By Derek Brooks
VIENNA, June 6 (Reuters) - A journalist critical of Austria's record in returning Jewish property seized by the Nazis failed on Friday to gain his freedom after conviction on charges he defrauded the state in illicitly increasing his mother's claim on a building.
Disappointed at an appeal ruling, allies of Stephan Templ shouted "Nazi state" and "Aryanization" at judges in a crowded courtroom. Templ, who co-wrote a book in 2001 listing Jewish properties looted by Austrian Nazis and never returned, alleges Austria is punishing him for his criticism.
"I must now fight this ruling in Strasbourg with the European Court", Templ, 53, said. "That is the only way left."
The court cut Templ's prison time on Friday to one year with two years suspended sentence from the original three years behind bars. He currently lives in Prague.
"Even the main judge said this case is a dilemma, that the verdict is not correct, that Austria is not damaged. And I still get one year in jail. This is ridiculous," he said.
In April 2013, the architectural historian was sentenced to three years jail on charges he deliberately ommitted his aunt from a list of rightful owners to be contacted in a restitution claim for a building near Vienna's famous Ringstrasse. As a result, the court found, the aunt was not informed of her right to claim and his mother's share was doubled.
The state argued that the aunt, Elisabeth Kretschmer, would have had the option of relinquishing her stake in the building, seized from its Jewish owner after Germany's 1938 annexation of Austria. This share, wrongfully taken by Templ's mother, would then have been subject to claim by the state.
Templ's mother got a twelfth of the building's sale price, a portion worth about 1.1 million euros ($1.5 million).
Templ, who had been estranged from his aunt for 30 years, argued that not mentioning the aunt was a mere oversight.
Kretschmer learned in 2011 - two years after an arbitration panel returned the building to dozens of relatives including Templ's mother - that she had missed a deadline to claim a stake in the property, and went to Vienna prosecutors.
($1 = 0.7345 euros) (Editing by Ralph Boulton)