Case Analysis of Financial Fraud Based on CRIME Theory

Taking Tongjitang as an example

Abstract

In today's diversified era, China's economy is developing at a high speed, but it has also triggered people's concern about financial fraud. The constant emergence of financial counterfeiting incidents as well as endless counterfeiting methods have brought serious impacts to the society. The difficulty of recognizing fraudulent means is increasing, and we urgently need to find new ways to solve this urgent problem. Financial counterfeiters have no fear, wantonly for the wrong, completely disregard for the laws of the economic market, serious damage to the legitimate rights and interests of investors. Taking Tongjitang's inflated revenue of 21.1 billion yuan as an example, they have been carrying out financial fraud for four consecutive years, resulting in a huge amount and far-reaching impact. This paper will firstly review the case of Tongjitang's falsification, then analyze the financial falsification based on CRIME five-factor theory, and finally put forward corresponding suggestions and measures for their falsification means. Through the research and discussion in this paper, we hope to improve the understanding of financial counterfeiting, strengthen the ability to prevent and combat financial counterfeiting, further protect the legitimate rights and interests of investors, and maintain the stability and healthy development of the economic market.