Embezzlement

Conversion is an act that interferes with an owner's right of possession to his or her property. For purposes of embezzlement, conversion involves an unauthorized assumption of the right of ownership over another's property. It may, for example, occur when a person is entrusted with property for one purpose and uses it for another purpose without the consent of the owner. Generally, any type of conversion that occurs after a person obtains lawful possession of property is sufficient.

Although a failure to return property is evidence of conversion, it does not necessarily constitute embezzlement—absent proof of criminal intent. However, if a statute imposes an absolute duty to return property, the failure to do so is embezzlement, provided all other elements are met.

In certain circumstances, a demand is required before a person can claim that his or her property has been converted. Usually, no demand is required if it would be futile, such as when an accused has fled the jurisdiction with the property. If, however, there is no definite time specified for the return of the property, a demand might be necessary. The demand is merely a request that the wrongdoer return the property. The request does not have to be formal, and there is no requirement that the word demand be used.

When an agent is given authority to sell property and thereafter converts the proceeds of the sale, he or she is guilty of embezzlement of the proceeds, as distinguished from the property sold. A person with authority to cash a check but who converts the cash is, likewise, guilty of embezzlement of the cash and not of the check. The person, might, however, be guilty of embezzling the check if at the time of cashing it, the person has a fraudulent intent to convert it.

Intent In a majority of jurisdictions, a fraudulent intent to deprive the owner of his or her property is necessary for embezzlement. It is characterized as intent to willfully and corruptly use or misapply another's property for purposes other than those for which the property is held. The defendant's motive is not relevant to the intent element.

Although it is not essential that the intent exist at the time possession is first taken, it must be formed at the time the property is converted. The offense is not committed if there is an intent to return the specific property taken within a reasonable period of time. If, however, there is a fraudulent intent at the time the property is converted, a subsequently formed intent to return the property will not excuse the crime. An offer to restore the property will not bar a prosecution for embezzlement. Some courts have held, however, that an offer of restoration can be considered on the question of intent.

A person who believes that the property to be transferred is his or hers is considered to act pursuant to a claim of right. The possibility that the belief is mistaken, or unreasonable, is not important. If one has a GOOD FAITH belief that one has a right to withhold property or devote it to one's own use, the conversion cannot be fraudulent, and there is no embezzlement.

The validity of a claim of right is a QUESTION OF FACT determined from CIRCUMSTANTIAL EVIDENCE. It is not sufficient if the person merely states he or she acted honestly. If circumstances evince that there was a willful and knowingly wrongful taking, a claim of right defense will not succeed.