Facts

# Bankruptcy as an Objective Condition of Criminal Liability for Misconduct **Parties:** Defendant X. and Federal Prosecutor **Court:** Federal Criminal Court **Date:** January 11, 2018 **Main Charges:** Commercial fraud, aggravated embezzlement, multiple misconduct, money laundering **Facts:** Between February 2006 and April 2008, X. is alleged to have deceived approximately 500 investors by pretending to manage CO invest their capital in their interest. Instead, X. diverted the capital for his own benefit and for the benefit of close third parties, causing a damage of approximately EUR 22.8 million. Approximately EUR 12.7 million was laundered in a qualified manner. As a responsible body CO managing director of E. SA, F. EF, and F. GmbH, X. is alleged to have taken actions that led to CO worsened the over-indebtedness of these companies. **Judgment of the Federal Criminal Court:** The proceedings against X. regarding the charge of money laundering were discontinued. X. was found guilty of commercial fraud, aggravated embezzlement, and multiple misconduct and was sentenced to a term of imprisonment of 50 months. Additionally, X. was ordered to pay certain private plaintiffs the amounts listed in the judgment. **Appeal:** X. requested the annulment of the convictions, the civil claims, and the decisions on costs. The conviction for misconduct under Art. 165 SCC. 1 SCC requires that the over-indebtedness CO insolvency of the debtor was caused CO aggravated by misconduct and that bankruptcy proceedings were opened against him CO a certificate of loss was issued. The opening of bankruptcy proceedings is an objective condition of criminal liability. Negligent professional conduct exists when legal provisions of corporate governance are disregarded, such as the neglect of accounting CO the breach of the duty of the board of directors to notify the court in case of over-indebtedness. Reckless granting of credit exists when credit is granted without sufficient examination of the purpose of the credit and the creditworthiness as well as without corresponding collateral. Only gross economic misconduct is punishable, not the assumption of risks inherent in any business activity. The subjective elements of the offense require intent with regard to the bankruptcy act; with regard to the loss of assets, gross…