The criminal offence of misappropriation (Sec 133 StGB)
The offence of misappropriation is committed by anyone who applies property entrusted to them or a third party with the intention of unlawfully enriching themselves or a third party.
The term “property” includes both movable items with exchange value and immovable items such as scriptural money and other claims. For example, a movable asset is anything entrusted to a company employee for business purposes. This could be a company car entrusted to them, but also, for example, company laptops or smartphones, various tools and machines or goods entrusted to them.
Another characteristic of Sec 133 StGB is that the perpetrator has the sole power of disposal over the entrusted property. However, the use of the property is limited to certain obligations.
The offence of misappropriation is the appropriation of the entrusted property for one’s own use or for a third party. Misappropriation occurs when the perpetrator acts like a legal owner, for example by keeping the property, utilizing it or using it like an owner. The perpetrator’s intent is also of central importance. The perpetrator must seriously consider it possible and accept the possibility of appropriating the entrusted property for themselves or a third party, and must have a broader extended intent to unlawfully enrich themselves.
Relevant examples of misappropriation in practice
Misappropriation (Sec 133 StGB) can take many forms in companies. The following examples may give an indication of how diverse criminal liability for misappropriation can be:
- The managing director of a limited liability company (GmbH), who is entrusted with the management and safekeeping of the company’s assets, commits misappropriation if he appropriates the company’s funds with the intention of enriching himself.
- Another example is the unlawful sale of office equipment such as laptops, printers or smartphones that have been provided to an employee for business purposes.
- Cashiers also typically have sole custody of the cash entrusted to them. If cash is stolen without authorization and without permission, it may constitute misappropriation.
- The misappropriation of entrusted customer funds with the intention of enrichment may also constitute the criminal offence of misappropriation.
Impending penalties and possible disqualification of managing directors
As with most offences in white collar crime, the specific penalty for misappropriation depends on the amount of the occurred financial damage. The basic penalty for misappropriation under Sec 133 para 1 StGB is imprisonment for up to six months or a fine of up to 360 daily rates. If the loss exceeds EUR 5,000, the penalty is imprisonment for up to three years. If the damage amounts to more than EUR 300,000, the penalty is one to ten years’ imprisonment.
In addition to the threat of legal penalties, managing directors and members of the management board also need to be particularly careful from another perspective: In the event of a final conviction of more than six months’ imprisonment for an economic offence such as misappropriation, a managing director or a member of the Management Board may no longer work in this function (Sec 15 para 1a Austrian Act on Limited Liability Companies, Sec 75 para 2a Austrian Stock Corporation Act; so-called “disqualification”).
There may also be consequences under civil law, such as claims for damages. Managing directors and board members are therefore advised to be aware of the limits of their authorities. If managing directors and board members are accused of misappropriation, a criminal investigation can have significant negative consequences, so it is generally advisable to consult a lawyer as soon as possible.
To minimize the risk of white-collar crime due to misappropriation, compliance measures and internal regulations are of crucial importance. By implementing and consistently enforcing clear compliance policies, companies can ensure that their employees adhere to legal regulations and increase compliance awareness within the company. It should be clearly communicated that a clear distinction must be made between company interests on the one hand and private interests on the other when it comes to entrusted powers (such as the authorization to dispose of the company account or use company property). In general, there is no place in business life for private interests or even the tendency to enrich oneself at the expense of the company.
In addition, recording and documenting all assets that are made available to employees and are therefore exposed to potential misappropriation by employees, enables a concrete risk assessment. Larger organizations may want to keep a list of what assets have been made available to which employees and who has what authority to handle company assets.
In addition, employment contracts or written codes of conduct should state that personal use of company equipment requires employer’s approval.
Criminal defense for allegations of misappropriation
Employees and managing directors are sometimes accused of misappropriation. If you are an accused in a criminal investigation for misappropriation and have already received a summons to an interrogation, you should contact a criminal defense lawyer quickly in order to be able to defend your rights effectively and achieve the best possible outcome of the proceedings. In the case of allegations of misappropriation, the following aspects, should be considered:
- A lawyer can assist you in gaining access to files before being interrogated as an accused. The exercise of this right is essential for criminal defense and should be exercised as early as possible and at regular intervals in order to examine the allegations of misappropriation in detail.
- Some allegations of misappropriation are made imprecisely, and not every criminal accusation actually constitutes a punishable act of misappropriation within the meaning of the misappropriation offence in accordance with Sec 133 StGB. For example, mere retention in breach of contract without corresponding use is not a sufficient act of misappropriation. According to the case law of the Austrian Supreme Court, the offence of misappropriation (Sec 133 StGB) “in no way has the task of penalizing breaches of contract as such“. A lawyer can help you make the necessary distinctions and present the necessary arguments in the correct form in the proceedings on your behalf.
- If someone has a “present coverage fund”, i.e. believes that they are willing and able to pay compensation, and compensates the damage at the earliest possible time, the required intent to enrich is not fulfilled and the offence of misappropriation is not fulfilled. This aspect must also be considered in the course of criminal defense.
Damaged by misappropriation? How to enforce your claims
If you or your company has been harmed by misappropriation, you should first consider conducting an internal investigation of the incidents in order to be able to take the necessary legal steps based on the results.
It is then possible to report the matter to the police and join the criminal proceedings to claim damages as a private party. At the same time, it is also possible to assert civil law claims by bringing an action before the competent civil court. The most appropriate course of action will depend on the individual facts of the case.
