Criminal Defence for Workplace and Corporate Misappropriation

Misappropriation in the Company: Legal Framework

Misappropriation in the workplace and corporate sphere rests on Article 253 of the Criminal Code. It punishes the employee, director or partner who appropriates or diverts, for themselves or for a third party, money, funds or assets of the company that they had received in administration, custody or by reason of their position. As criminal defence lawyers specialising in offences against property, at Alonso Sala we defend workers and executives against this type of accusation, common in contexts of internal conflict or accounts review.

The defining feature is that the assets reach the person lawfully: through their post, a power of management or a relationship of trust. There is no initial taking. The offence is completed when those funds or assets, received for one purpose, are diverted to a destination of their own or one unrelated to what was agreed. Hence the importance of delimiting the exact scope of the powers conferred on the employee or director.

Appropriation and Diversion in the Company

The offence covers two forms of conduct. Appropriation in the strict sense consists of permanently incorporating company assets into one's own estate (keeping cash, merchandise or customer payments). Diversion consists of giving the funds a destination other than the intended one, even without permanent enrichment: using company money for private purposes or diverting it from its proper aim. Both forms require that the assets had been received by reason of the position or role performed.

Typical scenarios include the cashier who withholds payments, the salesperson who does not bank what was collected, the director who uses company funds for personal expenses or the partner who disposes of common assets for their exclusive benefit. In many of these cases an accounting expert report is decisive in distinguishing wilful diversion from a mere management irregularity.

Aggravated Offence and Concurrence

The basic penalty refers to Article 249 of the Criminal Code: prison of 6 months to 3 years, depending on the amount and the harm caused. The conduct shifts to the aggravated offence of Article 250 of the Criminal Code —prison of 1 to 6 years and a fine— when the amount appropriated exceeds €50,000, when the act is especially serious, or when there is abuse of personal relationships between victim and perpetrator, a common circumstance within the company given the trust placed in the position.

This figure often appears in concurrence with other offences. It frequently concurs with disloyal administration (Article 252 of the Criminal Code), where the director exceeds their management powers causing harm, and with document forgery, where invoices, receipts or entries are manipulated to conceal the diversion of funds.

Defence Strategy

1. Delimitation of the powers of the position: Establishing that the disposal of the funds fell within the powers of the employee or director.
2. Absence of intent to appropriate: Showing that the use of the funds did not seek to incorporate them permanently into one's own estate.
3. Disputing the amount: Challenging the figure to avoid the shift to the aggravated offence of Art. 250 CP (€50,000 threshold).
4. Employment or commercial nature of the dispute: Maintaining that the disagreement over collections, expenses or settlements belongs to the employment or commercial sphere and not to criminal law.

Stages of the Criminal Proceedings for Misappropriation

Proceedings usually begin with a formal complaint or, more often, with a private prosecution (querella), which allows the harmed company to steer the investigation from the outset and request specific measures. During the investigation phase the court gathers the evidence needed to establish the basis on which the money or assets were received, the use actually made of them and the resulting loss: statements from the complainant and the accused, testimony from those involved in the management, requests for information to banks and, frequently, a forensic accounting report. This phase is decisive, because it determines whether the facts fit Article 253 of the Criminal Code or amount to a purely civil breach.

Once the investigation closes, the procedure follows the path set by the likely sentence: the abbreviated procedure for basic misappropriation and the ordinary procedure only in cases of particular gravity. After the prosecution and defence pleadings, the trial is held, where evidence is examined under the principles of immediacy and adversarial debate, and the presumption of innocence applies. The judgment may be challenged by appeal before the Provincial Court and, where appropriate, by cassation before the Supreme Court. Each stage offers distinct defensive opportunities: challenging the title during the investigation, contesting the expert report at trial, or disputing the legal classification and the amount on appeal.

Documentary Evidence and Forensic Accounting

In these offences the case rests on the documentary trail rather than on oral accounts. Decisive items include the contracts and powers of attorney that define the powers of the employee, director or partner; supporting records of fund movements; bank statements; invoices, receipts and expense notes; accounting entries and reconciliations; and the internal correspondence and emails reflecting instructions and the rendering of accounts. Proving the basis on which the money or assets were received, and comparing it with their actual use, is the core of the evidentiary effort, since only in this way can it be shown that there was appropriation or diversion rather than a debatable exercise of management.

The forensic accounting report is usually the central piece. The expert reconstructs the financial flows, identifies the unjustified outflows, quantifies the loss and, where possible, traces where the funds went. The defence may counter that report with its own expert evidence offering an alternative reading of the entries, exposing methodological gaps, or explaining the disbursements as expenses covered by the employment or corporate relationship, agreed advances or set-offs of debts. The strength or weakness of the expert evidence largely shapes the outcome of the trial and the determination of civil liability.

Limitation Periods by Type of Offence

Limitation is governed by Article 131 of the Criminal Code according to the maximum penalty attached to the offence, and it must be stressed that, following the reform introduced by Organic Law 5/2010, there is NO three-year limitation period. Basic misappropriation under Article 253, punishable by imprisonment of up to three years (plus a fine), is a less serious offence and becomes time-barred after five years. Stating that these facts are time-barred in three years is therefore an error that should be ruled out at once when assessing whether an action is viable.

Where the aggravated type under Article 250 applies, the penalty may reach one to six years of imprisonment; since the maximum exceeds five years, the limitation period rises to ten years. Misappropriation under Article 254.1, punishable only by a fine, remains a less serious offence and is likewise time-barred after five years. The attenuated subtype of Article 253.2, reserved for misappropriations not exceeding 400 euros and punished with a fine of one to three months, is a minor offence and becomes time-barred after one year. As a general rule, time runs from completion, which in this conduct is usually fixed at the moment of definitive disposal of the asset.

From a Civil Dispute to a Criminal Charge

Not every financial disagreement between a company and the person who handled its money amounts to a crime. The line separating a criminal offence from a mere civil dispute requires that there be a title under which the money, assets or securities were received with an obligation to hand them over or return them, and that the person incorporate them into their own estate or give them a definitive destination other than the one agreed, aware that they are acting beyond their powers. A simple debt, a delay in settling accounts, a dispute over an account balance or the interpretation of a contract belong, in principle, to the civil or commercial sphere.

Supreme Court doctrine, without the need to cite any specific ruling, locates the shift into the criminal sphere at what is known as the point of no return: the moment when the holder steps beyond mere possession and definitively disposes of the asset as if it were their own, irreversibly frustrating the possibility of returning it. Temporary use or delay is not enough; an unequivocal act of appropriation or diversion showing the will not to return is required. This distinction is essential to the defence, because it allows matters that the prosecution improperly presents as a crime to be redirected to the civil courts.

Repair of the Damage and the Mitigating Factor of Article 21.5

In property offences, the accused's attitude towards the harm caused has direct legal relevance. Returning the money or repairing the damage before trial may give rise to the mitigating circumstance of Article 21.5 of the Criminal Code, which requires that the repair be effective and take place at any point in the proceedings before the trial hearing is held. Recognition of this factor leads to a reduction of the sentence within the statutory range and, where the repair is especially substantial or accompanied by other circumstances, it may operate as a highly qualified mitigating factor with a broader reduction.

It is important to distinguish repair, which mitigates criminal liability, from restitution, which belongs to the civil liability arising from the offence and requires returning what was misappropriated or its equivalent, together with its proceeds and interest. A well-designed strategy weighs the timing and manner of repair, its documentary proof and its effect both on the sentence and on the possible suspension of its enforcement. Early deposit or return, beyond its mitigating effect, strengthens the negotiating position and can facilitate outcomes that avoid or reduce time in prison.

Plea Agreement, Suspended Sentences and the Boundary with Article 252

When the evidence is unfavourable, a plea agreement (conformidad) may be a sensible route: an agreement with the prosecution allows a reduced sentence and provides certainty about the outcome, avoiding the risks of trial. If the prison sentence finally imposed does not exceed two years, suspension of its enforcement may be sought under Articles 80 and following of the Criminal Code, having regard to the absence of a criminal record and, very importantly in these offences, to the effort made to repair the damage. Satisfying the civil liability is often a condition or a decisive factor for suspension to be granted.

Finally, it is essential to distinguish misappropriation under Article 253 from disloyal administration under Article 252. Misappropriation presupposes the receipt of money, assets or securities under a title that obliges their delivery or return, followed by their appropriation or diversion. Disloyal administration, by contrast, punishes someone who has powers to manage another's estate and, exceeding those powers, harms it; here the person does not receive the assets in order to hand them over, but manages the owner's estate. Determining precisely which of the two types applies affects the applicable penalty and the entire defence strategy, which is why analysing it early is a priority.