Frauds

About

Fraud is, in common parlance, knowingly misleading someone or exploiting someone’s mistake for one’s own benefit. Victims of the crime of fraud are both individuals and businesses or financial institutions. Perpetrators often use false data, hide behind straw man or use other sophisticated methods, making them difficult to trace. New and more creative methods of criminals are emerging with the development of technology and new payment instruments, as well as in connection with various anomalies in the market or the world creating ideal conditions for this.

Cryptocurrency fraud is a crime related to cryptocurrencies, including so-called investment fraud. In this type of crime, scammers take advantage of the increased interest in investments in virtual currencies and impersonate investment platforms offering quick and high profits. The scale of cryptocurrency fraud both internationally and in Poland is increasing, with losses in the largest thefts of digital assets amounting to hundreds of millions of dollars (Ronin Network, Japan’s Coincheck and Mt. Gox). In Poland, the most common cryptocurrency fraud is the impersonation of an employee of Binance – the largest cryptocurrency exchange in the world.

Ponzi scheme is a type of investment scam in which existing investors pay out investment returns with capital from new investors. In this type of scam, the scammer profits in the form of commissions on “investments” or simply by disappearing with investors’ funds. Investors are promised a high return with little or no risk. With new deposits from investors, the scammers pay out some of the funds to previous investors and keep some for themselves. With little or no legitimate sources of profit, this practice requires a steady flow of new funds. The scheme collapses when attracting new investors becomes difficult or when too many investors withdraw funds.

Pyramid scheme, like Pozni’s scheme, is based on deceiving unsuspecting people through the promise of substantial income or investment returns, but there are fundamental differences between the two. A pyramid scheme is based on acquiring new people, who in turn will continue to acquire more people and so on. Those at the top of the pyramid reap the greatest profits, and because of their higher earnings, they are able to encourage more people to join. As more people join, a larger sum of money enters the pyramid, which is transferred to those higher up the hierarchy, and those at the bottom lose out. A pyramid scheme can look like the legitimate practice of multi-level marketing also known as network marketing (MLM). What distinguishes MLM from a pyramid scheme is that profits are tied to real product sales and commissions. In the case of a pyramid scheme, profits are tied to the number of people acquired. In Poland, organizing or directing a pyramid-type promotional system is considered an act of unfair competition, which is punishable by imprisonment from 6 months to 8 years.

Our services within this specialization include:

  • legal counseling to compensate for the damage caused by the crime, including the drafting of criminal notices;
  • representation of victimized entities in criminal and criminal-economic proceedings at the preparatory and judicial proceedings stage;
  • support in ongoing contacts with law enforcement agencies and the judiciary;
  • conducting internal investigations in cases of suspected fraud;
  • conducting trainings.

We direct our offer to:

  • entities victimized by fraud, including cryptocurrency fraud;
  • participants in pyramid schemes and Ponzi schemes;
  • companies seeking expert legal assistance in bringing MLMs into compliance with current regulations;
  • companies suspecting fraud in their structures.

How can
we help you?

Contact
the experts

Maciej Zaborowski

Advocate, Managing Partner

Paweł Gołębiewski

Attorney-at-law, Head of International Criminal Law Practice