Yunfei in accordance with Article 225 paragraph 4, Article 25 clause 1, Article 53, and Article 64 of the Criminal Law of the People’s Republic of China, and Article 8 of the Amended Criminal Law of the People’s Republic of China, and with respect to defendant Xiao Gaowen in accordance with Article 225 paragraph 4, Article 25 clause 1, Article 68 clause 1, Article 53, and Article 64 of the Criminal Law of the People’s Republic of China, and Article 8 of the Amended Criminal Law of the People’s Republic of China, and with respect to defendant Hu Jinyun in accordance with Article 312, Article 68 clause 1, and Article 37 of the Criminal Law of the People’s Republic of China:
1. Defendant Cai Zhuohua committed the crime of illegal operation of a business, and is sentenced to fixed term imprisonment of three years and fined 150,000 yuan. (The sentence to be calculated from the date this judgment is executed. For the detention prior to this judgment’s execution, one day of the detention to be set off against one day of the sentence, which is to say from September 11, 2004 through September 10, 2007. The fine is to be paid within three months of the date following the effectiveness of this judgment.)
2. Defendant Xiao Gaowen committed the crime of illegal operation of a business, and is sentenced to fixed term imprisonment of one year and six months and fined 100,000 yuan. (The sentence to be calculated from the date this judgment is executed. For the detention prior to this judgment’s execution, one day of the detention to be set off against one day of the sentence, which is to say from September 27, 2004 through March 26, 2006. The fine is to be paid within three months of the date following the effectiveness of this judgment.)
3. Defendant Xiao Yunfei committed the crime of illegal operation of a business, and is sentenced to fixed term imprisonment of two years and fined 120,000 yuan. (The sentence to be calculated from the date this judgment is executed. For the detention prior to this judgment’s execution, one day of the detention to be set off against one day of the sentence, which is to say from September 27, 2004 through September 26, 2006. The fine is to be paid within three months of the date following the effectiveness of this judgment.)
4. Defendant Hu Jinyun committed the crime of concealing illegally acquired goods, and no criminal punishment is imposed.
5. The 237,776 volumes of illegal publications and the 80,000 yuan in illicit funds in custody in this case is hereby confiscated.
If [a defendant] does not accept this verdict, [they] may within 10 days of the second day after receiving this verdict bring an appeal through this court or directly to the Beijing Number 1 Intermediate People’s Court. Any written appeal should include one original and four copies of the appeal brief.