Criminal claim in Civil Trial?

I am a pro se defendant. The plaintiff has produced witness testimonies claiming that I broke into his place of business and removed a "large amount" of property. No police investigation was ever made into this matter, none of these supposed "witnesses" ever called the police, and he is using this as a basis for his claim that items which I possess are his rightful property. All 5 of his witnesses are in business with him. I dropped the ball, assuming this charge and case was too stupid to worry about. I was told today at trial by a mediator that I should consider going bankrupt because the plaintiff is going "to bury you," as he has 5 witnesses. The supposed criminal event in question never happened. Is this sort of testimony even permissible in court? Doesn't there have to be something more than just a witness testimony in this sort of proceeding?