Ruling [DEU] ¦ Federal Court Orders Retrial in Large-Scale Tax Evasion Case

BGH Clarifies Liability and Counting of Tax Fraud Acts Where Machine-Generated Records Were Manipulated

In a March 6, 2024 decision (1 StR 308/23) the German Federal Court of Justice (Bundesgerichtshof, BGH) overturned parts of a Saarbrücken regional court judgment involving large-scale manipulation of revenue records from gaming machines. The accused operated gambling arcades and used a device to alter the data readouts (“Auslesestreifen”) produced by specialized data extraction units connected to the slot machines. Those engineered readouts were then used in the businesses’ bookkeeping and forwarded to the tax advisor, resulting in materially understated tax declarations. The trial court convicted the male defendant of tax evasion in 17 instances and the female defendant of aiding and abetting in 16 instances, imposed custodial sentences (one suspended) and fined the corporate entities for each of the identified tax offenses. The BGH’s ruling substantially re-evaluates how the sequence of acts should be legally characterized, the possible additional criminal exposure for falsifying technical records, and the procedural consequences flowing from those legal assessments.

Core legal findings – concurrence, accessory liability and quantity of offenses

A central legal issue was how to treat the multitude of manipulations across time: were these discrete, countable offenses for each month and site, or did the defendant’s role amount to fewer, unitary offenses because of his function and the nature of his contribution? The BGH emphasized the distinction between a direct perpetrator who personally files false tax returns and a so-called indirect (“mittelbarer”) perpetrator who creates or supplies manipulated underlying material that another – here, an independent, non-collusive tax advisor – then submits. Where an indirect perpetrator’s unitary, preparatory contribution causally ties together many later acts by another actor, the appropriate legal treatment follows the perpetrator’s contribution and can convert what appears factually to be many individual offenses into a smaller number of independent offenses for concurrence analysis. Applying that framework to the proven facts, the BGH concluded that the male defendant’s conduct should be assessed not as 17 separate tax-evasion offenses but as six independent offenses. The court reached a parallel result for the aid-and-abet theory applied to the female defendant: her actions supported the same reduced number of principal offenses, so she was likewise to be credited with six separate acts of accessory conduct rather than 16 or 17 counts.

Bastian Schwind-Wagner _Follow

"The BGH decision sharpens how preparatory conduct that generates or alters machine data is counted for tax fraud purposes and underlines that an indirect perpetrator’s unitary contribution can reduce what superficially appear as many separate offenses to fewer independent acts. This recalibration affects not only sentencing but also whether parts of earlier procedural dismissals for statute of limitations remain sustainable.

By directing a retrial to consider falsification of technical records under Section 268 StGB, the court opened an additional line of criminal exposure that prosecutors should assess and defense counsel must address. The preserved findings on evasion amounts and intent leave core accountability intact while requiring a more precise legal framing of the defendants’ conduct."

Effects on procedural disposition and statute-of-limitations reasoning

The recharacterization of the acts affected more than sentencing. The regional court had partially stayed proceedings for some tax periods due to statute-of-limitations issues. The BGH held that where several statutory violations are “tateinheitlich” (committed as parts of one unified act) and therefore legally one offense, procedural decisions that treated them as separate, time-barred offenses were erroneous. Because the concurrence analysis changes which acts count as distinct criminal acts, the prior partial dismissals and limitations-based discontinuances could no longer stand in the manner decided. The BGH therefore set aside those parts of the judgment and remanded the matter for re-trial and re-sentencing before a different economic criminal chamber of the regional court.

Falsification of technical records (Section 268 StGB) – a distinct line of inquiry the court requires

Beyond the concurrence and accessory issues, the BGH identified an important substantive omission: the trial court failed to examine whether the defendants’ conduct also constituted falsification of technical records under Section 268 of the German Criminal Code. The prosecution had detailed how the defendant used an external manipulation device to alter data stored on the readout devices’ storage cards and then produced new printed readouts that misrepresented the machines’ true revenue. Although the indictment did not explicitly charge the offense under Section 268, the BGH explained that the chargeable conduct was sufficiently described in the case material and that the prosecution had expressed willingness to pursue convictions relying on the legal theory that falsified technical records were used to reduce taxes. Moreover, the trial court itself treated the Auslesestreifen as technical records in the sentencing discussion, which made it inconsistent to omit a legal assessment under Section 268. The BGH therefore ordered that the new trial must reassess the facts under that statute, including addressing whether any earlier final judgments in other proceedings bar prosecution under double‑jeopardy principles (Art. 103(3) GG).

What remains intact – tax evasion findings and amounts

Even while setting aside significant parts of the regional court’s ruling, the BGH left intact core factual findings that are supported by a legally sound evidentiary assessment. Those preserved findings include the convictions for tax evasion as to the relevant substantive counts insofar as the BGH’s revision scope permits, the calculated evasion amounts and the defendants’ subjective criminal intent. The court stressed that this limited preservation reflects the appeals court’s constrained review of testimonial and factual findings where the evidence-based assessment was not vitiated by legal error.

Practical implications for prosecutions and defense strategies in financial-crime cases

This decision carries several practical lessons for prosecutors, defense counsel, and businesses operating in sectors where machine-generated accounting records play a central role.

• For prosecutors: when the factual narrative shows creation, alteration or substitution of device-generated records, charging decisions should explicitly consider falsification of technical records under Section 268 in addition to tax offenses. Doing so ensures that courts can fully examine alternative statutory theories and avoids later procedural remands.
• For charging authorities: clearly delineate whether the tax filings submitted to tax authorities were made by the defendant personally or by an independent professional. The distinction between direct submission and an indirect perpetrator’s preparatory contribution directly affects the concurrence analysis and the count of punishable acts.
• For defense counsel: challenge the legal classification of recurrent acts as multiple independent offenses where the accused’s unitary preparatory conduct primarily fuels successive tax declarations. Conversely, defenses must also anticipate Section 268 exposure where machine-readouts are replaced or reproduced to mimic legitimate device outputs.
• For businesses and tax advisors: strengthen controls over the chain of custody for machine data and the integrity of exports from revenue-logging devices. Independent verification of readouts and systemically enforced separation between machine data extraction and bookkeeping can mitigate the risk that altered technical records will form the basis for false declarations.

Conclusion – an important calibration of offense-counting and ancillary liability

The BGH’s judgment clarifies that liability in complex tax fraud schemes involving manipulated machine-generated records depends critically on the factual role of each actor and the legal relation between preparatory actions and the later submission of returns by a third party. By requiring the trial court to reconsider both concurrence in the number of offenses and the applicability of technical-record falsification, the BGH ensures that sentencing and liability are better aligned with the true legal nature of the conduct. The ruling will likely prompt prosecutors to be more explicit in their charging choices and to include technical-records offenses where the factual record supports them, and it will sharpen defense strategies that contest how many discrete offenses the accused actually committed.

Dive deeper

• openJur ¦ BGH, Urteil vom 06.03.2024 - 1 StR 308/23 ¦ Link