Social Security and Subsidy Fraud
Criminal defense in the offense of defrauding the Social Security (Art. 307 CP) and in subsidy and public aid fraud (Art. 308 CP): quantitative thresholds, regularization and repayment.
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What Social Security Fraud Is
Article 307 of the Criminal Code punishes anyone who, by action or omission, defrauds the Social Security by evading the payment of contributions and joint collection items, unduly obtaining refunds or enjoying undue deductions, provided the amount defrauded exceeds 50,000 euros. The penalty is one to five years in prison and a fine of one to six times that amount. The provision also contemplates an aggravated type (Art. 307 bis) and a specific type for the fraudulent obtaining of Social Security system benefits (Art. 307 ter).
The mere filing of contribution documents does not exclude the fraud when it is proven by other facts. Alongside the penalty, the loss of the possibility of obtaining subsidies or public aid and of enjoying tax or Social Security benefits or incentives is imposed.
Subsidy and Public Aid Fraud
Article 308 of the Criminal Code punishes anyone who obtains subsidies or aid from Public Administrations, including the European Union, for an amount exceeding 100,000 euros, by falsifying the conditions required for their grant or concealing those that would have prevented it. The same penalty applies to anyone who, in an activity funded with public funds, applies them, for an amount exceeding 100,000 euros, to purposes other than those for which the aid was granted. The penalty is one to five years in prison and a fine of one to six times the amount. The management of European funds has increased the relevance of this figure.
The Thresholds: 50,000 and 100,000 Euros
The amount is decisive. The offense of defrauding the Social Security requires exceeding 50,000 euros; subsidy fraud, 100,000 euros. Below those thresholds, the conduct does not constitute a crime but an administrative offense punished through the corresponding channel. Determining the exact amount is therefore one of the central grounds of the defense, and usually requires expert evidence. The aggravated type of Art. 307 bis is reserved for cases of especially high amounts or of particular gravity due to the manner of commission.
Regularization and Repayment
Both Article 307 and Article 308 provide for an exemption: full regularization of the situation before the Social Security and repayment of the subsidy exclude criminal liability, provided they are carried out in good time —that is, before the obligated party becomes aware of the start of verification or investigation actions and, failing that, before a complaint or indictment is filed or the Public Prosecutor or the judge take action. Assessing whether regularization or repayment are still possible is one of the defense's first decisions.
Defense Strategy
The defense is built on several axes. Quantification expert evidence, to dispute whether the threshold that turns the conduct into a crime is actually exceeded. The analysis of intent, because a reasonable interpretive discrepancy or an error is not equivalent to fraudulent intent. The assessment of regularization or repayment while they are still possible. And coordination with the administrative procedure of the General Treasury of the Social Security or of the body granting the subsidy.
Penalty Chart
| Type / Scenario | Criminal Penalty |
|---|---|
| Social Security fraud (Art. 307 CP) | One to five years in prison and a fine of one to six times the amount, when what is defrauded exceeds 50,000 euros. |
| Subsidy fraud (Art. 308 CP) | One to five years in prison and a fine of one to six times the amount, when the subsidy or aid exceeds 100,000 euros. |
| Loss of aid and benefits | Loss of the possibility of obtaining subsidies or public aid and of enjoying tax or Social Security benefits and incentives. |
* Penalties shown are indicative. The actual penalty depends on case circumstances, applicable mitigating and aggravating factors.
Our Defense Strategy
Amount expert evidence
We provide an expert report disputing the amount and whether the typified threshold is exceeded.
Timely regularization or repayment
We assess and, where appropriate, articulate regularization or repayment while they are still possible.
Evidence of the absence of intent
We document the error or interpretive discrepancy that excludes fraudulent intent.
Coordination with the inspection
We articulate the criminal defense with the procedure of the General Treasury or the granting body.
Economic Criminal Law in Spain: Tax Fraud, Money Laundering and Corporate Crimes
Economic criminal law encompasses the most severe financial penalties in the Spanish Criminal Code. Tax fraud over €120,000 (Art. 305 CP), money laundering (Art. 301 CP), and corporate crimes (Art. 290-297 CP) are complex offenses where defense requires a combination of criminal law expertise and deep accounting/financial knowledge.
Penalty Comparison: Economic Offenses
| Offense | Threshold | Penalty |
|---|---|---|
| Tax Fraud (Art. 305) | >€120,000 | 1 – 5 years + fine x6 |
| Aggravated Tax Fraud | >€600,000 | 2 – 6 years |
| Money Laundering (Art. 301) | Any amount | 6 months – 6 years |
| Aggravated Laundering | Organized/financial system | Up to 9 years |
| Corporate Crime (Art. 290) | Balance sheet falsification | 1 – 3 years |
| Punishable Insolvency (Art. 259) | Fraudulent bankruptcy | 1 – 4 years |
Key Defense Strategies
Tax Regularization Defense (Art. 305.4 CP)
Pay the full tax debt before charges are formally filed and the crime is extinguished. This is the most powerful complete defense in tax fraud cases.
Challenge the €120K Threshold
The tax authority's calculation method is often contestable. Independent forensic accounting can challenge the assessed figure below the criminal threshold.
Money Laundering 'Self-laundering' Issues
Spanish courts have debated whether the primary offender can also be convicted of laundering their own proceeds. Challenge the double jeopardy implications.
Corporate Crime: Harm to Company vs. Shareholders
Art. 295 corporate crimes require actual financial harm to the company or its members. Demonstrate that any loss was speculative or absent.
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