Misappropriation refers to what is known as a property offence.
A person is culpable of misappropriation if that person wilfully misuses his/her power of attorney to dispose of third-party assets or obliges another person to do so and, as a result, causes the other person to suffer financial loss or material damage.
Misappropriation as a direct perpetrator can thus only be committed by a person who is vested with a power of attorney and wilfully misuses that power.
The act of misappropriation consists of a misuse of legal authority, that is to say an informed violation of the rules imposed on the perpetrator (the person vested with the power of attorney) by the constituent party of that power of attorney (the victim of the crime). For example, these rules may be:
- statutory provisions;
- provisions imposed by the statutes or rules of procedure of a company; or
- specific instructions given for a particular case.
However, this refers only to those internal rules that serve to protect the assets of the beneficial owner (the victim of the crime). Misappropriation does not occur if the only provisions that are violated are those that either serve purely regulatory purposes or else to protect third-party interests (for example of creditors or the public).
The constituent party of a power of attorney must suffer material damage as a result of the wilful misuse of that power of attorney. The perpetrator is thus the person vested with the power of attorney and the victim of the crime is the constituent party of that power of attorney (the person represented).
For example, a managing director would be considered to have misused his/her power of attorney if he/she were to withdraw funds from the company account for his/her own purposes or transfer funds from the company account to another person who has no entitlement to them.
A power of attorney (authorisation) to dispose of third-party assets or oblige another person to do so may have been granted to an individual (the perpetrator) by law, by official order (appointment) or by a legal transaction (e.g. managing director, authorised signatories).
For misappropriation, provision is made for a custodial sentence of up to 6 months or a fine of up to 360 daily rates.
If the offence results in damages of more than 5,000 Euro (previously 3,000 Euro), i.e. damages of 5,001 Euro and above, provision is made for a custodial sentence of up to 3 years. In the case of damages exceeding 300,000 Euro (previously 50,000 Euro), i.e. damages of 300,001 Euro and above, provision is made for a custodial sentence of 1 to 10 years.
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