Allegation of Fraud

What is the Correct Way to Handle Fraud Allegations?

Have you received a criminal complaint or a police summons for fraud pursuant to Section 263 of the German Criminal Code (StGB) and are unsure how to proceed?

First and foremost: stay calm, do not make any statements to the police, and remain silent – as this is your right as a defendant in a fraud investigation.

Fraud – When are the Elements of Section 263 StGB Met?

Fraud pursuant to Section 263 (1) StGB objectively exists when deception by the perpetrator leads to an error by the victim, which then triggers a disposition of assets, which in turn results in financial loss. Subjectively, the perpetrator must have acted intentionally and with the intent to unlawfully enrich themselves or a third party.

Special Cases & Specific Fraud Offenses

Fraud under Section 263 StGB often occurs in the following special cases:

• • Contractual Fraud (Eingehungsbetrug): This refers to a situation where a debtor deceives a creditor into believing they intend to pay for purchased goods, even though they are neither willing nor able to pay at the time of purchase. This occurs increasingly in purchases via eBay Classifieds, mail-order retailers, or when ordering food.
  • Employment Fraud: In the case of employment fraud, the perpetrator obtains employment in the public service by providing false information. Frequently, the perpetrator deceives regarding qualifications, degrees, or personal circumstances.
  • Social Benefit Fraud (colloquially “Hartz IV fraud”): A criminal act of fraud in the form of social benefit fraud may exist if relevant information is withheld from social welfare offices (such as the Jobcenter or BAföG offices) and benefits, such as Unemployment Benefit 1, Citizen’s Allowance (Bürgergeld), or housing benefit, are obtained surreptitiously.
  • Insurance Fraud: Anyone who asserts a non-existent claim for insurance benefits against their insurance company is liable for insurance fraud. This is the case, for example, if an item is reported stolen even though it is still in the policyholder’s possession, or if the policyholder intentionally involves their vehicle in a collision to settle a fictitious claim based on an expert’s report.

Furthermore, the following specific offenses of fraud exist:

Computer fraud pursuant to Section 263a StGB, subsidy fraud pursuant to Section 264 StGB, investment fraud pursuant to Section 264a StGB, insurance abuse pursuant to Section 265 StGB, credit fraud pursuant to Section 265b StGB, obtaining services by deception pursuant to Section 265a StGB, and sports betting fraud pursuant to Section 265c StGB.

What Penalty Can I Expect in the Event of a Conviction?

The threatened penalty for fraud ranges from a fine to five years’ imprisonment. In particularly serious cases of fraud pursuant to Section 263 (3) StGB, the potential sentence even extends to imprisonment between six months and ten years.

The amount of the fine or sentence in an individual case depends in particular on the extent of the financial loss incurred as well as any (relevant) prior convictions of the perpetrator.

In addition, there is the risk of an entry in the certificate of good conduct. Generally, a conviction of up to and including 90 daily rates (Tagessätze) does not have to be listed, provided it is a first-time conviction. Since many employers require the submission of a certificate of good conduct, the defense must also take this aspect into account and, ideally, prevent an entry in the record.

Legal Advice – When Do I Need a Criminal Defense Lawyer?

To keep the penalty as low as possible or even to avoid a conviction altogether, the assistance of a specialist is indispensable if you are a defendant in criminal proceedings for fraud.

The criminal offense of fraud is highly complex and, because even experienced lawyers make mistakes in this area, it offers many points of departure for a successful defense.

You should therefore contact a lawyer specializing in criminal law at the latest when you have received a summons as a defendant. They can advise you on a possible defense strategy and, ideally, achieve a dismissal of the proceedings so that you do not have to answer in a court hearing.

The law firm Mügge, Dr. Pitschel & Partner advises and defends with years of experience in numerous proceedings in the field of fraud offenses. We would be pleased to examine for you whether a dismissal of the proceedings is an option in your case and could be achieved through targeted legal advice and criminal defense.

Fraud in White-Collar Criminal Law and Corporate Criminal Law

If you are an entrepreneur or managing director of a company and are accused of committing fraud, you should react with particular sensitivity to this suspicion and any potential preliminary investigation.

Allegations are often raised when entrepreneurs have made use of public funds (subsidies), tax relief, or loans and are alleged to have provided false or incomplete information in their application, or when the funds obtained are alleged to have been used for other purposes.