Legal Defence in Cases of Suspected Embezzlement in Germany

Embezzlement in Germany is a property offence but is always subsidiary to other offences. This means that embezzlement is only punishable if other offences, such as theft, robbery, or breach of trust, do not make the offence in question punishable with a more severe penalty. Anyone who unlawfully appropriates another person’s movable property for themselves or a third party is liable to prosecution for embezzlement, according to Section 246 (1) of the German Criminal Code (StGB). The object of an embezzlement offence is always the property of another person. In some cases, for example, in the case of communities of heirs, it can be challenging to clarify the legal ownership. However, to determine whether embezzlement has taken place, it is essential to clarify the ownership of the property at the time of the offence, which is why it is always advisable to seek legal advice when accused of such an offence.

The offence of embezzlement consists of someone unlawfully appropriating another person’s property or its value to their property – or that of a third party. In concrete terms, the perpetrator uses the object or its value as if it were their property, although they have no legal claim. In contrast to theft, in which another person’s property is actively taken away, embezzlement does not involve such a taking. Instead, an item already in the perpetrator’s possession – for example, through a loan, a find or work materials made available to employees – continues to be unlawfully retained.

However, this appropriation is not unlawful if there is a due and undisputed claim to the transfer of ownership of the item. Illegality is also ruled out in the case of legal authorisation to utilise the item, e.g., Section 1228 of the German Civil Code, BGB (lien), or Section 371 para. 1 sentence 1 of the German Commercial Code, HGB (commercial right of retention). It is also not embezzlement if it is done with the consent of the owner, or the person authorised to dispose of the property. This is usually the case when goods are sold to a reseller subject to retention of title. Negligent behaviour is also not punishable. In this case, however, civil law claims may exist against the person acting, e.g. the owner’s claim for restitution following Section 985 BGB. It should be noted, however, that the attempt to embezzle is punishable under Section 246 (3) StGB.

Embezzlement in office is also subject to Section 246 StGB. Further provisions tailored explicitly to public officials can be applied to aggravate the offence, meaning that if they are convicted of embezzlement, they face a more severe penalty and more severe professional consequences.

Embezzlement by misappropriation is more severe than simple embezzlement, as the offender embezzles a property entrusted to them and is therefore punished with a higher penalty in Germany. A thing is entrusted to a person if they have been granted control of the thing with the obligation to return it or to use it for a specific purpose in accordance with the entrusted person (BGH, judgement of 13.3.1956 – 2 StR 70/56; judgement of 17.10.1961 – 1 StR 382/61).

For example, an item is entrusted to someone if it is borrowed, rented, or leased. This also includes items placed in safekeeping or purchased under reservation of title. It should be noted here that a thing may also be entrusted if it is handed over for a prohibited or immoral purpose.

In Germany, simple embezzlement is punishable by a prison sentence of up to three years or a fine. In the case of embezzlement by misappropriation, i.e. if the embezzled property was entrusted to the perpetrator, a prison sentence of up to five years or a fine is imposed. The circumstances of the individual case largely determine the specific penalty. In particular, the value of the embezzled property, previous convictions and any restitution are considered. To ensure that the penalty is as low as possible, an experienced German criminal defence lawyer should be consulted as soon as possible to avoid an entry into the criminal record. Such an entry is generally only made in the case of a prison sentence of three months or more and a fine of more than 90 daily rates.

Especially in the case of embezzlement in the workplace, the employer themselves may have no interest in (public) criminal proceedings. An out-of-court settlement with an employment termination agreement usually contains agreements on the repayment of the embezzled money or the return of embezzled items. What cannot be the subject of such an agreement is the withdrawal of the criminal charges. Embezzlement is an official offence in Germany. This means that an offence is prosecuted ex officio. If the embezzlement is committed against a relative, guardian or carer or if the injured party and the perpetrator live together in the same household (Section 247 StGB), a criminal complaint is required for prosecution. A criminal complaint is also needed for the embezzlement of low-value items (Section 248a StGB). The value limit is between 25 and 50 euros in Germany. Criminal proceedings are deemed inadmissible if the offence is time-barred. The limitation period for simple embezzlement is three years (Section 78 para. 3 no. 5 StGB), and the limitation period for embezzlement by misappropriation is five years (Section 78 para. 3 no. 4 StGB).