Bakhromjon Mukhammadiyev

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1. Introduction

In practice, there are several difficulties in distinguishing the crime of fraud from debt relations. The crime of fraud is committed in various forms; one of them is committed under the guise of a debt relationship. There are two ways to look at the failure of a responsible person to fulfill the obligation in the debt relationship, which is considered a civil relationship: whether the borrower intended to defraud the creditor (fraud), or whether he or she had been in a real debt relationship and was simply unable to fulfill this obligation due to a number of problems.

Misinterpretation of the above two situations will cause illegal and unfair decisions. It is an illegal act to replace a person who failed to fulfill his or her obligations in a debt agreement with a fraudster, and in fact, a person who committed this crime for the purpose of fraud with a person who failed to fulfill his obligations in civil relations. If we consider the fact that the crime of fraud can be committed by falsely entering into a debt relationship, it is important for legislation to distinguish between these two concepts.

The relevance of this issue was emphasized in the seminar dedicated to the essence of the decision of the Plenum of the Supreme Court of the Republic of Uzbekistan on June 23, 2023, “On Judicial Practice in Cases Related to Fraud”. First, Judge B. Imomov emphasized that the purpose of adopting this document is not only to ensure the correct and uniform application of legal norms during the investigation and trial of fraud cases, but also lies in the need to distinguish between a civil legal action and a fraud crime. It was reported that the reasons for 165 criminal cases against 239 persons related to the crime of fraud were analyzed by the criminal courts during the six months of 2023. In the reviewed cases, 163 guilty verdicts were issued against 237 persons, the charges brought by the investigative body against 32 persons had been changed, the indictment against 2 persons was issued in full, the charges against 14 persons were qualified as other matters, and the indictments against 11 persons were qualified to other clauses of this matter, and then verdicts were issued. It can be seen that distinguishing the issues of debt and fraud from one other is of urgent importance for legislation.

Against such background, in this blog post, I have analyzed the issue of distinguishing between the debt relationship and the crime of fraud. My conclusion that while distinguishing these notions, legal specialists should consider some arguments and they need to include the following: 1) whether the responsible person committed a fraud or not; 2) other circumstances that violate trust, when the intention appeared; 3) and finally, whether parties followed the form established by law when entering into a relationship.

2. The Issue of Fraud in the Legislation of Uzbekistan

Article 168 of the Criminal Code of Uzbekistan is about the crime of fraud, and this matter says that the crime of fraud happens as a result of getting another’s property or the right to another’s property by deception or abuse of trust. This issue is explained further in Resolution No. 17 of June 23, 2023, of the Plenum of the Supreme Court (“On Judicial Practice in Cases Related to Fraud.”) According to this resolution, deception in fraud is defined as the reporting of false information by the perpetrator, knowingly, which is not true, or deliberately concealing or misleading the actual facts that should be communicated to the owner or other owner of the property. Deliberate actions here mean that the person who committed the fraudulent act realizing the social danger of their actions and intending to proceed.

In fraud, false information includes information about any circumstance that can lead to misleading the victim; for instance, it may include legal facts and events, the quality of the property, the price, the identity of the perpetrator, his or her intention, his/her authority (for example, the guilty person pretending himself to be an official or an employee of a law enforcement agency or an entrepreneur operating on legal grounds, etc.).

In fraud, abuse of trust should be understood as the use of the trust relationship with the owner of the property for malicious purposes. Abuse of trust can be caused by various circumstances, for example, the official position of the guilty person or his/her personal or family relationship with the victim.

3. The Role of Bad Intent in Distinguishing Between Debt and Fraud

3.1. Entering into a debt relationship with a bad intent

Bad intent means that a person, although he/she realizes the socially dangerous nature of their act, wants to commit it. Bad intent should be qualified as a fraud if it occurs before the acquisition of another’s property or the right to it. Because in this case, a person acquires ownership and property rights in relation to someone else’s property with the bad intention of not fulfilling his obligations; that is, the person taking a loan from the beginning does not have the intention to repay the loan.

3.2. Having a bad intent after entering into a debt relationship

If such an intention arises after entering into a debt relationship, it is considered neither a debt nor a fraud; that is, in this case, another crime—the crime of embezzlement. For example, illegally transferring the property legally given to a person for the purpose of operational management to his or another person’s ownership without paying for it.

3.3. Failure of a person to fulfill his obligation even if there is no bad intention

The main difference here is the subjective side: were there bad intentions to fulfill the obligation, and when did it occur Everyone knows that the subjective elements of criminal liability are some of the most difficult concepts to understand. If a person fails to fulfill his/her obligations based on a written agreement (loan agreement, receipt, letter of guarantee, etc.) due to a serious change in the underlying situation (serious illness, emergency) or the presence of a bad intention to take possession of someone else’s property (for example, despite the fact that the borrower has funds, he/she deliberately refuses to repay the debt if it is not possible to prove that it was carried out), such cases are evaluated as the disputes arising from civil-legal relations and are resolved in the procedure of civil and economic court proceedings.

4. Conformity of the Contract Between the Parties to the Requirements of the Law When Distinguishing Between Debt and Fraud

Agreements made in accordance with the requirements of the law are not considered fraud. Because in this case, the responsible person acted according to the law without using any deception while concluding the contract. Thus, in the case of non-fulfillment of obligations arising from civil-legal relations based on a legal agreement, it cannot be considered fraud due to the absence of signs of illegality in the acquisition of property of other people. Because if a person takes a loan and intends not to repay it, he/she would not formalize the case in the form established by the law because it would cause the case to be heard in a civil court in the future.

It should be understood from the decision of the Plenum that a loan agreement that is not concluded in accordance with the requirements of the relevant legislation is an indication that the crime of fraud may exist. The reason is that if there is a legally concluded contract between the parties, in case of non-fulfillment of the terms of the contract, the violated right can be restored in civil or economic proceedings that have sufficient legal methods to ensure the performance of obligations. On the other hand, in the case of debt contracts concluded without observing the established procedure, the borrowing party can encourage the lending person to enter into his trust and not conclude the legal contract, which should actually be written or notarized, in order to fulfill his intention of not fulfilling the obligation.

Therefore, in all cases where the civil-legal agreement concluded in accordance with the requirements of the law do not contain signs of a crime, the dispute should be considered by the court on civil and economic affairs, but not as fraud.

Here, I will introduce a court case related to the topic. Z. Rasulov, who chaired the criminal court, handled the criminal case number 1-1609-2301/193 against M. Ibodatov at the open court session of the Uchkurgan District Court on January 5, 2024.

The defendant M. Ibodatov tried to acquire another person’s property by deception and abuse of trust. He introduced himself to A. Rahimov and I. Kazakov as the manager of the farm, and he received 7,200,000 soums from A. Rahimov and 4,170,000 soums from I. Kazakov, saying that he would give wheat in a harvest season. M. Ibodatov wrote about these in a receipt. But once the wheat was harvested, M. Ibodatov failed to fulfill his obligations and ran away. In addition, M. Ibodatov continued his criminal act and introduced himself to Sh.Ismailov as the manager of the farm, and asked to give him 2,100,000 soums worth of drugs for defoliation, and promised to return these funds after two days. Sh. Ismailov received a receipt from M. Ibodatov. It turned out that M. Ibodatov, after receiving the medicine, sold it for 1,785,000 soums, used the money for his own needs, and ran away without fulfilling his obligations.

Z. Rasulov, Judge of the Uchkurgan District Court for criminal cases, gave a legal assessment of this situation. And evaluated the actions of M. Ibodatov as obtaining someone else’s property by deception and abuse of trust. M. Ibodatov was sentenced to three years of imprisonment using clause “b” of Article 168, Part 3 of the Criminal Code. In addition, it was decided to collect 7,200,000 soums from the defendant M. Ibodadov in favor of the victims A. Rakhimov, 4,170,000 soums in favor of I. Kazakov, and 2,100,000 soums in favor of Sh. Ismailov.

In this case, the parties formalized the transaction with receipts, as mentioned in Part Four. Therefore, those receipts could be equated to a written agreement according to Article 107 of the Criminal Code, and according to the 2023 Resolution of Supreme Court this could be evaluated as a debt issue. Nonetheless, the reason why this was not done is that there were signs of a crime in the person’s actions. That is, in this case, the criminal’s intention appeared before committing the crime, as we have shown in Part 3.1., and that false information (depict himself as a farm manager) starts his illegal activities, as we have emphasized in Part Two. The court took into account these aspects and assessed the situation as a fraud.


In this blog post, I have discussed the issue of distinguishing the crime of fraud from the debt relationship. During the analysis, based on various legal sources and judicial practice related to debt relations, I came to conclusion that following elements shall be taken into account in the process of distinguishing between two aforementioned issues: the question of whether the responsible person has committed fraud or whether other circumstances are at play that violate trust, as well as when the intention appeared, and the form established by law when the parties entered into a dispute. It became clear from my analysis that formalizing the relations of citizens with other persons with a legal contract prevents them from being deceived by fraudsters. I hope that future court practices will shed more light on such types of cases.

Cite as:  Bakhromjon Mukhammadiyev, “Distinguishing the crime of fraud from the debt relationships”, Uzbekistan Law Blog, 16.05.2024.