Attorney pleads no contest to theft

A Pismo Beach lawyer accused of taking money from a client has pleaded no contest to felony grand theft by embezzlement.

William Peter Terhune, 57, was arrested in July on suspicion of transferring about $275,000 to his business account from the estate of Junko S. Hensling, which he had been administrating, according to a report filed by the San Luis Obispo Police Department.

Hensling, a native of Japan, was a resident of Los Osos at the time of her death in December 2007, according to a police report. She willed her estate to a sole beneficiary, Momoko Sasaki of Japan.

In October 2009, three members of Terhune’s staff confronted him about missing funds from the bank account belonging to the Hensling estate, according to the police report.

Terhune — who entered his plea Thursday in San Luis Obispo Superior Court — responded that “a business loan he had applied for had not been funded and he needed the money,” adding that he would return the funds to the account, the report stated.

But the staff members told police the money wasn’t returned and that Sasaki had no prior knowledge of the withdrawals from the account.

The report states that Terhune “admitted he did not have $275,000 in cash to repay the notes.”

Following Terhune’s arrest, the California State Bar Association closed his law practice.

He is ineligible to practice law now and faces further disciplinary action from the bar.

His sentencing is scheduled for May 10 in San Luis Obispo Superior Court before Judge Barry LaBarbera. Terhune faces a sentence of up to three years in state prison.