LAWRENCE — The allegations that led to the disbarment of once-prominent Lawrence attorney Arthur Khoury in January now threaten his freedom.
Lawrence District Court First Justice Thomas Brennan yesterday issued a summons ordering the former president of the Lawrence Bar Association to appear in court Tuesday to face a charge of larceny over $250 — for allegedly stealing more than $77,000 of clients' money.
If convicted, Khoury, 68, of 15 Bunkerhill St., Lawrence, could serve time in the county jail or receive a sentence of up to five years in state prison and be fined up to $25,000.
Khoury, a former state representative from Lawrence, practiced law for more than 43 years before his July 2007 suspension for allegedly bilking money from the estate of George Abdallah of Methuen, who died in August 2004.
Instead of settling the estate so it could be distributed to family members, investigators said Khoury diverted the money for his own personal and business use.
Attempts to reach Khoury for comment yesterday were unsuccessful. Nobody answered the door at the two-story, wooden shingled house on Bunkerhill street, nor did anyone respond to a note left on his doorstep.
Lawrence police Chief John Romero confirmed yesterday that the criminal prosecution of Khoury stemmed directly from the investigation conducted by the state's Office of the Bar Counsel and the resulting disciplinary action recommended by the Board of Bar Overseers.
"The Lawrence Police Department was forwarded the file involving Mr. Khoury from the district attorney's office for criminal investigation," said Romero, who noted that the Office of Bar Counsel had initially referred the matter to Essex County District Attorney Jonathan Blodgett's office.
Romero said an investigation by Detective Sgt. Michael Simard determined "a misappropriation of estate funds, entrusted to Mr. Khoury, for his own use, for which we sought a criminal complaint against Mr. Khoury with the Lawrence District Court," the chief said.
Abdallah, a Lawrence native, owned and operated George's Florist in Methuen Square for 50 years before retiring in 2003. Less than two months before his death a year later, he had his last will and testament drawn up by Khoury, who was retained by the family to probate the will after Abdallah's death.
Formal complaint filed
Frustrated that the estate had remained unsettled for nearly three years and that Khoury had failed to return numerous telephone calls, the estate's executor — Louis M. Lahoud Jr., of Danbury, Conn., a nephew — gave the attorney an ultimatum if "a reasonable action plan" was not taken by May 29, 2007.
When Khoury didn't respond, Lahoud filed a formal complaint with the Office of the Bar Counsel charging that the attorney "has conducted himself inappropriately."
An investigation by the Office of Bar Counsel concluded Khoury had engaged in professional misconduct that warranted disciplinary action by the Board of Bar Overseers.
"Between about October and December 2005, without the knowledge or authority of Mr. Lahoud or the beneficiaries, the respondent withdrew all the Abdallah estate funds from the client conveyance account, commingled some of the funds with his own funds, and applied all the funds to pay unrelated business or personal obligations," Assistant Bar Counsel Susan Strauss Weisberg wrote last August in her petition for discipline.
"The respondent thereby converted the estate funds of $77,285.34 to his own use. The respondent misused the estate funds intentionally, with the intent to deprive the beneficiaries of their funds at least temporarily, and without actual deprivation of the beneficiaries resulting," Weisberg wrote.
On the occasions when Khoury did respond to his clients, he "misrepresented to Mr. Lahoud and the beneficiaries that he was working on the estate in preparation for distribution of the estate's funds," Weisberg wrote, also noting that Khoury failed to deliver a diamond ring to Lahoud.
After his temporary suspension last summer, Khoury did give the ring to Lahoud.
No attempt to make restitution
But despite demands from Lahoud and bar counsel, Khoury never accounted for his use and disposition of the money, Weisberg said. Her report persuaded the Board of Bar Overseers to recommend Khoury's disbarment last November. The state's Supreme Judicial Court disbarred Khoury on Jan. 16, retroactive to Aug. 14, 2007.
Khoury has never attempted to make restitution, investigators said.
But in March, the Supreme Judicial Court's Clients' Security Board awarded the beneficiaries of George Abdallah the $77,585.34, which includes interest, to which they were entitled. Lahoud and other family members could not be reached for comment last night.
In addition to serving as president of the Lawrence Bar Association, Khoury has held several appointments in local government, including memberships on the Lawrence Housing Authority and the Zoning Board of Appeals.