A person who knowingly or intentionally exerts unauthorized control over property of another person commits criminal conversion. The element of knowledge is found when the accused person engages in the conduct and he/she is aware of a high probability that he/she is doing so. An essential element of criminal conversion is that “the property must be owned by another and the conversion thereof must be without the consent and against the will of the party, to whom the property belongs, coupled with the fraudulent intent to deprive the owner of the property[i].”
Unlike criminal conversion, the mens rea is not an element and good faith is not a defense in the case of tortious conversion. Conversion, as a tort, consists “either in the appropriation of the personal property of another to the party’s own use and benefit, or in its destruction, or in exercising dominion over it, in exclusion and defiance of the rights of the owner or lawful possessor, or in withholding it from his possession, under a claim and title inconsistent with the owner’s[ii].”
Conversion is also different from unjust enrichment. An unjust enrichment action is based on moral principles and holds that one who has received a benefit has a duty to make restitution to the aggrieved party where retaining such a benefit would be unjust[iii].
Criminal intent is the most crucial element in a criminal conversion action[iv]. The intention or mens rea requirement differentiates criminal conversion from the less serious breach of contract or failure to pay debt crimes[v]. However, this does not mean that the person committing the crime should have actual knowledge of the law regarding conversion, but such person should know the facts pertaining to the crime.
Knowledge coupled with the intentional exertion of unauthorized control forms the crux of the crime of conversion. Exerting control over property means “to obtain, take, carry, drive, lead away, conceal, abandon, sell, convey, encumber or possess property, or to secure, transfer, or extend a right to property[vi].” These factors make the crime more akin to theft. However, the distinguishing factor between a crime of conversion and theft is the degree of knowledge rather than the control factor.
Similarly, conversion of bailed property is a crime[vii]. Thus, if property is bailed by one person to another for a purpose beneficial to both parties and if one party converts the property to his/her own use, such person will be guilty of a criminal conversion[viii].
An attorney tampering with the funds provided by his/her clients will be liable for criminal conversion. Attorneys are bound by the professional code of conduct to safeguard the interests of their clients and have a duty to keep the property of clients and third parties held in a trust separate from their own[ix]. For instance, an attorney who uses his client’s personal injury settlement funds deposited into his trust account to pay operating expenses for his law practice is guilty of criminal conversion[x].”
[i] People v. Fielden, 162 Colo. 574, 576 (Colo. 1967)
[ii] Indiana & Michigan Electric Co. v. Terre Haute Industries, Inc., 507 N.E.2d 588 (Ind. Ct. App. 1987)
[iii] Watts v. Watts, 137 Wis. 2d 506 (Wis. 1987)
[iv] Sam & Mac, Inc. v. Treat, 783 N.E.2d 760, 766 (Ind. Ct. App. 2003)
[v] Gilliana v. Paniaguas, 708 N.E.2d 895 (Ind. Ct. App. 1999)
[vi] Irvin v. State, 501 N.E.2d 1139, 1141 (Ind. Ct. App. 1986)
[vii] Heughan v. State, 82 Ga. App. 640 (Ga. Ct. App. 1950)
[viii] Ford v. State, 144 Ga. App. 599 (Ga. Ct. App. 1978)
[ix] In re Quinn, 738 N.E.2d 678, 681 (Ind. 2000)
[x] In re Clayton, 778 N.E.2d 404 (Ind. 2002)