Crime of Fraud and Aggravated Fraud against the State (Arts. 640 and 640-bis Criminal Code)

Crime of Fraud and Aggravated Fraud against the State (Arts. 640 and 640-bis Criminal Code)

Criminal profiles, structure of the offence and defence strategy in corporate criminal law

The offences of fraud and aggravated fraud for obtaining public disbursements lie at the heart of the system of crimes against property and against public administration, assuming primary relevance within economic criminal law, as they directly affect the correctness of contractual dynamics and the allocation of public and private resources.

The two offences share a common typical structure, based on the implementation of fraudulent conduct capable of altering the decision-making process of the passive subject, through artifices or deceptions that vitiate the formation of intent.

However, they differ from a functional and systematic perspective:

• fraud (Art. 640 Criminal Code) is aimed at protecting individual property, suppressing fraudulent conduct that causes patrimonial damage to private parties;
• aggravated fraud against the State (Art. 640-bis Criminal Code) is characterised by its impact on public resources and on the proper functioning of administrative action, extending the area of protection to the public dimension of the injured interest.

In both cases, the criminal disvalue of the conduct lies in the fraudulent manipulation of reality, capable of inducing error in the passive subject and bringing about an unjustified patrimonial transfer.

In the business context, these offences take on particular relevance in the presence of complex economic operations, in which the boundary between contractual breach, business risk and criminally relevant conduct requires a substantive assessment of the function of the operations and the methods of execution.

It follows that the correct legal qualification of the facts and the construction of the defence strategy require an integrated analysis of the contractual, economic-financial, documentary and declaratory profiles, in order to verify the existence of the constitutive elements of the offence and to distinguish criminally relevant cases from those attributable to the normal physiology of economic relations.

Fraud (Art. 640 Criminal Code)

Structure of the offence

The offence of fraud, governed by Art. 640 of the Criminal Code, constitutes a progressively-formed offence, in which the harmful event is the result of an articulated causal sequence originated by fraudulent conduct capable of affecting the passive subject's decision-making process.

The incriminating provision punishes anyone who, through artifices or deceptions, induces another into error, obtaining an unjust profit to the detriment of others, placing at the centre of typicality the link between deception, error and patrimonial transfer.

From a structural perspective, the offence is articulated in three fundamental elements:

• the fraudulent conduct, consisting in the use of artifices or deceptions, i.e. behaviour capable of creating a false representation of reality, through active means (simulations, alterations, documentary constructions) or even omissive means, provided they possess deceptive capacity;
• the induction into error of the passive subject, which must be in a causal relationship with the fraudulent conduct, affecting the decision-making process and determining a false perception of economically relevant reality;
• the obtaining of an unjust profit, with related patrimonial damage to others, as a consequence of the dispositive act performed by the victim as a result of the induced error.

Analysis of the offence therefore requires rigorous verification of the causal link between artifices, error and patrimonial disposition; the mere existence of untruthful behaviour is not sufficient, as it must be concretely capable of bringing about the typical event.

It follows that the distinction between criminal liability and mere civil breach lies in the presence of an actual deceptive capacity of the conduct, capable of affecting the formation of the passive subject's contractual intent.

Subjective element

From a subjective perspective, the offence of fraud requires specific intent, which consists in the will to obtain an unjust profit through the use of artifices or deceptions capable of inducing the passive subject into error.

In particular, the psychological element is articulated in a dual component:

• the awareness and will of the fraudulent conduct, i.e. the representation of the suitability of the artifices or deceptions to distort the victim's perception of reality;
• the purpose of procuring an unjust profit for oneself or others, as a further aim that qualifies the conduct and directs its realisation.

Specific intent therefore requires not only the will to carry out the deception, but also the purposive-intentional direction of the conduct towards obtaining an undue patrimonial advantage, with related acceptance of harm to others.

In applicative practice, proof of the subjective element is frequently inferred through circumstantial evidence, by analysing symptomatic elements such as:

• the methods of execution of the conduct;
• the structure and reiteration of the operations;
• the economic and relational context in which the action is embedded;
• the presence of anomalies with respect to normal commercial practice.

The investigation must be conducted according to a criterion of overall evaluation of the circumstances of the specific case, suitable to verify whether the conduct was actually directed towards obtaining an unjust profit through inducement into error.

It follows that demonstrating the absence of such purpose, or the attribution of the conduct to normal contractual dynamics or mere breach scenarios, is decisive for excluding criminal liability.

Scope of application in corporate criminal law

In the context of corporate criminal law, the offence of fraud takes on particularly significant relevance, as contractual and commercial dynamics may constitute the vehicle through which fraudulent conduct capable of affecting the formation of the contracting party's intent is realised.

On a phenomenological level, the offence frequently manifests through operations which, although embedded in formally lawful contractual schemes, are characterised by deceptive elements, including:

• commercial operations based on untruthful representations, capable of causing a false perception of economic reality by the passive subject;
• contractual simulations, in which the contractual structure is used to conceal the real nature of the operation or to hide circumstances relevant to the decision;
• use of false, altered or incomplete documentation, aimed at supporting a mendacious representation of the patrimonial, financial or commercial situation;
• fraudulent contractual practices, characterised by execution methods capable of affecting the counterparty's decision-making process.

In such contexts, the distinction between criminal liability and mere contractual irregularity or civil breach cannot be identified in purely formal terms, but requires a substantive assessment of the conduct's capacity to induce the passive subject into error.

It follows that the criminal relevance of the conduct is based on the presence of an effective deceptive mechanism, capable of altering the formation of contractual intent and determining an unjustified patrimonial transfer, thus distinguishing fraud from the normal risk dynamics inherent to business activity.

Aggravated Fraud against the State (Art. 640-bis Criminal Code)

Structure of the offence

Aggravated fraud for obtaining public disbursements, provided by Art. 640-bis Criminal Code, constitutes a qualified form of fraud, characterised by the specific purpose of the fraudulent conduct to obtain public resources.

The incriminating provision applies when the artifices or deceptions are directed at unduly obtaining:

• contributions;
• funding;
• subsidised loans;
• other public disbursements, however denominated, originating from the State, public bodies or European Union institutions.

From a structural perspective, the offence retains the typical framework of fraud, requiring:

• fraudulent conduct capable of inducing the administration into error;
• a determining error in the formation of the disbursing entity's will;
• the obtaining of an unjust profit, with related damage to public assets.

The qualifying element is represented by the public nature of the resources being attacked, which determines an extension of the offence, encompassing not only the entity's assets but also the proper functioning of administrative action and the principles of impartiality and good performance under Art. 97 of the Constitution.

In this perspective, the offence takes on a broader dimension compared to ordinary fraud, as it affects the regularity of public resource disbursement procedures and the proper allocation of funds intended for the collective interest.

It follows that the criminal relevance of the conduct is based not only on the presence of a fraudulent mechanism, but on its capacity to interfere with the decision-making processes of public administration, determining an undue transfer of public resources.

Objective element

From an objective perspective, the offence under Art. 640-bis Criminal Code reproduces, in a qualified manner, the typical structure of fraud, requiring the existence of an articulated causal sequence based on the interaction between fraudulent conduct, error and obtaining of the economic advantage.

In particular, it is necessary to ascertain:

• the presence of artifices or deceptions, i.e. active or omissive behaviour endowed with concrete deceptive capacity, capable of distorting the disbursing entity's representation of reality, through data alteration, simulation of requirements or construction of an untruthful information framework;
• the inducement of public administration into error, which must be in a causal relationship with the fraudulent conduct, affecting the entity's decision-making process and leading to the adoption of the disbursement granting measure;
• the obtaining of an undue economic advantage, consisting in obtaining public resources in the absence of the legally required prerequisites, with related prejudice to public assets.

The investigation must be conducted through rigorous verification of the causal link between artifices, error and attribution of the benefit; mere documentary irregularity or untruthfulness of individual elements is not sufficient, as the conduct must have concretely affected the administration's determination.

It follows that the distinction between criminal liability and mere administrative irregularity is based on the actual deceptive capacity of the conduct and its causal impact on obtaining the public disbursement.

Distinction from undue receipt (Art. 316-ter Criminal Code)

The distinction between aggravated fraud for obtaining public disbursements (Art. 640-bis Criminal Code) and undue receipt of public disbursements (Art. 316-ter Criminal Code) constitutes an interpretative junction of primary importance, significantly affecting both the sanctioning treatment and the configurability of criminal liability itself.

The fundamental distinction between the two offences lies in the quality and structure of the conduct carried out. In particular:

• Art. 640-bis Criminal Code presupposes the realisation of artifices or deceptions, i.e. fraudulent conduct characterised by a quid pluris in terms of deceptive capacity, capable of inducing public administration into error through the construction of an altered or simulated reality;
• Art. 316-ter Criminal Code, on the other hand, applies in the presence of mere exposition of untruthful data or omission of due information, in the absence of true structured fraudulent activity, as untruthful conduct without particular deceptive elaboration is sufficient.

It follows that the difference between the two offences is not quantitative but qualitative, based on the presence or absence of a fraudulent mechanism capable of decisively affecting the disbursing entity's decision-making process.

In this perspective, correct legal qualification requires a substantive assessment of the conduct's execution methods, in order to verify whether it constitutes structured deceptive activity or is exhausted in untruthful representation devoid of artificiality.

The distinction takes on decisive relevance in the defence sphere, as it allows, where the prerequisites exist, a reclassification of the conduct in less burdensome terms, directly affecting the sanctioning regime and the overall criminal consequences.

Structure of criminal investigation

Investigation of the offences of fraud and aggravated fraud for obtaining public disbursements is articulated according to a three-phase structure, based on logically integrated directives functionally oriented to verifying the typicality of the conduct.

1. Verification of fraudulent conduct

The first and fundamental level of investigation concerns ascertaining the existence of artifices or deceptions, as constitutive elements of typical conduct. In this perspective, it is necessary to verify:

• the existence of active or omissive behaviour capable of distorting the representation of reality, such as simulations, documentary alterations, artificial contractual constructions or qualified omissions;
• the concrete deceptive capacity of the conduct, i.e. its ability to affect the passive subject's cognitive process, determining a distorted perception of elements relevant to the decision;
• the non-attribution of the conduct to mere formal irregularities or contractual breaches lacking actual deceptive aptitude.

The investigation must be conducted according to a substantive criterion, aimed at assessing the objective capacity of the conduct to induce error, regardless of merely formal evaluations and considering the overall context in which the action is embedded.

It follows that the distinction between criminal relevance and irrelevance of the conduct is based on the presence of an effective fraudulent mechanism, capable of altering the passive subject's decision-making process, constituting the logical prerequisite for the subsequent production of the damaging event.

2. Causal link

The second level of investigation concerns verification of the causal link between the fraudulent conduct and the obtaining of profit, as an essential element for the configurability of the offence. In particular, it is necessary to ascertain that:

• the error induced in the passive subject is a direct effect of the artifices or deceptions implemented;
• such error has determined a patrimonial dispositive act, consisting in the attribution of an economic advantage to the acting subject;
• the profit obtained is causally linked to the fraudulent conduct, as an immediate and direct consequence of the deception.

The investigation must be conducted according to a substantive criterion, aimed at verifying the actual impact of the conduct on the passive subject's decision-making process, excluding scenarios in which the decision was made autonomously, the deception played a merely marginal or non-determining role, or the patrimonial transfer is attributable to causes other than the disputed conduct.

It follows that the configurability of the offence requires demonstration of a qualified causal relationship, in which the deception stands as the determining factor of the patrimonial transfer and the obtaining of profit. The absence or interruption of such link directly affects the typicality of the offence and may lead to the exclusion of criminal liability.

3. Verification of specific intent

The third level of investigation concerns verification of the subjective element, represented by specific intent, which qualifies fraudulent conduct in a purposive sense. In particular, it is necessary to ascertain that the acting subject acted with the conscious will to obtain an unjust profit through inducement of the passive subject into error, implementing artifices or deceptions functionally oriented to that purpose.

The investigation is articulated in verifying:

• the representation of the deceptive capacity of the conduct, i.e. the awareness that the artifices or deceptions are capable of distorting the victim's perception of reality;
• the purpose of obtaining an undue patrimonial advantage, as the objective pursued through the fraudulent conduct;
• the conscious acceptance of harm to others, as a consequence of the patrimonial transfer determined by the deception.

In applicative practice, proof of specific intent is frequently inferred through circumstantial evidence, by overall assessment of symptomatic elements such as the methods of execution of the conduct, the reiteration or systematicity of operations, the economic and relational context in which the action is embedded, and the presence of anomalies with respect to normal commercial practice.

The investigation must be conducted according to a criterion of global and non-atomistic evaluation of the circumstances of the specific case, aimed at verifying whether the conduct was actually oriented to obtaining an unjust profit through deception. It follows that demonstrating the absence of such purpose, or attributing the conduct to lawful contractual dynamics or mere breach scenarios, is decisive for excluding criminal liability.

Defence strategy and technical criteria for its development

Defence in proceedings concerning the offences of fraud and aggravated fraud for obtaining public disbursements requires an analytical and structured approach, based on the decomposition of the constitutive elements of the offence and on verification of their actual existence in the specific case.

In this perspective, the defence approach is articulated along closely interconnected directives:

• analysis of fraudulent conduct, in order to verify the real existence of artifices or deceptions endowed with concrete deceptive capacity, excluding the criminal relevance of behaviour attributable to mere contractual irregularities or breaches;
• verification of the causal link between conduct and event, ascertaining whether the passive subject's error was actually determined by the disputed conduct and whether a causally linked patrimonial transfer derived from it;
• evaluation of the subjective element, with particular regard to the existence of specific intent, i.e. the purpose of obtaining an unjust profit through deception;
• reconstruction of the economic-contractual dynamics of operations, in order to identify their concrete cause and their possible consistency with the normal physiology of business activity.

The defence strategy is thus based on a substantive and not merely formal evaluation of the facts, aimed at distinguishing between criminally relevant conduct and situations attributable to normal contractual dialectics or business risk. In this area, the ability to demonstrate the absence of effective deceptive activity, the non-decisiveness of the error for the determination of the passive subject, and the lack of an unjust profit purpose takes on decisive relevance.

These elements, where adequately documented and reconstructed, are capable of decisively affecting the legal qualification of the conduct and the outcome of the proceedings.

1. Verification of the suitability of artifices or deceptions

The first axis of the defence approach concerns verification of the actual suitability of artifices or deceptions to constitute criminally relevant fraudulent conduct, as an indispensable prerequisite of the fraud offence. In this perspective, defence activity is oriented towards demonstrating the absence of concrete deceptive capacity of the conduct and the attribution of the conduct to normal contractual dynamics.

It follows that demonstrating the absence of effective deceptive capacity directly affects the configurability of typical conduct, potentially leading to the exclusion of the incriminating offence or its reclassification in terms not criminally relevant.

2. Analysis of the causal link

The second axis of the defence approach concerns verification of the causal link between fraudulent conduct and the damaging event, as an essential element for the configurability of the offence. In this perspective, defence activity is oriented towards ascertaining the actual decisional autonomy of the passive subject and the possible causal irrelevance of the deception with respect to the result.

It follows that the absence or interruption of the causal link, as a structural element of the offence, directly affects the typicality of the conduct and may lead to the exclusion of criminal liability or the reclassification of facts in terms not criminally relevant.

3. Exclusion of specific intent

A further central junction of the defence approach is represented by verification of the subjective element, with particular regard to demonstrating the absence of the specific intent required by the fraud offence.

In this perspective, defence activity is oriented towards demonstrating:

• the absence of fraudulent purpose, verifying that the conduct was not oriented to obtaining an unjust profit through deception, but is embedded in lawful contractual or business dynamics, even if characterised by critical issues or irregularities;
• the good faith of the economic operator, inferable from the consistency of operations with the activity carried out, the transparency of behaviour and the absence of symptomatic elements of deceptive will;
• the existence of a concrete economic justification for the operation, capable of demonstrating that the obtained advantage is attributable to an actual contractual cause and not to a fraudulent mechanism.

The investigation must be conducted according to a criterion of overall evaluation of the circumstances of the specific case, aimed at verifying whether the conduct is actually characterised by a purposive-intentional direction towards unjust profit, or whether it can be attributed to the physiology of economic relations or mere breach scenarios.

It follows that demonstrating the absence of specific intent directly affects the configurability of the incriminating offence and may lead to the exclusion of criminal liability or the reclassification of the conduct in civil or administrative spheres.

4. Management of patrimonial precautionary measures

In proceedings for fraud and aggravated fraud against the State, the real precautionary phase takes on central relevance, due to the frequent adoption of preventive seizures aimed at confiscation, also by equivalent, with significant impact on personal assets and business operations.

In the presence of such measures, defence activity is oriented towards rigorous verification of the prerequisites for the legitimacy of the patrimonial ablation, through coordinated analysis of the following profiles:

• the link of pertinence between the assets subject to seizure and the disputed offence, ascertaining that the attacked proceeds actually constitute the product, profit or price of the crime, or their equivalent, excluding assets without direct or indirect connection with the conduct;
• the correct identification and quantification of the profit of the offence, through analytical reconstruction of the economic-financial dynamics, aimed at avoiding undue extensions of the measure to values exceeding the patrimonial advantage actually obtained;
• the proportionality of the precautionary measure, evaluated in relation to the gravity of the fact, the amount of the hypothesised profit and the underlying precautionary needs, according to criteria of adequacy and necessity, in line with the principles elaborated by the jurisprudence of legitimacy.

The joint examination of these elements allows verification of the measure's conformity with the principles of legality and proportion, decisively affecting its endurance at review and, where necessary, at the level of legitimacy.

Relevance of the initial phase of proceedings

In proceedings concerning the offences of fraud and aggravated fraud against the State, the preliminary investigations phase takes on decisive strategic value, as in it the structural elements of the prosecutorial approach are defined and the coordinates of the entire procedural development are traced.

In this procedural segment, in fact:

• the evidentiary framework is outlined, through the acquisition of contractual, accounting and administrative documentation, as well as through investigative activities aimed at reconstructing the dynamics of the disputed operations;
• the methods of execution of the conduct are identified, with particular reference to the nature and structure of the artifices or deceptions, as well as their impact on the passive subject's decision-making process;
• real precautionary measures may be adopted, in particular preventive seizures aimed at confiscation, with immediate impact on the suspect's assets and, in business contexts, on the continuity of business activity.

In this context, timely defence intervention allows to significantly affect the evolution of the proceedings, through:

• the early reconstruction of the contractual and economic dynamics, capable of orienting the legal qualification of the conduct;
• challenging the prerequisites of precautionary measures, both from the perspective of fumus commissi delicti and periculum in mora;
• the redefinition of the prosecutorial approach, in order to exclude or reduce the criminal relevance of the facts.

It follows that the management of the initial phase constitutes an essential moment of strategic defence construction, capable of decisively affecting the outcome of the proceedings.

Legal assistance in Milan – Corporate criminal law

Defence activity in matters of fraud and aggravated fraud against the State falls within the broader scope of economic criminal law, requiring an integrated approach combining criminal, corporate, financial and administrative expertise.

In this context, legal assistance is oriented towards managing complex proceedings, characterised by articulated reconstructions of contractual and economic-financial dynamics, and concerns, in particular:

• fraud proceedings (Art. 640 Criminal Code), with analysis of the conduct, the causal link and the existence of specific intent;
• aggravated fraud against the State offences (Art. 640-bis Criminal Code), with verification of the structure of operations and their impact on administration's decision-making process;
• scenarios of undue receipt of public disbursements, with particular attention to the correct legal qualification of the conduct;
• connected economic and corporate offences, in which the disputed operations are embedded in articulated business contexts;
• management of seizures and patrimonial precautionary measures, with interventions aimed at verifying the legitimacy of measures, the correct identification of profit and the proportionality of ablation.

Defence activity is developed according to a technical-analytical approach, aimed at accurately reconstructing the economic-contractual dynamics of operations and substantively verifying the existence of the constitutive elements of the offence, with particular attention to asset protection and the continuity of business activity.