Fire cannot be wrapped with a piece of paper  is Chinese slang, which means the truth can’t be covered up by illegal ways 

For an instance, I planned to do a thing that is illegal or  on the edge of the legal side, meanwhile, my friend knew it and tried to persuade me to give up, his reason is simple, you would  get caught eventually because the fire cannot be wrapped with a piece of paper

 The thing that I planned to do is the piece of paper and the truth is the fire.

you can imagine it easily, the paper will be burnt to ashes.