There is a particular kind of failure that haunts every entrepreneur: the deal that goes wrong, the debt that cannot be repaid, the contract that unravels despite the best of intentions. In Poland’s criminal courts, the line separating such ordinary commercial misfortune from fraud—a crime carrying up to eight years in prison—is often distressingly thin. Understanding where that line falls may be the most consequential legal knowledge a business owner can possess.
The governing principle, at least, is clear enough: failure to pay a debt does not, by itself, make anyone a criminal. Fraud requires something more—a intent to deceive that existed at the very moment the obligation was undertaken.
The Architecture of Fraud
Polish criminal law constructs fraud from three interlocking elements, all of which must be present for a conviction.
First, the perpetrator must mislead the victim—or exploit a pre-existing misunderstanding—about some material fact. This can be an outright lie, but it can also take subtler forms: the strategic omission of crucial information, the failure to mention that one’s assets are already encumbered by creditors, the silence about a company’s true financial condition.
Second, this deception must cause the victim to make a disadvantageous disposition of property. Critically, Polish courts have interpreted “disadvantage” broadly. Actual financial loss is not required. It is enough that the victim’s position has worsened in some meaningful way—that repayment has been delayed, that the risk of non-recovery has increased, that terms have been extracted which the victim would never have accepted had the truth been known.
Third, the perpetrator must act with the specific intent to obtain an unlawful financial benefit. This is not mere recklessness or wishful thinking. The law demands what it calls “direct intent”—a conscious purpose to gain at another’s expense through deception.
The Irrelevance of the Victim’s Naivety
One might suppose that a victim who fails to conduct basic due diligence—who accepts representations at face value, who neglects to verify a counterparty’s creditworthiness—bears some responsibility for being deceived. Polish courts have consistently rejected this notion.
The Supreme Court has held, repeatedly and emphatically, that a victim’s credulity provides no defense to a fraud charge. It does not matter that the deception was transparent to anyone paying attention, that the lies could have been exposed with minimal effort, that the victim was, in the court’s words, “uncritical and gullible.” The only relevant question is whether the perpetrator’s misrepresentation caused the victim to part with something of value.
This doctrine carries a reassuring implication for honest businesspeople: the law protects even those who trust too easily.
When Late Payment Crosses into Criminality
The most vexing cases involve debtors who simply fail to pay on time. When does commercial default become criminal fraud?
The answer lies in timing and intent. If a debtor, at the moment of entering into an obligation, already knows—or believes—that performance will be impossible, and conceals this knowledge to extract value from the creditor, the elements of fraud are satisfied. But if the inability to pay arises later, from circumstances unforeseen at the contract’s formation, no crime has occurred regardless of how badly the creditor is harmed.
Courts look to various circumstantial indicators to determine whether fraudulent intent existed from the outset:
A debtor who lacked funds and had no realistic plan to obtain them—who spoke vaguely of “investment opportunities” without any concrete prospect of revenue—invites suspicion. So does one who immediately resold goods below cost, or who diverted loan proceeds to purposes wholly different from those represented, or who had been struggling for months to meet existing obligations while simultaneously incurring new ones.
None of these factors is conclusive in isolation. A pattern of optimistic assumptions, even unrealistic ones, does not establish criminal intent if the debtor genuinely believed success was possible. The law punishes deliberate deception, not mere foolishness or poor judgment.
Conversely, subsequent repayment does not automatically negate a finding of fraud. A debtor who fully intended, at the contract’s formation, never to pay—but who later changed course, perhaps because of unexpected good fortune or fear of prosecution—has still committed a crime, even if the victim ultimately suffers no loss.
Judicial Fraud: Using the Courts as Instruments of Deception
A particularly sophisticated form of fraud involves manipulating the judicial system itself. A plaintiff who files suit based on fabricated evidence or perjured testimony, seeking a judgment that will transfer another’s property, commits what Polish law recognizes as “judicial fraud.”
In such cases, the court—empowered by law to order dispositions of property—becomes an unwitting instrument of the crime. The victim is the party whose assets are wrongfully seized; the deceived party is the judge who, acting on false information, issues the order.
Can One Defraud a Fraudster?
A curious question arises: does the law protect victims who were themselves engaged in illegal activity? If someone pays a bribe to secure a government contract that never materializes, or transfers money to a supposed fixer who promises to make criminal charges disappear, can they claim to have been defrauded?
Polish courts have generally answered yes, holding that the law contains no requirement that the victim’s purpose be legitimate. This position has its critics, who argue that courts should not become instruments for settling disputes among criminals. A recent appellate decision in Warsaw offered a more restrictive view, declining to find fraud in the context of drug-trafficking disputes on the ground that “the law protects social goods, not criminal transactions.”
The tension remains unresolved—a reminder that even well-established legal doctrines can fray at their edges when confronted with sufficiently perverse facts.
The Confluence of Crimes
Entrepreneurs should understand that fraud charges rarely arrive alone. A business owner who obtains a bank loan by misrepresenting the company’s financial condition may face not only common fraud charges but also the specialized offense of “financial fraud” under separate provisions of Polish law—a cumulative exposure that can dramatically increase both complexity and potential punishment.
The evidentiary burdens differ between these charges. Financial fraud focuses on the falsity of the representations made to obtain credit; common fraud requires proof that the borrower never intended to repay. A prosecutor who cannot establish the latter may still secure conviction on the former.
The Lesser Offense
Polish law recognizes a “minor case” variant of fraud, applicable when the circumstances—the value involved, the sophistication of the deception, the degree of harm—warrant reduced punishment. In such cases, the offense is treated as a misdemeanor rather than a felony, with correspondingly lighter sanctions and the possibility of conditional dismissal.
Practical Implications
For the creditor considering whether to pursue criminal charges: the mere fact of non-payment will not suffice. You must be prepared to demonstrate that the debtor harbored fraudulent intent at the moment the obligation was created—a showing that requires evidence of the circumstances surrounding the transaction’s formation, not merely its unhappy conclusion.
For the entrepreneur facing suspicion: the critical question is what you knew and intended when the deal was struck. Subsequent business reversals, even those attributable to your own poor judgment, do not establish criminal liability. The defense lies in demonstrating that, at the relevant moment, you believed performance was possible and intended to deliver.
For everyone: the law’s gaze is fixed on the contract’s formation, not its failure. Intent must precede the act; it cannot be imputed retroactively from unfortunate results.
Skarbiec Law Firm provides comprehensive legal assistance in commercial fraud matters—representing both entrepreneurs who have been victimized and those who find themselves wrongly accused.
Current as of December 2025
