Misappropriation of Company Money: Criminal Defence
In this article
Key Takeaways
- Penalty: 1 to 6 years in prison
- Difference from theft and unfaithful management
- Key: prior lawful possession
- Restitution = mitigating factor
Misappropriation, known in English as embezzlement (Article 253 of the Criminal Code), punishes anyone who, having lawfully received money, instruments or any movable thing, keeps it or puts it to a use other than the one agreed. If the amount exceeds €400 it is a less serious offence, carrying 1 to 6 years in prison and a fine; below €400 it is a minor offence punishable by a fine. The key that distinguishes it from theft is the prior lawful possession: in misappropriation something is handed to you and you do not return it. Anyone accused of diverting company funds should consult an embezzlement lawyer before making any statement.
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Misappropriation is one of the most frequent property offences in the business sphere. It occurs where someone lawfully receives a movable thing (money, documents, goods) and then keeps it, denies holding it, or puts it to a use other than the one agreed. As criminal lawyers experienced in misappropriation — what an embezzlement lawyer handles under Spanish law — we explain everything you need to know.
What Is Misappropriation?
Governed by Article 253 of the Criminal Code, misappropriation punishes anyone who, having lawfully received money, instruments, securities or any movable thing, incorporates them into their own assets or puts them to purposes other than those agreed. The penalty varies according to the amount:
- Amount over €400: 1 to 6 years in prison and a fine (less serious offence).
- Amount under €400: a fine of 1 to 3 months (minor offence).
- Aggravated: if it exceeds €50,000 or affects essential goods, the penalties rise significantly.
The Difference from Theft and Unfaithful Management
The key lies in the prior lawful possession:
- Theft: you take something you did NOT hold. You take money from the till without permission.
- Misappropriation: something is handed to you lawfully and you do NOT return it. You are given money to buy materials and you spend it.
- Unfaithful management: you manage the assets of another with administrative powers and carry out harmful acts. You are the company's director and you divert funds.
The Most Frequent Cases
The situations we see most often in the firm are:
- An employee who withholds company funds: an accountant who diverts small amounts over months.
- An agent who does not hand over money collected: a salesperson who collects from clients and does not pay it into the company.
- A depositary who does not return: you are lent an item and you do not give it back.
- An agent who exceeds the mandate: you are given authority to sell a property and you keep part of the price.
Defence Strategies
In our experience, the most effective lines of defence are:
- Denying the subjective element: proving there was no intention to keep the money (an accounting error, confusion of accounts).
- Lawful title: evidencing that there was a right to retain (set-off of debts, a right of retention).
- Reclassification: redirecting the offence to a less serious one (minor theft, a purely civil matter).
- Early restitution: returning what was misappropriated before trial to obtain the mitigating factor of making good the harm.
Accused of Misappropriation?
The difference between a prison sentence and an acquittal can lie in the legal classification of the act. Our criminal lawyers will analyse whether the facts really constitute this offence.
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Frequently asked questions
What is the offence of misappropriation under Article 253 CP?
It punishes someone who, having lawfully received money, instruments or any movable thing, keeps it or puts it to a use other than the one agreed — the key distinguishing feature is that possession began lawfully, unlike theft.
How is misappropriation different from theft?
In theft, the item is taken without ever having been lawfully held by the offender; in misappropriation, the item is lawfully handed over — for example, money given to buy materials — and the offender then keeps it or diverts it to a different use.
How is misappropriation different from unfaithful management?
Unfaithful management involves someone with administrative powers over another's assets carrying out harmful management decisions (such as a company director diverting funds through their managerial authority), while misappropriation involves simply failing to return or properly use a specific item or sum lawfully received.
What penalty does misappropriation carry?
Where the amount exceeds €400, it is a less serious offence carrying 1 to 6 years in prison and a fine; below €400 it is a minor offence punished only with a fine, and penalties rise significantly where the amount exceeds €50,000 or affects essential goods.
What are the most common misappropriation scenarios in a business?
An employee who diverts small amounts of company funds over time, a sales agent who collects payment from clients but does not remit it to the company, someone who fails to return a lent item, or an agent who exceeds their mandate and keeps part of a sale price.
Can returning the money before trial help my defence?
Yes — early restitution of the misappropriated funds before trial can support the mitigating circumstance of making good the harm caused, which can meaningfully reduce the eventual penalty.
When should I hire an embezzlement lawyer?
As soon as you become aware of an internal investigation, an audit discrepancy or a court summons, since an embezzlement lawyer can assess whether the facts amount to misappropriation, unfaithful management or a purely accounting error, and can arrange early restitution before trial if that is advisable.
Do you need criminal defense in this area?
We are criminal defense lawyers specializing in misappropriation. We act urgently to protect your rights.