State v. Lough
2006 WL 1547881, 899 A.2d 468, 2006 R.I. LEXIS 97 (2006)
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Rule of Law:
Fraudulent conversion 'to one's own use' under an embezzlement statute occurs when a person entrusted with property treats it as their own, such as by disposing of it, and does not require proof that the person derived a personal benefit or gain from the act.
Facts:
- Officer Teft confiscated a minibike from a juvenile named Shane, intending to hold it at the police station until Shane could prove ownership.
- John Lough, a fellow police officer, offered to take possession of the minibike and complete the necessary paperwork, placing the bike in his cruiser's trunk.
- Later that shift, while on his way to a repair garage after a minor accident, Lough became aggravated and decided to rid himself of the bike by leaving it behind a dumpster.
- Lough assumed the owner would never return to claim the bike.
- The next morning, Shane arrived with his mother at the police station to reclaim the minibike, which could not be found, prompting an internal investigation.
- When first contacted about the missing bike, Lough told Officer Teft, 'Don’t worry, I’ll take care of it.'
- Knowing the owner wanted the bike back, Lough retrieved it from the dumpster, placed it in his personal vehicle, and gave it to another officer to handle.
- Lough initially misled investigators about the minibike's whereabouts before eventually admitting he had discarded it.
Procedural Posture:
- In August 2003, John Lough was indicted on one count of embezzlement and fraudulent conversion.
- Following a four-day trial in the Superior Court in May 2004, a jury returned a verdict of guilty.
- The trial justice denied Lough's motions for judgment of acquittal and his motion for a new trial.
- Lough, as the appellant, timely appealed the judgment of conviction to the Supreme Court of Rhode Island.
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Issue:
Does discarding property that was lawfully entrusted to a person constitute fraudulent conversion 'to his or her own use' under G.L. 1956 § 11-41-3, even if the person derived no personal benefit from the disposal?
Opinions:
Majority - Justice Flaherty
Yes. A person who disposes of property entrusted to them converts that property 'to his or her own use' within the meaning of the embezzlement statute, regardless of whether they received any personal benefit. The court reasoned that the phrase 'to his own use' means to treat the property as one's own. The decision to dispose of property is a right properly vested only in the lawful owner. By discarding the minibike, Lough usurped the owner's right and treated the property as if it were his own, which satisfies the statutory element. The court distinguished its prior holding in Powers, clarifying that it did not establish a requirement of personal gain, but rather focused on whether the defendant had put the property to his own use. Citing persuasive authority from other jurisdictions, the court concluded that disposing of property is a quintessential act of treating it as one's own, thus constituting fraudulent conversion.
Analysis:
This decision clarifies the scope of fraudulent conversion in Rhode Island by establishing that the 'to his own use' element of embezzlement does not require a showing of personal gain or benefit. It broadens the interpretation of the statute to include acts where a defendant asserts dominion over property in a manner inconsistent with the owner's rights, such as by destroying or discarding it. This precedent makes it easier for the state to prosecute fiduciaries who dispose of entrusted property, as prosecutors no longer need to prove a tangible benefit to the defendant, focusing instead on the unauthorized act of disposition itself.
