A common element across all theft crimes is the act of taking, obtaining, converting, or appropriating the property of another. But, absent this similarity, several distinct theft crimes exist under the large umbrella of theft crimes generally, such as: theft by taking, theft by deception, fraud, and theft by shoplifting, robbery, and theft by conversion. This aims to explain the crime of theft by conversion (commonly referred to as “embezzlement”), the punishment, and defenses.
Theft by conversion occurs when the defendant, after lawfully receiving funds from another under an agreement to make a specified application of them, knowingly puts the money to his own use in violation of the agreement. O.C.G.A. § 16-8-4(a).
The statute also contains a provision applying to government workers and officers of financial institutions, “[w]hen, under subsection (a) of this Code section, an officer or employee of a government or of a financial institution fails to pay on an account, upon lawful demand, from the funds or property of another held by him, he is presumed to have intended to convert the funds or property to his own use.” O.C.G.A. § 16-8-4(b). This section ensures government and banking actors will act wisely with money entrusted to them by the public.
The stated purpose of the theft by conversion statute is to punish and deter fraudulent conversion, not mere breaches of contract or broken promises. That being said, the terms of the agreement are critical in determining whether an accused converted funds of another from a directed purpose to his own use.
What separates theft by conversion from other theft crimes is that in theft by conversion the person accused comes into possession of the property lawfully, whereas in other theft crimes, the person accused obtains property secretly and unlawfully. In theft by conversion there is some form of entrustment.
Evidence that defendant did not return nor continue making rental payments on two televisions was sufficient to support determination that defendant converted televisions to her own use; defendant violated rental agreements’ obligations to make payments or return televisions to rental center, defendant moved televisions to another address without center’s knowledge or consent in violation of agreements, and center’s owner testified that each television had a retail market value of $649.87. Williams v. State, 328 Ga.App. 898 (2014).
Evidence that defendant failed to return rented wood chipper to store, lied to store regarding his address and phone number, and moved to another country and assumed an alias after store management swore out a warrant for his arrest was sufficient to establish that defendant acted with criminal intent, as required to support conviction for theft by conversion. Terrell v. State, 275 Ga.App. 501 (2005).
Evidence was insufficient to support conviction for theft by conversion, in prosecution arising out of incident in which customer left van with defendant, a mechanic, for repair and van was not returned; there was no evidence that mechanic drove the van, that he cannibalized it for spare parts, or that he used it for any other purposes, except to perform work upon it, there was no evidence that defendant did anything to conceal the whereabouts of the van from the customer or keep her from possessing it, there was no evidence that defendant had anything to do with eventual disposal of van, and defendant did not attempt to flee. Thomas v. State, 308 Ga.App. 331 (2011).
Interestingly, the theft by conversion statute has been held unconstitutional by the Supreme Court of Georgia. In Sherrod v. State, 280 Ga. 275 (2006), the Court held the mandatory presumption contained in statute setting forth offense of theft by conversion of leased property that proof that demand letter was properly sent to lessee and that property was not returned within five days established guilt of offense, was unconstitutional, as it subverted presumption of innocence accorded to accused persons and invaded truth-finding task assigned solely to fact-finder.
Whether theft by conversion will be punished as a misdemeanor or felony depends on the value of the money or property stolen. If the value is less than $500, the offense will be charged as a misdemeanor. If the value exceeds $500, the offense will be charged as a felony. Misdemeanor theft by conversion is punishable by up to 12 months in jail and a $1,000 fine, or both. Felony theft by conversion is punishable by no less than one year in prison and no more than ten years imprisonment. In addition to imprisonment and fines, the court may also impose restitution as part of the sentence.
If the property is not returned, the court will use the following guidelines to assess the value of the stolen goods:
- The market value of the property, determined by obtaining a quote from a supplier who sells property of similar character and value (the higher value of the date the conversion occurred versus the value on the date of trial)
- Rental charges; and
- Interest on unpaid balances at the legal rates until the debtor pays the converted funds
- No intent: the State has to prove the accused person converted the property for their own use knowingly and with fraudulent intent. If there is not such intent, the person cannot be convicted.
- Consent: if the property owner gave the accused person permission to convert the property for the accused person’s own use, evidence of consent (email, text, letter) would provide strong support for the defense.
- The property was used as intended: evidence indicating the property was used in a way contemplated by the agreement would also strongly aid the defense of a theft by conversion charge. There must be an action or statement showing the person accused intended to claim or use the property as their own.
- Value: the State must prove value at trial. If the weight of the evidence attempting to prove value, then an essential element of the charge has not been met, and the accused person cannot be convicted.
- Returning the property is not a defense: the fact an embezzler settled their debt or default does not destroy the criminality of the act. McCoy v. State, 15 Ga. 205 (1854).
If you or someone you know has been arrested and charged with theft by conversion, contact the law firm of W. Scott Smith at 404.581.0999 for a free case evaluation. You’ll a local Atlanta attorney ready to aggressively fight on your behalf.