German Fraud Law

The offence of fraud is regulated in Section 263 of the German Criminal Code (StGB). According to this, fraud is committed by anyone intending to obtain an unlawful pecuniary advantage for themself or a third party damages the assets of another person by creating or maintaining an error by false pretences or by distorting or suppressing facts. The penalty for simple fraud ranges from a fine to five years imprisonment. Severe fraud cases can even be punished with up to ten years’ imprisonment.

Furthermore, an attempt to commit fraud is also punishable (Section 263 (2) StGB). For these reasons, a corresponding criminal charge should not be taken lightly. If you find yourself facing an accusation of fraud, you should immediately consult an experienced criminal defence lawyer.

As mentioned, fraud is a complex offence that imposes some explicit and unwritten requirements. In simple terms, the offence requires the following characteristics:

• a deception about facts (actively or by omission),
• an error of another based on it,
• a disposition of property by the person making the error,
• a pecuniary loss due to this pecuniary disposition,
• intent and intention to enrich.

In addition to simple fraud, paragraph 3 of the penal provision lists various characteristics which regularly lead to the assumption of fraud in a severe case. These are standard examples that increase the range of punishment to up to ten years imprisonment. The fulfilment of one or more of these characteristics has an aggravating effect on the sentence.

However, it is essential to know that these are not actual elements of the offence but merely rules for assessing punishment. This means that if such a characteristic is fulfilled, it regularly indicates the existence of a severe case. However, such a case can also be rejected despite the existence of the characteristic.

The concrete circumstances of the individual case can stand in the way of the assumption of a severe case. In practice, the most relevant examples are those of commercial fraud or gang membership (no. 1), loss of assets of great extent (no. 2) and faking an insured event (no. 5). Furthermore, it should be noted that this list is not exhaustive so that unnamed severe cases can also be assumed.

In addition, Section 263a StGB standardises a particular offence for computer fraud. This is not about deceiving a person but about influencing a data processing result.

An accusation of fraud can be very damaging for the accused. Fraud is an official offence which can be prosecuted officially even if the injured party withdraws the criminal complaint.

For the accused, severe damage to reputation often results in financial losses and private and professional disadvantages. This applies to companies whose image has a decisive influence on customer confidence.

Accused persons who receive a police summons should always be aware that their behaviour is decisive for the further course of the investigation from the very beginning. You have the right to remain silent, which you should use. You may incriminate yourself during the interrogation without competent legal advice and good preparation. Such a statement is difficult to correct later, even by an experienced lawyer.

Our lawyers will examine the facts and evidence for you to develop a suitable defence strategy. It is often possible to resolve the matter out of court. An out-of-court solution can avoid time-consuming, expensive court proceedings and negative reporting. Which approach is most appropriate in your case depends on the circumstances of the individual case. Our criminal defence lawyers will develop an effective and targeted strategy based on available information. Depending on the initial situation, this may mean avoiding a criminal conviction or seeking a lenient sentence.

The German criminal defence lawyers of Schlun & Elseven Rechtsanwälte have extensive experience in defence – regardless of the type of fraud in question (computer fraud, embezzlement, subsidy fraud, insurance fraud or such legally complex forms of economic fraud as capital investment, bank, or tax fraud). Our legal team will advise you on how to respond to measures such as asset freezes, extradition orders, and asset seizure requests not to jeopardise your legal position.

On the one hand, entrepreneurs are particularly vulnerable to criminal fraud accusations. On the other hand, in contrast to private individuals, they are increasingly exposed to the danger of unconscious deception. This can initially lead to an accusation of fraud despite the lack of intent. Of particular importance in this context are subsidy and loan fraud. Criminal proceedings could be initiated if the entrepreneur makes false or incomplete statements or uses the funds obtained for purposes other than those stated.

In addition to the increased risk of being prosecuted for fraud, businesses may be particularly at risk of being harmed by fraudsters. As a preventive measure, our lawyers will be happy to advise you on detecting and preventing fraud schemes such as “CEO Fraud”. We provide in-house coaching and regular training to raise awareness of typical fraud schemes and advise business leaders on the potential risk of information they make available online and the implementation of effective internal mechanisms required to detect such fraud.

The best way to prevent fraud is to ensure that a company’s employees and management immediately know its signs and what action to take in such a case. However, if fraud does occur in your business, it is essential to remain calm. Our lawyers will advise your business on securing crucial information and evidence that can prove especially useful in exposing fraudsters. Our team will provide a clear overview of your legal options and the measures to be taken immediately.