Defending Managers and Owners in Economic and Tax Crime Investigations
Suspicions of economic or tax crime can fall on a manager or business owner without warning. In such a moment, you need a criminal law specialist who understands business realities, knows investigative methodology, and can defend you effectively. ARROWS, a Prague-based law firm, handles these situations with discretion and a high level of expertise appreciated by both managers and law enforcement authorities involved in criminal proceedings.
Article contents
- Managers and entrepreneurs most often face criminal prosecution as a result of financial or tax audits or reports by competitors; the first procedural steps can quickly secure assets and damage reputation.
- Criminal proceedings in white-collar crime cases take months or years; without a strong defence from the outset, the position of the suspect/accused deteriorates exponentially.
- Discreet legal representation is critical especially for top management and company owners; information leaks about an investigation can destroy business relationships and cause share prices to fall.
- Specialists from ARROWS advokátní kancelář understand the specifics of tax records, accounting, and financial management; they can distinguish between an error and intent, and between legally relevant conduct and a mere formal defect.
How to imagine a scenario affecting top management
You are at the helm of a mid-sized company. For a long time, you have had minor accounting inaccuracies—sometimes due to an accountant’s mistake, sometimes due to unclear interpretations of the Czech Tax Code. One audit lasted six months. It ended with a settlement, you paid an amount, and you thought it was over.
Today you receive an SMS from your assistant: “The inspection team called. They want to talk to you about what happened between 2023 and 2025.” Again? Why? What has changed? What happened: The original audit generated leads for other steps (for example, for law enforcement authorities). Now it is no longer just an administrative error.
It may involve the commission of a criminal offence—for example, breach of duty in the administration of another’s property, tax evasion (shortening of tax, fees and similar mandatory payments), fraud, or even embezzlement, if certain conditions and the amount of damage or benefit are met.
A financial audit is almost always resolvable within a few months; criminal proceedings, by contrast, can drag on for years. And if you do not act correctly from the beginning, your position can deteriorate dramatically over that time.
Why criminal law requires specialised representation
Criminal proceedings are governed by laws that an in-house corporate lawyer may not deal with on a daily basis. Their content follows a specific logic.
Your legal representative must be on the side of the accused or suspect from the very beginning to protect your rights and liberty—not to explain to the public prosecutor what happened.
In criminal defence, the primary goal is not to prove innocence, but to ensure that evidence is collected lawfully, that the suspect’s rights are not violated, and that penalties are imposed only on the basis of proven facts.
An entrepreneur or manager who consults a general lawyer first in such a situation risks signing an unnecessary statement or attending an interview without legal representation.
- They sign an unnecessary statement that the public prosecutor will then interpret as a confession.
- They willingly attend an interview without legal representation, which the public prosecutor or the police will take advantage of.
- They provide information that is then used against them in the proceedings.
- They fail to exercise the right to remain silent or inappropriately reveal their business and accounting systems.
In criminal law, every word counts. Every step is recorded. Everything can then be used in court.
Discretion as a factor of competitive advantage
A top manager or company owner faces an unpleasant reality: if competitors, partners, investors, or bank lenders find out that they are on the list of suspects in criminal proceedings, decisions can change within hours.
Repayment deadlines will be shortened, business partners will start scrutinising every invoice, and investors will head for the exit. Employees sense uncertainty. Shares fall. Business confidence evaporates.
Our attorneys in Prague at ARROWS advokátní kancelář understand this reality and practise maximum discretion—from the initial consultation, through dealings with law enforcement authorities, to hearings in court.
ARROWS specialists understand both worlds—both the sensitivity of criminal proceedings and corporate transparency.
This also means that ARROWS lawyers know how to communicate with you in a way that protects your legal position while not unnecessarily jeopardising your business position.
Initial steps: why they are critical and what can go wrong
How do criminal proceedings work in cases of suspected white-collar or tax crime in the Czech Republic in 2026?
- Verification of a report : Criminal proceedings usually begin with the filing of a criminal complaint (e.g., by the tax authority, a competitor, or as part of an internal investigation) or on the basis of other information obtained by law enforcement authorities.
At this stage, the police authority gathers information and evidence to determine whether a criminal offence has been committed and whether the suspicion against a specific person is well-founded. This can happen at any time. - Commencement of criminal prosecution : If the police authority collects sufficient evidence indicating that a criminal offence has been committed and that it was committed by a specific person, it issues a resolution commencing criminal prosecution against that person. From that moment, the person has the status of an accused.
- Investigation : After criminal prosecution is commenced, an investigation is conducted during which the police authority (under the supervision of the public prosecutor) carries out interviews, secures documentary evidence (e.g., accounting records), and conducts searches.
The accused’s assets, including funds in bank accounts, may be secured to prevent concealment or transfer. - Interview of the suspect/accused : This is where things differ dramatically. If you are summoned for an interview without legal representation, you are at risk.
If you have a specialist from ARROWS advokátní kancelář by your side, the situation changes radically—the lawyer will tell you which question is dangerous for you and which you are not obliged to answer. - Decision on indictment or discontinuance : Most often, it takes months to years for the public prosecutor, after the investigation is completed, to decide whether to file an indictment with the court or to discontinue the prosecution (e.g., due to lack of evidence, inadmissibility of prosecution, etc.).
- Court proceedings : If the public prosecutor files an indictment, the main trial before the court begins. Here, the matter is handled at the highest level, with full exercise of the rights of the defence and the prosecution, and the court decides on guilt and sentence.
The real criminal-law consequences in white-collar crime
Let’s be specific. What are you actually facing if the public prosecutor and the court find that something was not done in accordance with the law?
The Criminal Code and offences related to asset management and taxes:
- Breach of duty in the administration of another’s property (Section 218 of the Criminal Code): If you are responsible for company assets and manage them in a way that causes, or may cause, damage, this may be classified as a criminal offence. The penalty ranges from a suspended sentence or a financial penalty up to imprisonment for up to 10 years, depending on the amount of damage caused, intent, and other circumstances.
For example, for causing significant damage (from CZK 500,000), you face imprisonment for 2 to 8 years; for damage on a large scale (from CZK 5,000,000), then 5 to 10 years.
If the damage is minor (up to CZK 50,000), it may be an administrative offence. It all depends on the circumstances and interpretation. - Embezzlement (Section 215 of the Criminal Code): You physically appropriate another person’s property that was entrusted to you, with the intention of treating it as your own.
Penalty: up to 10 years’ imprisonment, depending on the amount embezzled. For example, for significant damage (from CZK 500,000), you face imprisonment for 2 to 8 years.
This offence is applied rather exceptionally in the context of tax or accounting crime, but the possibility exists. - Fraud (Section 209 of the Criminal Code): You mislead someone, take advantage of their mistake, or conceal material facts in order to obtain a pecuniary benefit at the expense of another’s property.
In the context of tax fraud, this is a case where you deliberately reduce your tax burden through false invoices, double-entry bookkeeping, etc.
Penalty: up to 10 years’ imprisonment, depending on the amount of damage caused or benefit obtained. For example, for significant damage (from CZK 500,000), you face imprisonment for 2 to 8 years. - Tax evasion, evasion of a fee and similar mandatory payments (Section 240 of the Criminal Code): Anyone who evades tax, customs duty, insurance contributions or another similar mandatory payment on a larger scale (from CZK 100,000), or fraudulently obtains such a payment on a larger scale, will be punished by imprisonment for up to three years or a ban on activity.
For a significant scale (from CZK 500,000), you face imprisonment for 3 to 8 years; for a large scale (from CZK 5,000,000), then 5 to 10 years.
This offence is one of the most common in the area of tax crime.
In practice: If you are in company management and “only” ignored anomalies in the accounting when you should have been aware of them, the court may convict you even without proving intent.
It is enough for the court to find that you had a duty to know and a duty to act.
This is precisely the grey zone where legal theory meets business practice—and where a specialist is essential.
|
Potential issues |
How ARROWS helps (office@arws.cz) |
|
Protection of rights during questioning : The risk is that, due to lack of knowledge, you provide information that the court will later interpret against you |
Attorneys from ARROWS, a Prague-based law firm, will represent you during questioning, be present with you, protect your rights, and advise you when to remain silent and when to speak. |
|
Securing assets : The police authority or the court may freeze accounts and assets, which paralyses the business |
ARROWS, a Prague-based law firm, files motions to lift or mitigate asset freezes and conducts negotiations with judges. |
|
Review of accounting and facts : The public prosecutor interprets accounting records according to their own view; without a defence, it is interpreted solely in the prosecution’s favour |
Attorneys from ARROWS, a Prague-based law firm, analyse accounting files, identify evidence, and prepare counter-arguments. |
|
Strategic decision : Whether to cooperate with investigators, whether to resolve the matter out of court, or whether to proceed to trial |
Specialists from ARROWS, a Prague-based law firm, will advise you on the best strategy at the given stage of the proceedings and prepare you for all scenarios. |
Tax crime and the specifics of anti-fraud campaigns
The Financial Administration and the General Financial Directorate have increased the intensity of anti-fraud audits over the past 2–3 years. This means that the number of criminal reports filed has also increased.
Typically, an anti-fraud operation looks like this: Inspectors focus on a specific sector, examine how companies handle VAT, and identify “anomalies”.
They examine how companies handle VAT, how they issue invoices, how money moves. Then they identify “anomalies”—suspicious behaviour that matches a typical pattern of fraud or tax evasion.
The key point here: An anomaly does not equal guilt. Many entrepreneurs simply do not follow optimal procedures.
They have invoices issued in a way that, although legal, looks non-standard in a control report. They have money transferred outside the usual flow to avoid some administrative burden.
These are mistakes, but they are not always matters that should end up in criminal proceedings.
Without proper legal defence—a specialist who understands accounting, criminal law, and investigative methodology—legal anomalies can easily turn into criminal charges.
Attorneys from ARROWS, a Prague-based law firm, have experience with these cases. They know the typical errors that the General Financial Directorate distinguishes, and the typical patterns that the General Financial Directorate views as questionable. They can tell the difference.
Why managers choose ARROWS
When a manager or company owner is looking for legal representation in criminal proceedings involving economic or tax crime, they usually have several criteria in mind:
- Expertise : Criminal law is a highly specialised field. It is not transferable from general legal practice. ARROWS, a Prague-based law firm, has attorneys who focus on criminal law as their primary specialisation.
- Experience with the corporate environment : ARROWS attorneys understand what it means to be in the position of a responsible corporate officer, rather than a typical criminal suspect.
They communicate with you and develop strategy with your professional position in mind. - Discretion : ARROWS, a Prague-based law firm, does not publicise whom it represents. Your matter will remain confidential in accordance with the law and protected by attorney–client privilege.
- Knowledge of how authorities operate in practice : ARROWS attorneys have extensive experience with the practice of public prosecutors, judges, inspectors, and other parties to the process. In practice, this translates into being able to handle matters more efficiently and sometimes with less drama.
- Insurance : ARROWS, a Prague-based law firm, is insured for professional liability up to CZK 400,000,000.
If an error occurs and causes you damage, you have insurance coverage, which is a reliability factor in criminal proceedings. - Cross-border elements : If your economic or tax crime also involves assets abroad, your partners are abroad, or there are foreign entities involved, ARROWS, a Prague-based law firm, can use the ARROWS International network to obtain legal advice in EU countries and beyond their borders.
Final summary
A manager or business owner who hears that the public prosecutor wants to question them or that a criminal file has been opened usually experiences shock and uncertainty. The instinct is often to “handle it on your own” or consult a lawyer you know. A mistake.
Criminal law in the area of economic and tax crime is a specific field that requires a specialist who understands both the legal system and the logic of business practice. Without the right defence from day one, it is easy to cross the line from a problem into guilt.
The attorneys at ARROWS, a Prague-based law firm, understand this field. They can protect your freedom, your assets, and your reputation. They know how to conduct proceedings to put you in the best possible position, and how to defend you without unnecessary stress or dramatization.
If you are facing suspicion of economic or tax crime, or you know that the tax authorities or police bodies are reviewing you, contact ARROWS, a Prague-based law firm.
The first consultation will clarify your position and how to protect yourself. Contact them at office@arws.cz – discreetly and without unnecessary delay.
FAQ: Most common questions about criminal defence in economic crime
1. Do I have to wait until I receive an official charge, or can I hire a lawyer when there is only “suspicion”?
You should not wait. The moment suspicion arises or a review is initiated is precisely when it is most important to have a high-quality lawyer.
At that point, criminal prosecution has not yet been formally initiated, but the direction of the investigation is already being set.
A lawyer will help you influence how the matter develops, even at the earliest stage. Contact ARROWS, a Prague-based law firm, as soon as possible.
2. Can I refuse to testify?
Yes, as an accused person you have the right to refuse to testify during questioning without worsening your position in any way.
However, you do not have the right to fail to appear for questioning. If you appear, you can choose a strategy and not answer certain questions.
An attorney from ARROWS, a Prague-based law firm, will explain the difference between what you can and cannot do, and which questions it pays to answer with silence.
3. What rights do I have when I am questioned by the police or a public prosecutor?
You have the right to legal counsel during questioning, the right to refuse to testify, the right to have your statement recorded, and the right to refuse to sign the record if you believe it does not correspond to what you said.
You also have the right to comment on all facts alleged against you and to propose evidence for your defence.
The attorneys at ARROWS, a Prague-based law firm, will familiarize you with these rights in practice and protect you during questioning.
They will provide more information at office@arws.cz.
4. Can an attorney from ARROWS help me even if the proceedings are already underway and I have no one with me?
Yes, absolutely. You can engage a lawyer at any stage of criminal proceedings.
If you have already been questioned without a lawyer, it is too late to cancel that questioning, but a lawyer will help you deal with what happened and how to proceed in the next steps.
The attorneys at ARROWS, a Prague-based law firm, will advise you on how to minimize damage and how to protect yourself in future questioning and steps.
5. If I hire a lawyer from the beginning of the proceedings, will it look like I am guilty?
On the contrary. Exercising rights in criminal proceedings is a fundamental right of every suspect and later the accused.
Law enforcement authorities do not interpret the presence of a lawyer as evidence of guilt. In fact, it is a signal that you understand your position and are protecting yourself.
It is absolutely clear to the public prosecutor and the judge that anyone who hires a lawyer is protecting themselves sensibly – not substantively, but procedurally.
6. Can the police freeze my business accounts already during the investigation?
Yes, the court may, upon a motion by the public prosecutor or the police authority, order the securing of assets, including funds in an account.
The aim is to prevent concealment, transfer, or use for further criminal activity, or to secure assets for forfeiture or compensation for damage.
In practice, this means that the funds in the account cannot be disposed of, which poses a huge risk to the business.
The attorneys at ARROWS, a Prague-based law firm, know how to defend against these orders and, where appropriate, how to have them revoked or mitigated.
7. Does the company have to hand over all accounting records and emails requested by the police?
In general, there is an obligation to hand over to law enforcement authorities items that may serve as evidence, including accounting records or electronic communications.
However, there are exceptions, such as documents protected by attorney–client privilege or trade secrets where disclosure would cause disproportionate harm.
An attorney from ARROWS, a Prague-based law firm, will advise you what you must hand over and what you may lawfully refuse, or negotiate the conditions of disclosure.
Disclaimer: The information contained in this article is for general informational purposes only and serves as a basic guide to the issue as of 2026. Although we strive for maximum accuracy, laws and their interpretation evolve over time. We are ARROWS Law Firm, a member of the Czech Bar Association (our supervisory authority), and for the maximum security of our clients, we are insured for professional liability with a limit of CZK 400,000,000. To verify the current wording of the regulations and their application to your specific situation, it is necessary to contact ARROWS Law Firm directly (office@arws.cz). We are not liable for any damages arising from the independent use of the information in this article without prior individual legal consultation.
Read also:
- How to Protect Yourself as a Company Executive in Czechia (Before It’s Too Late)
- AML and KYC Risks for Gambling Operators in the Czech Republic: Avoiding FAU Fines
- Accounting vs Tax Write-Offs of Unpaid Invoices Under Czech Law
- How to Structure Intercompany Agreements in a Holding to Avoid Disputes and Tax Risk
- Contractor vs Employee in 2026: Avoiding Tax Risks in Czechia