NORTH ANDOVER — Alfred Perry took $28,295 given to him by various clients of his insurance business and converted it to his own use, all the while allowing the clients to believe they were insured, prosecutor Emily McClain said yesterday.

And it was Perry's sons, Marc and Darryl, also in the insurance business, who brought the thefts to the attention of police and triggered the investigation, according to court documents.

Perry, 56, a former chairman of the North Andover School Committee, was arraigned yesterday in Lawrence District Court on six counts of embezzlement by a broker, six counts of larceny over $250, six counts of misdemeanor insurance fraud by an insurance agent or broker, forgery of a check and uttering a false document.

The charges arise from the police investigation of Internet Insurance Agency, based on complaints from six customers who said they were cheated out of their money.

According to court records, Perry used the money to pay personal gas, telephone and credit card bills.

Perry's sons told police they had established Perry Insurance in February but continued in the same office as Internet Insurance.

The sons told police the lease had not been paid to the landlord for months and the business was about to be evicted from the 522 Chickering Road office.

They told police they made an agreement with the landlord to assume the lease payment even though their father's name was on the lease.

Darryl Perry told police they had a discussion with his father in May and agreed that Perry Insurance would maintain the books and assume all of the previous clients, agreeing at the time to pay their father 35 percent on a month-to-month basis with the understanding they would draft a formal agreement to take ownership.

Alfred Perry rejected an offer by his sons to hire a CPA to audit the books to determine a fair value for the company, has inflated the value of the company and has delayed the official transfer of the company "so that he may obtain what he can from the company now," according to police reports filed in the case.

The sons told police they were made aware their father was personally obtaining checks made out to Perry/Internet Insurance from customers and cashing them with the customers' belief their carriers would be paid with the proceeds.

Alfred Perry kept the money instead, police said.

On Aug. 13, the sons told police they were aware of two customers totaling more than $4,000 who claim they paid Alfred Perry, but had received notifications their insurance was about to cancel or their policies were never established.

In addition they told police other customers were surfacing alleging they paid Alfred Perry and their insurance was about to be canceled.

The two sons have been working with the customers to continue their insurance coverage.

In one case, Perry allegedly took $9,600 from a cousin to pay for a $1.2 million flood insurance policy at their Osterville home. Perry deposited the check into the Internet Insurance Agency account, then fabricated an insurance certificate using an active policy number that was in another person's name.

The sons told police they believe their father omitted the original policyholder's information and added his cousin and his wife as the policyholders.

Marc Perry told police $250,000 is the most flood insurance that can be purchased, yet their father wrote a $1.2 million policy for his cousin.

According to the charges filed in the case, Alfred Perry:

Accepted $7,739.30 from a company for liability coverage, but did not pay the carrier.

Accepted $4,279 from a condominium association for liability coverage, yet paid the carrier nothing.

Accepted $1,517 for homeowner's insurance, but paid nothing to the insurance carrier. The homeowner discovered he was not insured after his home was struck by lightning and he filed a claim.

Accepted a $455 check from the Federal Emergency Management Agency, which was to pay a refund to a couple, cashed it and kept the money.

McClain told the court that federal officials had been notified of the FEMA check incident and may conduct their own investigation.

She acknowledged Alfred Perry's lack of a criminal record, but asked that the court set $10,000 cash bail.

Attorney Joanne McLaughlin, appointed for the purpose of arguing bail only, told the court Perry was unemployed and had not worked in some time and asked that Perry be released without bail.

She also told the court that Marc and Darryl Perry had not lived up to their agreement to pay their father the 35 percent a month they had agreed to.

Judge Thomas Brennan set $2,000 cash bail and ordered Perry to return to court Oct. 31, for a pretrial hearing.

Perry's wife and brother were in the courtroom for the proceedings but declined comment after the arraignment.

McLaughlin also declined comment.

The investigation continues, officials said.