Fraud crimes in companies

Does a legal entity that has acquired by absorption the assets of a swindled company have the status of harmed in a crime of fraud?

The Sentence of the Supreme Court of Spain no. 6/2022 of January 12, has answered affirmatively to this question and therefore has canceled and annulled the instance resolutions in the same matter, ordering the reinstatement of the proceedings “…immediately prior to the holding of the oral trial…”

The resolution establishes that the banking entity “A” signed a loan agreement with the defendant for an amount of €200,000.00. After the subscription of the aforementioned loan (and the repeated breach with criminal relevance of the accused), the aforementioned bank was merged by absorption with the banking entity “B” “… with extinction of its personality, without liquidation and with block transfer of its patrimony …”

Banking entity “B”, faced with what it considered to be the alleged commission of a crime of fraud, filed a complaint against the acquirer of the loan —our later defendant in this story—. The trial court issued an acquittal based, mainly, on the lack of legitimacy of the banking entity “B” to exercise criminal action as a private accusation (the Public Prosecutor’s Office did not file an accusation). The sentence was confirmed by the court of appeal.

The Supreme Court masterfully resolves the matter by agreeing with the appellant (the bank entity “B”, obviously), by maintaining that although -regarding the typical deception of the scam-, the appellant entity cannot be considered a passive subject of the deceptive conduct, this is not an obstacle so that it can be considered harmed (in their patrimony) by the scam. 

All of this by virtue of the fact that the banking entity “B” would have come to hold the ownership of the assets of the defunct banking entity “A” by absorption: “… the merger of companies [explains the sentence], constitutes a corporate act by virtue of which two or more of them, prior to the dissolution of some (absorption) or all of them (creation of a new company), combine their assets and group their respective partners in a single company.”

 Therefore, the monetarily assessable decrease of this equity directly attributable to the deceptive conduct of which the banking entity “A” was the victim, allows the new asset owner to be considered as harmed for the purposes of the crime of fraud.

The decision makes an interesting simile by stating that “…forensic practice does not spare examples in which the private prosecution is brought by the close relatives of the deceased or by those who, as a result of the criminal offense, without being passive subjects of the same, have had to bear damage to their assets.” 

In the case of fraud, it should be added that, as is known, art. 248.1 of the Criminal Code allows the owner of the property to be a person other than the passive subject of the deception of the fraud, allowing the existence of the so-called triangle scams.