\u201cThey took my money, I\u2019ll file a complaint.\u201d The reflex is understandable but often wrong, since a loan that is not repaid is not, in itself, fraud and is first a civil matter. The difference turns on one word, cunning (astuce), and it governs everything that follows, in particular the choice of the procedure that has a chance of bringing the money back.<\/p>\n
As a rule, no. When you lend money (a loan for consumption, Art. 312 CO), the borrower becomes its owner and undertakes to return the equivalent. If they do not repay, they breach their obligation, so that you hold a civil claim against them. Delay, financial difficulty, even a degree of bad faith in performance do not suffice. The mere failure to repay a loan is not in itself punishable.<\/p>\n
For there to be fraud, something more is needed, and it happens before the funds are handed over.<\/p>\n
Fraud under Art. 146 of the Swiss Criminal Code requires that the offender, with a view to unlawful enrichment, deceived the victim by false statements or by concealing true facts, and that this deception led the victim to act against their financial interests. Applied to a loan, what matters is the borrower\u2019s state of mind and the means used when the money was handed over. Did the borrower, at the time of the loan, already lack the will or the ability to repay? Feigning a will to repay is in principle cunning, because it is an inner fact the lender cannot check, unless the borrower\u2019s inability to repay was itself easy to verify (ATF 142 IV 153, consid. 2.2.2, ATF 118 IV 359).<\/p>\n
Not every lie is fraud. The deception must be cunning (astuce, Arglist). Case law finds cunning where the offender builds an edifice of lies or a scheme, but also where a simple lie could not be checked, or checking could not reasonably be expected, or where the offender dissuaded the victim from checking or relied on a particular relationship of trust (ATF 142 IV 153, consid. 2.2.2). A borrower who produces false documents, invents guarantees, sets up a fictitious situation or exploits a relationship of trust to disarm the usual checks acts with cunning. One who merely promised in good faith and then could not pay does not.<\/p>\n
The victim\u2019s own vigilance counts, but only to a limited extent. Cunning is lacking if the victim could have avoided the error with the minimum of care that could be expected of them, and the Federal Supreme Court does not require them to have taken every possible precaution. Only carelessness that pushes the deception into the background excludes fraud, which the Court accepts only in exceptional cases (ATF 142 IV 153, consid. 2.2.2). In Geneva, the Criminal Appeals Chamber (Chambre p\u00e9nale de recours) upholds in particular decisions not to open proceedings (Art. 310 CrimPC) or to discontinue them (Art. 319 CrimPC) where cunning is lacking, for instance where the lender paid out large sums without the slightest check despite warning signs (ACPR\/172\/2025 of 28 February 2025).<\/p>\n
The two are often confused. Fraud (Art. 146 SCC) concerns funds obtained by deception. Misappropriation (Art. 138 SCC) concerns assets entrusted for a specific purpose and diverted from it, such as money given to be invested, held, or passed on, then kept or used otherwise. In the case of a loan, however, misappropriation comes into play only exceptionally, where the funds were handed over for a specific purpose that protects the lender against the risk of loss and the borrower had to preserve their equivalent value, the purchase of a property for example (ATF 120 IV 117, consid. 2, ATF 124 IV 9, consid. 1). Without such a purpose, there is no misappropriation, as the Federal Supreme Court held for a loan intended for gambling (ATF 129 IV 257, consid. 2). The legal characterization determines the constituent elements to be proven and, therefore, the strength of your case, so it should be settled correctly from the outset.<\/p>\n
Where the loan was made to a relative or to a person living in the same household as the lender, fraud and misappropriation are prosecuted only on complaint, to be filed within three months of the day the offender became known (Art. 146(3), 138 no. 1, 110(1) and (2) and 31 SCC).<\/p>\n
The lender has three tracks, which do not serve the same purpose. Debt enforcement (DEBA) is the direct route to recover an undisputed or established claim, through a payment order and, if the debtor objects, the lifting of the objection before the civil court. With a signed acknowledgment of debt, you can apply for provisional lifting of the objection, which the court grants unless the debtor immediately shows credible grounds for being released from the debt (Art. 82 DEBA). With an enforceable judgment, the lifting is definitive (Art. 80 DEBA).<\/p>\n
The civil action establishes and quantifies the claim where it is contested. The criminal complaint, where cunning is present, offers seizure of assets and tracing of the funds, two tools the civil track lacks. The public prosecutor can freeze the assets from the investigation stage (Art. 263 CrimPC). Where the funds are found, the court first returns them to you as the injured party (Art. 70(1) SCC). Failing that, it can, at your request, award you the forfeited assets or the equivalent claim up to the amount of the loss set by judgment or settlement, if that loss is not covered by any insurance and against assignment to the State of the corresponding part of your claim (Art. 73 SCC). You join the proceedings as a private claimant and assert your civil claims in the criminal trial itself (Art. 122 ff. CrimPC), without separate proceedings. The best strategy often combines them rather than choosing one.<\/p>\n
In civil proceedings, the losing party bears the costs (Art. 106 CivPC), which include party costs, that is, a contribution to your lawyer\u2019s fees (Art. 95(3)(b) CivPC). The amount does not simply reproduce your invoice, as it is set according to the Geneva tariff (RTFMC) on the basis of the amount in dispute. Depending on the case, it covers most of your fees or leaves part of them for you to bear. In the criminal proceedings, if you act as a private claimant and prevail, the convicted person may be ordered to compensate you (Art. 433 CrimPC). The claim must be quantified and substantiated, with a fee note, failing which the court does not consider it.<\/p>\n
The same analysis applies to funds raised by a crypto project, see Disappointed investor in a Swiss crypto project<\/a>.<\/p>\n Loan for consumption: Art. 312 CO. Fraud and the requirement of cunning (Arglist): Art. 146 SCC. Misappropriation: Art. 138 SCC. Recovery: Federal Act on Debt Enforcement and Bankruptcy (DEBA). Compensation of the private claimant: Art. 433 CrimPC.<\/p>\n Matthias Traussnig is an attorney at the Geneva Bar and founder of Sentinel Legal. He holds the CAS in Digital Finance Law from the University of Geneva and practices criminal law, white-collar crime and technology law.<\/p>\n Once cunning is established and a complaint is warranted, see our page criminal defense lawyer in Geneva<\/a>.<\/p>\nLegal basis<\/h2>\n
About the author<\/h2>\n
On this type of case<\/h2>\n