Theft by conversion occurs when a person lawfully obtains possession to the personal property or funds of another, and then converts the property into funds for their own use and without the person’s permission. This usually occurs in connection with a rental agreement, wherein the owner lends property to the defendant, who then keeps the property without returning it, or sells the property and keeps the profit for themselves.
Theft by conversion is therefore usually dependant on some sort of lease or usage agreement between the owner and the defendant. In some cases, theft by conversion occurs when a person invests funds in a manner that is contrary to the lender’s instructions regarding the funds.
A common example of theft by conversion is when a person obtains possession of a car through a car rental agreement. If instead of returning the car the person keeps the car for themselves, or sells it in an unauthorized manner for profit, they might face charges for theft by conversion.
Again, the key element is that the person obtained possession of the property in a lawful way, but then used it in an unlawful manner for their own gain. This is different from other forms of theft where possession is obtained through force or threats of force (as in armed robbery). Deception is often a main element in theft by conversion.
Some other examples of theft by conversion may involve:
- Other types of rentals, such as home improvement tools (jackhammers, lawnmowers, etc.)
- Appropriation of investment funds for the defendant’s unlawful gain
- Intentionally failing to pay on an account that the defendant is entrusted with to oversee
Generally speaking, the legal penalties for theft by conversion may require that the defendant:
- Return the stolen goods or funds if possible
- Pay damages to reimburse the true owner for loss of enjoyment or loss of use/lost products during the time of the conversion
In some cases, the plaintiff can also recover other costs associated with the violation, such as a loss of wages or profit if the theft occurred in connection with employment or business.
Defenses to conversion may include the consent or approval of the property owner; abandonment of property by the owner; inability to identify the property; or others such as a failure to file a lawsuit in the proper time period (statute of limitations issue).
Theft by conversion occurs more frequently than most people know. However, some people may not be able to recover their losses because they don’t know how to proceed. You may wish to contact a real estate lawyer if you believe that you have a claim for theft by conversion. Your lawyer can help you file your claim, and can represent you in court during formal hearings.