Criminal defense in cases under §§ 263, 264, 264a, 265b and 266 of the German Criminal Code
Fraud and embezzlement are among the classic property offenses under the German Criminal Code and also among the most frequent charges in white-collar crime. The underlying facts often involve business decisions and frequently touch upon tax and corporate law issues. Anyone facing such charges therefore needs a defense that understands both economic contexts and criminal law itself.
At Galen Attorneys at Law, we defend clients in Berlin and throughout Germany at all stages of criminal proceedings. With expertise in both criminal law and economics, we examine the case file and develop a defense strategy that considers both your personal risks as an accused or defendant and the risks to your company.
When does fraud occur according to § 263 of the German Criminal Code (StGB)?
Fraud under Section 263 of the German Criminal Code (StGB) occurs when someone intentionally deceives another person about facts, causing that person to make a financial transaction based on that error, and thereby resulting in financial loss. In addition, there must be the intent to obtain an unlawful financial advantage for oneself or a third party.
Deception within the meaning of Section 263 of the German Criminal Code (StGB) is any act that has a declaratory value regarding facts and is capable of causing an error in another person. Mere value judgments or expressions of opinion are generally insufficient. An error exists if the deceived person develops an inaccurate perception as a result of the deception, or if an existing misconception is confirmed or reinforced. The financial loss is determined by comparing the financial situation before and after the disposition of assets.
Whether a statement constitutes a criminal deception or a permissible prediction, whether an error actually occurred, what counts as assets, and whether quantifiable damage has occurred – these questions are regularly the subject of intensive legal debate in criminal proceedings.
What other fraud-like offenses exist in economic criminal law?
Sections 263a et seq. of the German Criminal Code (StGB) contain further offenses similar to fraud. Particularly relevant in economic criminal law are:
Computer fraud (§ 263a StGB)
Deception within the meaning of Section 263 of the German Criminal Code (StGB) can only be committed against a natural person. Therefore, the offense does not apply if it is not a person but a data processing operation that is influenced – for example, in the case of manipulated bank transfers or the misuse of access data. Computer fraud under Section 263a of the German Criminal Code closes this gap. Whether criminal manipulation has occurred depends largely on the technical processes of the data processing in each individual case.
Subsidy fraud (§ 264 StGB)
The offense of subsidy fraud under Section 264 of the German Criminal Code (StGB) covers incorrect, incomplete, or unlawfully omitted information regarding facts relevant to subsidies to granting authorities, as well as the misuse of subsidies. Facts relevant to subsidies are those expressly designated as such by the subsidy provider through or pursuant to a law, and those upon which a subsidy or subsidy benefit is legally or contractually dependent. Furthermore, the perpetrator must generally act intentionally; however, in certain circumstances, negligent conduct is also punishable (paragraph 5).
Investment fraud (§ 264a StGB)
According to Section 264a of the German Criminal Code (StGB), anyone who, in connection with certain investment transactions, makes false and advantageous statements to a larger group of people or conceals adverse facts that are significant for the decision to acquire or increase the investment is guilty of investment fraud. False and advantageous statements or the concealment of adverse facts in advertising materials such as prospectuses, presentations, and summaries of financial circumstances can be punishable. Here, too, only intentional conduct is punishable. It is not necessary to prove deception, error, or financial loss to the detriment of a specific person.
Credit fraud (§ 265b StGB)
The criminalization of loan fraud under Section 265b of the German Criminal Code (StGB) serves to protect lenders against the fraudulent obtaining of capital. Anyone who submits incomplete or incorrect documents or written statements to a lender, or fails to disclose a deterioration in their financial situation if this is significant for the loan decision, is liable to prosecution. Actual financial loss to the lender is not required for criminal liability. Only intentional acts are punishable; negligent misrepresentations are not.
When does breach of trust occur according to § 266 of the German Criminal Code?
According to Section 266 Paragraph 1 of the German Criminal Code (StGB), breach of trust is committed by anyone who unlawfully violates a duty to manage assets and thereby causes financial harm to the person whose assets were to be managed. The specific meaning of each element of this offense is defined—as with almost no other crime—by extensive case law on numerous individual cases.
The existence, scope, and content of a duty to manage assets can arise from law, contract, or official mandate. For this duty to be effective, it must be a fundamental obligation of the legal relationship; that is, the proper exercise of the authority must be specifically aimed at protecting the assets under management. Furthermore, the person obligated must have a degree of independent discretion in decision-making. This is typically the case for managing directors or board members. Whether a duty to manage assets exists is frequently the central point of contention in criminal proceedings for breach of trust.
If a duty to manage assets exists, a breach must be established. What constitutes a breach of duty and what constitutes compliant conduct depends on the terms of the underlying legal relationship—for example, on specific civil and societal requirements. The question often arises: Where does permissible entrepreneurial risk end? Criminal liability, for instance, only arises when the limits of granted discretion have been exceeded.
The essential difference to Section 263 of the German Criminal Code lies in the relationship between the perpetrator and the victim. While fraud does not require a special relationship with the victim, breach of trust involves a relationship in which a duty to protect the victim's financial interests, entrusted to them by the perpetrator, exists and is violated.
Following Section 266 of the German Criminal Code (StGB), the legislature has established special offenses similar to breach of trust. Section 266a StGB is particularly relevant in economic criminal law: withholding and misappropriating wages. More information on this offense can be found here.
What are the typical procedures for investigations into fraud and embezzlement?
Investigations into fraud or embezzlement are often initiated by criminal complaints from business partners or investors. Whistleblowers, internal compliance investigations, or a tip from the insolvency administrator can also be the starting point.
Typical investigative measures include:
- Searches of business and private premises pursuant to Sections 102 and 103 of the Code of Criminal Procedure
- Securing digital data, business documents and email communication
- Asset seizure pursuant to Section 111e of the Code of Criminal Procedure to secure subsequent confiscation
- Account inquiries
What penalty is imposed if convicted?
Fraud (§ 263 of the German Criminal Code), computer fraud (§ 263a of the German Criminal Code), subsidy fraud (§ 264 of the German Criminal Code), and breach of trust (§ 266 of the German Criminal Code) are punishable by a fine or imprisonment of up to five years; in particularly serious cases, up to ten years. A particularly serious case may exist, for example, if the offense was committed on a commercial basis or as a member of a gang that has conspired to repeatedly commit such offenses. Investment fraud (§ 264a of the German Criminal Code) and loan fraud (§ 265b of the German Criminal Code) are punishable by a fine or imprisonment of up to three years.
In addition to the actual prison sentence or fine, economic criminal law threatens significant ancillary consequences that are often more serious economically than the sentence itself:
- Confiscation and seizure of assets pursuant to Sections 73 et seq. of the German Criminal Code (StGB) and Section 111e of the German Code of Criminal Procedure (StPO).
- Professional ban according to § 70 StGB
- Incapacity (exclusion of management) according to § 6 GmbHG
- Corporate fines under the Administrative Offenses Act
- Claims for damages by the injured party in civil proceedings
- Corporate liability of board members
Under German law, companies, unlike their members, are not criminally liable themselves, but can be subject to fines, confiscation, and asset seizure.
The confiscation of assets under Sections 73 et seq. of the German Criminal Code (StGB) is of particular importance in white-collar crime. This allows for the confiscation, in addition to the criminal sentence, of economic benefits obtained through or in connection with a criminal offense. Under certain conditions, assets can be secured by seizure as early as the preliminary investigation. Confiscation and asset seizure often have a more severe impact on defendants and companies than the actual criminal sentence.
Criminal defense in cases of fraud and embezzlement – Galen Lawyers
As a law firm specializing in white-collar crime, we at Galen Rechtsanwälte defend clients nationwide in criminal proceedings for fraud and breach of trust.
Early legal action is crucial: it allows you to develop procedural strategies and actively protect your rights before the evidence becomes entrenched. Statements made are very difficult to correct. Therefore, if you receive a summons or your premises are searched, you should initially refrain from making any statements about the matter and seek legal advice immediately.
Our lawyers will accompany you through all stages of the proceedings: during searches and interrogations, in the preliminary investigation and main proceedings, as well as in appeals. Based on a careful analysis of the investigation file, we first assess the charges brought by the public prosecutor's office and then work with you to develop a defense strategy tailored to your specific case and your interests.
Please contact us to arrange an appointment.
Deception is any action that conveys information about facts and is likely to cause another person to be mistaken. Mere value judgments or expressions of opinion are generally insufficient. Distinguishing between the two is difficult in practice, particularly with regard to economic forecasts and promises of returns.
Fraud (§ 263 of the German Criminal Code), computer fraud (§ 263a of the German Criminal Code), subsidy fraud (§ 264 of the German Criminal Code), and breach of trust (§ 266 of the German Criminal Code) are punishable by a fine or imprisonment for up to five years; in particularly serious cases, up to ten years. Investment fraud (§ 264a of the German Criminal Code) and loan fraud (§ 265b of the German Criminal Code) are punishable by a fine or imprisonment for up to three years.
A duty to manage assets exists when someone is responsible for and substantially manages the financial interests of others – for example, managing directors or board members are responsible for the company's financial interests. The scope and content of this duty to manage assets are determined by law, contract, or official mandate.
No. Section 264a of the German Criminal Code (StGB) is an abstract endangerment offense. It is sufficient that incorrect information was made in advertising materials that is significant for the investment decision. Deception, error, or damage to a specific person is not required.
No. Among other things, it is required that the information provided was material to the credit decision and was made intentionally. Negligent misrepresentations are not punishable under Section 265b of the German Criminal Code.
Facts relevant to subsidies are those which have been expressly designated as such by the subsidy provider through or on the basis of a law, as well as those facts on which the approval, granting, recovery, continued endangerment or retention of a subsidy or subsidy benefit is legally dependent.
The confiscation of assets under Sections 73 et seq. of the German Criminal Code (StGB) allows for the seizure, in addition to the criminal sentence, of economic benefits obtained through or in connection with a criminal offense. Assets can be secured by seizure as early as the preliminary investigation. The economic consequences of these measures represent a significant burden and, in some cases, are more severe than the actual sentence itself. Businesses or third parties can also be affected by confiscation.
As soon as you become aware of an investigation – through a hearing, a summons, or a search – you should seek legal advice immediately. Early legal representation allows for the development of procedural strategies that actively work towards a resolution in your favor. In particular, you should not make any statements without consulting a lawyer, as statements made are very difficult to correct.