Introduction

When you are accused of claiming unemployment benefits to which you are not entitled, the first reaction is often a lack of understanding. Usually, the Federal Employment Agency (Bundesagentur für Arbeit) has already demanded repayment of overpaid amounts in the course of a cancellation notice and a subsequent recovery notice. The accused believe that the matter is then already resolved. However, this is not the case: the Federal Employment Agencies are required to immediately pass on suspicions of benefit fraud for investigation to the Main Customs Office (Hauptzollamt), which is basically the police when suspicions in regards of unemployment benefits and fraud arise. Thus, the accused suddenly receive mail from the main customs office and find themselves embroiled in a criminal investigation on suspicion of fraud. 

This article is intended to provide an overview of what is meant by benefit fraud, what the legal basis is, and how to act if a hearing form is sent.

What is fraud for unemployment benefits?

Benefit fraud is a special form of fraud under Section 263 of the Criminal Code. In the context of social benefits – in particular when receiving unemployment benefit or benefits from the job center (Jobcenter) – we speak of benefit fraud when, for example, false information is provided or significant changes (such as a new job or a change in financial circumstances) are not reported. As a result, the person concerned may continue to receive social benefits to which they are no longer entitled, or may receive an excessive amount of such benefits.

  • Legal basis: Section 263 of the Criminal Code (general fraud)
  • Obligations for receivers of social benefits: Section 60 (1) sentence 1 no. 2 of the First Volume of the Social Code (SGB I) obliges recipients of social benefits to report relevant changes in their income situation immediately.

Role of the main customs office: Why are customs investigating?

The competent authority for the prosecution of benefit fraud is the respective  main customs office located in the region where the offence is alleged to have been committed. In North Rhine-Westphalia (e.g. the main customs office in Cologne), for example, customs are always responsible for investigating benefit fraud. The main customs office then, for example, accepts reports from the employment agency regarding unemployment benefits (ALG), from the job center regarding citizen's income or from other social security providers, and conducts the investigation proceedings. This may result in you, as the accused, receiving a letter informing you of the investigation proceedings against you on suspicion of fraud

The course of investigation proceedings on suspicion of fraud

  1. Suspicious fact: Often the authorities receive a hint that something is wrong, for example through a report to the social security agency by the new employer. This usually occurs through an automatic data comparison.
  2. Initiation of the investigation proceedings: The main customs office or another responsible authority checks the documents and decides whether official proceedings are to be initiated.
  3. Hearing form: If there is sufficient evidence to suspect fraud, the accused will usually be sent a hearing form. This form requests that the accused respond to the allegations.
  4. Statement: The accused can respond to this hearing form, but is not required to do so. We strongly recommend that you do not make kany statements regarding the matter and instead consult a lawyer. The accused may invoke the right to remain silent to which he is entitled – the fact that he does not comment may not be to his disadvantage.
  5. Conclusion of the preliminary proceedings: The authority decides whether the proceedings are to be discontinued, whether it will come to an indictment (criminal proceedings) or to administrative fine proceedings


The hearing form: How do I behave correctly? Do I have to comply?

As soon as you receive a hearing form from the Main Customs Office (Hauptzollamt), the following principles apply:

  1. Remain silent: Be sure to exercise your right to remain silent. This means that you do not have to comment on the matter.
  2. Keep quiet: Avoid talking to third parties about the accusation. Statements can be used against you later.
  3. Seek legal counsel: In cases of benefit fraud, early legal advice is essential. A lawyer can request access to records and prepare your defence in a targeted manner.

Possible legal consequences of benefit fraud

If investigations are opened on suspicion of fraud, you can expect various consequences:

1. criminal proceedings:

sentencing to a monetary fine or custodial sentence, depending on the type and amount of the damage. The existence of a criminal record is also a deciding factor in the sentencing. In particular, relevant criminal records can have the effect of increasing the severity of the penalty.

Experience has shown that, unless the accused has a criminal record, the penalty ranges from 40 to 120 daily penalty units.

The fine is calculated in so-called daily rates. One daily rate corresponds to one thirtieth of the monthly net income of the accused. The court estimates the amount of the daily rates if no exact income figures are available.

Example: If your net monthly income is €1,800, the daily rate is €60. A fine of 30 daily rates would therefore be €1,800. If the court overestimates your income, the fine may be set too high. In rare cases, a penalty order may also stipulate a custodial sentence of up to one year, which must be suspended on probation.

2. Administrative fine proceedings:

  • In the case of administrative offences, e.g. under Section 404 (2) no. 27 SGB III, an administrative fine may be imposed.
  • A fine is often imposed if the accusation of fraud cannot be proven but administrative offences have been committed. It is typical for the accused to face administrative fine proceedings after criminal proceedings have been discontinued due to insufficient suspicion. However, the fines are significantly lower than the fine that would have been expected in criminal proceedings.


3. Recovery of benefits:

  • As a rule, benefits received in error must be repaid. This is done by means of a recovery notice or a notice of cancellation and amendment from the Federal Employment Agency.
  • The Federal Employment Agency or other social security agencies will reclaim the money regardless of the outcome of the criminal proceedings.

Common causes of benefit fraud accusations

  • Unnoticed changes: New job, change in family status, relocation or additional income.
  • Unclear communication: documents go missing, messages are not forwarded correctly, lack of knowledge of the obligation to report the commencement of a new job subject to social security contributions to the Federal Employment Agency.
  • Deliberate misrepresentation: in rare cases, the accused actually knowingly provide false information in order to obtain financial advantages with the intention of enriching themselves.

Criminal Defence strategies – how can the probability of a conviction be reduced?

Every case is unique and requires an individual examination. Typical approaches are:

  1. denying intent: If it can be credibly demonstrated that there was no intentional deception, this can refute the accusation of fraud. It is often argued that it was an oversight or a lack of knowledge.
  2. Proof of reporting the commencement of a new job to the Federal Employment Agency or the job center: If it can be proven that the person concerned actually sent a message (e.g. through witnesses), this can refute the accusation of concealment. In the course of our defence work, it has been found that mail addressed to the Federal Employment Agency often goes missing. This is because the Employment Agency first has the mail collected and then digitised by an external service provider (usually a scanning centre) before the scanned documents are distributed to the mailboxes of the respective processors in the agency. It is obvious that something can go wrong in the process – for example, that mail is not properly assigned, gets lost or remains incomplete – and this is not without any life experience.
  3. In various proceedings, we have already been able to name partners, friends and relatives as witnesses who have stated that the respective defendant has actually sent a letter to the employment agency. Often, the courts then had to assume ‘in dubio pro reo’, i.e. in favour of the defendant, that such a letter had actually been sent.
  4. Language barrier: Especially defendants who are not so proficient in German have difficulties understanding the convoluted wording of the application documents from the employment agency. It is then not surprising that they do not fulfil their reporting obligation as closely as the law requires.
  5. Special circumstances: Sometimes special circumstances (professional or private stress, deaths, etc.) can cause the public prosecutor to lose interest in prosecution. These should then be presented in the form of a statement.
  6. Use the right to inspect the case files: After inspecting the case files, it is easier to assess what evidence the public prosecutor has and what strategy makes sense. The contents of the case files often provide individual starting points for a meaningful defence. This means that a dismissal or a dismissal with conditions (e.g. payment of a sum of money) can be negotiated in accordance with § 153a StPO.

Statute of limitations for fraud

According to § 78 StGB, fraud is generally subject to a limitation period of five years after the offence has been committed. The limitation period begins at the end of the year in which the offence was committed. However, interruptions or suspensions of the limitation period (for example, due to certain procedural actions) can extend this period.


Why legal advice makes sense and how a defence against accusations of fraud/benefit fraud in connection with unemployment benefit or a citizen's income is conducted

In investigative proceedings on suspicion of fraud – in particular benefit fraud – the situation is often complex. As a rule, only the criminal defence lawyer is granted access to the files. However, this is indispensable in order to assess the specific allegations on the basis of the contents of the file and to make a well-founded assessment in order to develop an optimal defence strategy.

In addition, legal representation is an important protection against ill-considered statements that could lead to a deterioration of one's own position. Your lawyer can represent you by making a statement of defence in which he objectively assesses the contents of the case file, but without making any statement or submission on your behalf – such a statement could be interpreted as a ‘protective claim’ and could indirectly do you more harm than good.

Advantages of professional defence

  • Strategic defence: Legal submissions are made on a technically sound basis in order to achieve a dismissal of the proceedings or a mild sanction.
  • Avoiding mistakes: Rash statements or wrong reactions to accusations can be difficult to correct later.
  • Psychological relief: The feeling of not being alone in facing accusations can reduce the pressure.

The course of a typical defence activity

Typically, from the point of view of the accused, the procedure should be structured chronologically as follows:

  • Mandate initiation – the accused contacts us without any problems via WhatsApp, via Anwalt.de or via our website and roughly outlines his concern to us. We accept the mandate and send a power of attorney, which the accused countersigns and returns to us. The accused also sends us the hearing form that he has probably already received. If he has already received a penalty order, this should be sent to us so that we can legally review it and file an objection to the penalty order within two weeks of receipt by the accused.
  • Order at the main customs office - We inform the main customs office that we are now representing the legal interests of the defendant and that further correspondence should be addressed to us. At the same time, we request that the public prosecutor's office grant us access to the files and inform them that we will submit a statement, if necessary after inspecting the files. 
  • If a penalty order has been issued, we will file an objection to the penalty order with the competent district court and request access to the case file.
  • Receiving and discussing the investigation files – As soon as we have received the investigation files from the public prosecutor's office, we scan them and send them to the defendant immediately. We discuss the contents of the files with the defendant and develop an individual defence strategy that is tailored to the specifics of the case.
  • Drafting a statement of defence to the public prosecutor – after discussing the matter with the client, we draft a statement of defence in which we attempt to refute the accusations by specifically addressing the facts of the case and also provide information about the personal circumstances of the client. The aim is to have the proceedings dropped before the indictment is filed, thus avoiding or circumventing a main hearing. If a penalty order has already been issued, we will draft a strategy for a defence in the main hearing.
  • Decision by the public prosecutor's office - The public prosecutor's office will inform us by post how it intends to proceed. If everything has gone optimally, the proceedings against the accused will be discontinued. It is also conceivable that a penalty order will be issued that fairly takes into account the individual circumstances of the offence.

Conclusion and recommended action

As soon as you receive a hearing form for benefit fraud in the letterbox or the main customs office initiates investigations on suspicion of fraud, immediate action is required. Those who seek legal help at an early stage can effectively defend themselves against the accusations and reduce or completely avert possible negative consequences.

  1. Keep calm and do not make hasty statements about the facts of the case.
  2. Seek legal advice from a specialised criminal defence lawyer immediately. Do not wait until you receive a letter from the court – by then it may already be too late to achieve a favourable outcome of the proceedings.
  3. Use the right to inspect the case file to get all the facts and make informed decisions.

As an experienced defence lawyer in the field of benefit fraud (especially in the Cologne, Bonn, Berlin and nationwide region), I will represent you.

We advise you on all matters relating to criminal law and represent you in North Rhine-Westphalia (Bonn, Euskirchen, Sankt Augustin, Sinzig, Koblenz, Hürth etc. and in the Cologne area) and throughout Germany. So if you have received a hearing form from the main customs office, please contact us immediately.

I will represent you as your experienced defence lawyer and assist you in all criminal matters. 

Contact me – you can use the anwalt.de contact form or the website of our law firm.

Legal notice: This article does not constitute complete legal advice and is not a substitute for a personal consultation with a qualified lawyer.