Unfair administration

The crime of disloyal administration is currently regulated in art. 252 of the Criminal Code, which punishes the person who, having powers to administer the assets of others, emanating from the law, entrusted by the authority or assumed by means of a legal business, infringes them by exceeding their exercise, causing damage to the administered assets. The penalty associated with this crime is imprisonment from 6 months to 3 years, but if the amount of the damage caused does not exceed 400 euros, the penalty is a fine of 1 to 3 months.

We are facing a crime that has been subject to numerous and relevant reforms, the last of them in 2015. Before said reform, there was only the crime of corporate fraudulent administration, regulated in art. 295 of the Criminal Code, as a corporate crime, which could only be committed by the administrators of a company. The reform entailed the repeal of Art. 295 and the creation of the current offense of unfair administration in Art. 252, as a crime against assets that protects not only the assets of companies, but any assets that are administered by a person other than their owner.

What are the elements that characterize the crime of unfair administration?

According to the Supreme Court, in STS No. 278/2018 of June 12, this crime is characterized by the following elements:

• That the perpetrator has powers to administer the assets of others, emanating from the law, entrusted by the authority or assumed by means of a legal business. All persons who effectively exercise administrative functions over the assets of others, without the need to have been formally designated as administrators, may be perpetrators of this crime.
• That the author infringes such powers, exceeding the exercise thereof. According to the Courts, it is not necessary that the administrator is empowered to carry out the specific act, but it is sufficient that he acts as administrator and that his action produces effects against third parties.
• That a damage is caused to the administered patrimony.

On this basis, behavior such as that of a spouse who, after separating from his or her partner, uses the money deposited in the joint marital account to purchase a home of his or her own, without the consent of his or her ex-partner, constitutes a crime of unfair administration. This crime is also committed by the administrator of a company who makes several transfers from the accounts of the latter to his private accounts, misappropriating the company’s money.

Misappropriation

The crime of misappropriation is regulated in articles 253 and 254 of the Criminal Code and is committed by the subject who, to the detriment of another, appropriates for himself or for a third party, money, effects, securities or any other movable thing, which he has received in deposit, commission, custody or by virtue of any other title that produces the obligation to return them, or denies having received them. The penalty associated with this crime is imprisonment from 6 months to 3 years, although if the amount of the appropriated amount does not exceed 400 euros, the penalty is reduced to a fine of 1 to 3 months.

What elements characterize the crime of misappropriation?

• The author initially has the legitimate possession over the thing, having received it by virtue of deposit, commission, administration or by any other title that contains a precision of the purpose for which it is delivered and that produces the consequent obligation to deliver or return it.
• The thing must be movable property, so real estate is excluded from this crime.
• The criminal conduct consists of making an act of disposition of such property or denying having received it.
• That, as a consequence of the behavior, a damage is caused to the victim. Thus, the property that is the object of appropriation must have economic value.
• As a subjective element of the type, it is required that the action be fraudulent, i.e., that the perpetrator knows that he has the obligation to return the property and, in spite of this, decides not to do so.

For example, a builder who, having received certain amounts of money from a client to build a house, appropriates the money, instead of using it to carry out the contracted work, commits a crime of misappropriation. This crime is also committed by an insurance agent who, having received certain amounts of money for insurance premiums, does not carry out such operations and keeps the money received.

Residual type

Finally, art. 254 of the Penal Code punishes the cases of appropriation of another’s movable property that do not fall under art. 253 of the Penal Code, previously mentioned. These cases are punished with a lesser penalty: a fine of 3 to 6 months (from 1 to 2 months if the amount of the appropriated thing does not exceed 400 euros). However, in the case of things of artistic, historical, cultural or scientific value, the penalty is imprisonment from 6 months to 2 years.

This type of crime may include the appropriation of lost property or property of unknown owner, as well as the appropriation of property transferred by mistake.

Aggravated modalities applicable to both offenses

The facts are punished with a higher penalty (imprisonment of 1 to 6 years and a fine of 6 to 12 months) when any of the following elements concur:

1. If it is applied to basic necessities, housing or other goods of recognized social utility.
2. When it is committed by abusing the signature of another, or by concealing or rendering useless any process, file or public or official document.
3. If it is applied to property that is part of the artistic, historical, cultural or scientific heritage.
4. If the facts are particularly serious, taking into account the nature of the damage and the economic situation in which the victim is left.
5. When the value of the fraud exceeds 50,000 euros or affects many people.
6. If it is committed by abusing the personal relationship between the victim and the perpetrator or the latter takes advantage of his business credibility.
7. If the perpetrator has been convicted of at least 3 fraud offenses at the time of the offense.

How can we distinguish between the crime of unfair administration and the crime of misappropriation?

The Supreme Court, in its most recent judgments, among many others, STS no. 129/2018 of March 20, has clarified what is the difference between these crimes, given that both punish similar behaviors. According to this recent case law, the differentiating criterion between the crime of misappropriation and that of unfair administration is that, in the crime of misappropriation, the perpetrator disposes of the assets definitively to the detriment of their owner, while the crime of unfair administration occurs when there is an abuse of the assets administered to the detriment of their owner, but without definitive loss of them.

However, some Provincial Courts understand that the real difference between the two crimes lies in the powers that the perpetrator has over the assets in question. If the latter has powers of administration over the assets, that is, if he has certain freedom to manage the assets, provided that he does so for the benefit of the owner, he can only commit the offense of unfair administration, and not that of misappropriation. Thus, the crime of misappropriation is only applicable when the perpetrator disposes of the assets by virtue of a title other than that of administration, for example, if the assets have been delivered to him by virtue of a deposit, which imposes on him the obligation to return them (SAP Madrid, No. 462/2020, of October 5).