What is Theft by Swindle in Minnesota?

Theft by Swindle is defined by Minn. Stat. Ann § 609.52 Subd. 2(4) as swindling, whether by artifice, trick, device, or any other means whereby a person obtains property or services from another person.

Have any Minnesota cases elaborated on the definition, elements, tests, or scope of Theft by Swindle?

Minnesota has three main cases concerning theft by swindle.  The first case in State v. Lone, 361 N.W.2d 845 (1985).  In this case, a contractor offered waterproofing services to basements, made guarantees of the waterproofing techniques, used sub-standard materials to do the waterproofing, and ultimately, water leaked through into the basement.  In this case, the quality of the work was only a small issue.  The larger issue involved the sales method the contractor was using.  Essentially, a salesman went door-to-door selling this service.  If the homeowner didn’t buy, the company sent out a “chief inspector” dressed in an official looking uniform to inspect the basements of the homes.  The “chief inspector” would then apply a high-pressure sales pitch to the homeowner which would ultimately entice the parties to enter into a contract.  The contractor would then do the work in a substandard way and the homeowner was out his money.

The next case involves a car dealer from Duluth.  In the case of State v. Ulvestad, 414 N.W.2d 737 (Minn App. 1987) a used car dealership would obtain vehicles from auctions, roll back the odometers, alter the titles to reflect the lower mileage, and sell the cars at a price that a lower mileage vehicle would sell for – not at a price that reflected the vehicle’s actual mileage.  The defendant in the Ulvestad case argued that many of the vehicles he had rolled back the odometer on, he had not sold.  The Court held “A person is guilty of the attempted commission of a crime when the person ‘with intent to commit a crime, does an act which is a substantial step toward, and more than preparation for, the commission of the crime.”  Here, merely altering the vehicles with the intent to sell them made the defendant guilty – not actually the act of selling them.

The final case that is relevant is more of a distinguishing case.   In State v. Flicek, 657 N.W.2d 592 (Minn. Court. App. 2003), the Court held that swindling requires a showing of affirmative or fraudulent behavior.  In this case, the city of Elko, MN would assess any delinquent balances of residents’ water bills to the residents’ property taxes.  The city’s treasurer and a city counselor were both delinquent on their respective water bills.  The treasurer omitted these delinquencies from the audit and neither the treasurer nor the counselor were assessed.  Over a number of years, each had an outstanding balance of thousands of dollars each.  A later audit discovered these discrepancies and each were charged with theft by swindle.  The Court held that the charges were not appropriate in this case because the state failed to provide evidence that wold be necessary to prove all of the elements of the crime.  The Court held that theft by swindle requires the intent to defraud, and inherent in the intent requirement is that a swindler must act affirmatively to defraud another.  Even though the city treasurer and the council member abused their positions of authority by failing to disclose the delinquencies; neither the treasure nor council member received utility services by deceit because their billings were accurately noted in city ledgers and neither indicated that they had paid their bills when they actually had not.

What are the potential consequences of being convicted of Theft by Swindle?

Depending on the value of the property or services that were allegedly swindled, the punishment varies.  For cases involving the swindling of an amount greater than $35,000, the punishment is 20 years in jail or a fine of not more than $100,000.  In cases where the amount swindled is more than $5,000 but less than $35,000, the punishment is 10 years in jail and/or a fine of $20,000.  When the value of the property or services swindled between $1,000 and $5,000, it is discretionary but it is possible to receive 5 years in jail and a fine of not more than $10,000.

If the swindle involves explosive devices, illegal drugs, or trade secrets, the fines may be different from what is described above.

What elements must the government prove to convict someone of Theft by Swindle?

In order to be guilty of theft by swindle, a person must show two things: (1) that a person had the intent to swindle another; and (2) that affirmative measures have been taken to defraud or cheat someone out of property, money, or an instrument by means of some false or deceitful pretense, device, or fraudulent representation with the intent to appropriate the property, money, or benefit of the services to the defendant’s use.

Remember, according to the Flicek case, if you fail to disclose something, although possibly unethical, it does not amount to theft by swindle because you have not told someone you did something when you actually had not.

What are defenses to Theft by Swindle?

There are two legitimate defenses to theft by swindle.  (1) You didn’t have an intent to swindle the money.  If you can show through your actions that you didn’t plan for the victim to not obtain the value of the services or money paid or you didn’t have an ongoing and continual operation or scheme, it will be difficult to prove this necessary element to the crime.  (2)  you didn’t receive the value of the property or services by deceitful means.  This means that you never represented to someone that they were getting more than you had actually intended to give them, or that you never intended to pay for goods or services someone gave or performed for you.  Many times, the defenses hide in the ambiguities of the agreement.

What is an example of Theft by Swindle?

A few examples that immediately come to mind:

a) Writing checks on a closed account.  Once upon a time, technology that could easily verify the validity of a check tendered for merchandise was not readily available or accessible to merchants.  A person could make off with thousands of dollars worth of merchandise from several different merchants before any of the checks would be returned by the bank as “NSF.”

b) Repeatedly selling someone goods that you have represented as being more than what they actually are.  For example, if you sell watches that you represent as being genuine Rolex watches, charge the customer for a Rolex watch, but later inspection reveals that the watches are cheap knock-offs from China, you could be charged.

c) Using a false pretense to sell someone a legitimate product.  For example, if you pretend to be a home inspector and you go around to houses telling the homeowner that they have a serious problem with their foundation when, really, there is nothing wrong with the foundation, and you do this to entice the homeowner to obtain your company’s services for the repair, you could be found guilty of theft by swindle.

Are there any famous Theft by Swindle criminals or news stories?

Is there anything else I should know about Theft by Swindle?

Many times, theft by swindle cases result from overly aggressive prosecutors.  Make sure that the prosecution can prove every single element of the crime and that it has enough evidence to back up their claims.  Increasingly, prosecutors are taking what should be a civil action for a breach of contract, and attempting to prosecute them as criminal offenses.  This is especially true in the case of an ambiguous contract.  For example, if you contract with a mechanic to have a different engine put in your vehicle, look at the contract.  The contract might say “new 300 horsepower diesel engine.”  Now, you might think you are getting a 2009 model year engine, but you wind up with a model year 2005.  Both engines are the same horsepower, perform the same, it’s just that one is newer.  Nonetheless, you’re upset.  Is this a theft by swindle?  Highly unlikely.  Courts will look at a few factors (1) did the customer pay a reasonable value for a 2009 engine, or was the price paid by the customer closer to the reasonable value of a 2005 model?  (2) What did the two parties contract for?  Did they contract for “just an engine” or was the type and year of the engine specific?  (3) How often does this happen?  What is the frequency of disputes with this mechanic?  Does every other customer complain about getting defrauded, or is this occurrence a rare one?

Always know what you’re getting into.  If you contract with someone, don’t rely on someone’s word to clear things up.  Get it in writing.  This will clear things up and help decide whether you are in the right court (civil or criminal).  Make sure that all elements can be proved against you.  If not, the charges should be dismissed.

Finally, make sure that, if charged with theft by swindle, you are being charged appropriately.  Many times, you should be charged with petty theft or larceny.  This wholly depends on the facts of each case.

How Much Does It Cost?

Each situation has its own complexities and there are many aspects to discuss to understand the details of your situation and advise you accurately. We have an experienced attorney here who would be happy to analyze your situation’s circumstances and advise you of your legal rights and options. This can generally be accomplished during a one-hour meeting (which can be by phone). Our fee for a one-hour meeting is $300. Work beyond that initial hour is at usual hourly rates. We do not offer free consultations on this type of work.

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  • Cindy
    August 3, 2014, 12:42 am

    Knowingly gave a “boyfriend” access to my credit card for the purpose of him to come to MN for Christmas to be w/ his 4 of 6 children. He rented a car for weeks to a total of over $2k, all w/ the understanding that he pay me back since he was employed in ND as a truck driver & made good money but no credit cards. He never did go back to ND & never paid me a dime. I then find out he charged things to pay others off. Brought people on shopping sprees, bought hundreds of dollars of meat & in one particular case, had a woman’s car repaired as a payback to her brother. That’s the transaction that brought all of this to my attention because when I disputed it w/ the credit card company they came back w/ paperwork w/ her signature on it. Is there any recourse against this creep or am I at fault for trusting him in the first place?

  • jack poucher
    March 6, 2013, 4:35 pm

    What is the sentence for first offenders on MN for Theft by Swindle over $35,000? If the swindle is $100,000 with 50 checks stolen, what is the sentence for first offenders in MN?

  • Kurt
    June 22, 2012, 6:23 pm

    Thompson Hall Santi Cerny & Dooley. They spent time to read my legal questions and responded with very professional advise; Thank You !