Pismo Beach attorney arrested for grand theft

July 8, 2011

William Peter Terhune


UPDATE: The San Luis Obispo Police Department says investigators have possibly identified additional victims as a result of searches conducted Thursday at Attorney William Peter Terhune’s Pismo Beach office and home.

Terhune is facing charges of embezzlement and excessive taking of over $200,000. Bail was set at $1 million. He is scheduled to be arraigned July 15 at 4 p.m.

Client trust accounts and Terhune’s office bank accounts have been frozen. Client’s needing more information can contact California State Bar Investigators at (213) 765-1731.

ORIGINAL: A Pismo Beach law practice was seized by the State Bar of California Thursday and the attorney was arrested for allegedly stealing more than a quarter-million dollars from a client’s estate.

Law enforcement officers took William Peter Terhune, 57, away in handcuffs as officials from the State Bar began combing through his practice’s records and files.

Terhune is accused of stealing nearly $275,000 from the estate of Junko S. Hensling of which he was the attorney and the administrator. The estate’s sole beneficiary lives in Japan and does not speak English.

Terhune has been an active member of the San Luis Obispo community. According to his website he is a past chairman of the San Luis Obispo County Bar Association’s probate section, and a former director of the association’s board. He was also previously on the board of directors of the San Luis Obispo Chamber of Commerce and the president of the San Luis Obispo Downtown Business Improvement Association.

In the State Bar’s petition to take over Terhune’s law practice, it details 19 bank account transfers from the estate’s account to the attorney’s private business account made between May 2009 and March 2010, according to documents CalCoastNews obtained from the State Bar.

Terhune allegedly dwindled down his client’s account from nearly $300,000 to an ending balance of $1,278, taking out from $4,000 to $30,000 at a time, and sometimes more than once a day.

The estate’s beneficiary says she has not received a single penny.

Even after the attorney was confronted by his paralegal, who discovered the missing funds, Terhune admitted he took the money because “he was unable to get a small business loan,” but he continued to steal money for five more months, according to the State Bar’s petition.

Also at issue is the fact that Terhune has requested and been granted several time extensions to file a final accounting of the Hensling Estate, as required by the courts. Investigators claim Terhune has been lying about the status of the estate to hide the fact that he was using its assets for his own personal use.

As of Thursday evening the attorney was still in county jail so he was unable to respond to the allegations against him.

Terhune has said, in writing, that the funds from the Hensling Estate bank account “were invested over time in various loans as evidenced by promissory notes that will produce a much greater rate of return on the estate’s funds,” the petition says.

The State Bar contends the notes were created only after the misappropriation of funds was discovered and may contain fraudulent dates. Even so, Terhune did not have the probate court’s approval to make the transfers.

The attorney’s former paralegal filed a complaint to the State Bar on behalf of the Japanese beneficiary.

Earlier this year in a response to the complaint, Terhune denied the allegation that he had “misappropriated the funds” and said that all assets of the Hensling Estate “have been held and maintained for the benefit of the estate and will ultimately be distributed to and for the sole benefit of Momoko Sasaki.”

An order filed with the San Luis Obispo County Superior Court on Thursday gives the State Bar of California permission to retain all of Terhune’s file’s, redirect his phone lines to the state bar, suggest clients find a new attorney and with client permission – file motions and other pleadings.

Inline Feedbacks
View all comments

Oh geez, the plot thickens. If he really did these things I just don’t get it. He goes to school for all those years, pays all that money for that education only to risk it all by doing something stupid like this. It just doesn’t make sense.

yeah typoqueen? well people in Hawaii said the same thing about Robert Grigger Jones “How could an attorney commit such a crime, fraud and forgery, lying, oh he would never do that” DUH! He did and not just to OUR family. I feel bad for the family of Mr. Terhune and the embarassment caused them. But using the “I was ignorant” is a lame excuse for an attorney. Jones’ kept saying on the witness stand last year that he “could not recall” that is a lame excuse too. But it worked. Because the judge did not rule in our favor. I feel bad for the family that has been taken advantage. Whether they are out of the country should not matter.


Gotta say, I’m pretty surprised. One of the last folks I would have thought to have done this . . .

“Terhune has said, in writing, that the funds from the Hensling Estate bank account “were invested over time in various loans as evidenced by promissory notes that will produce a much greater rate of return on the estate’s funds,” the petition says.”

Hey this sounds a lot like the excuse used to steal all the money from Social Security… Really the only difference here is the lack of corporate/gov’t infrastructure and B.S. paperwork filing that magically eliminates any accountability.

At some earlier time this paralegal had to faced the prospect of leaving, losing her job and even being blackballed.

I am sure this paralegal consulted with an older more experienced person on what was “the best” or “right” thing to do.

There has to be more to this than turning a blind eye and minding your own business.

A very difficult position for this hard working paralegal to be in.

There are really only a couple of things a crooked attorney can do when business is bad, and money is short. You can either embezzle from your clients, or quit your practice and run for SLO City Mayor.

Well, check out his bio: “He was also previously on the board of directors of the San Luis Obispo Chamber of Commerce and the president of the San Luis Obispo Downtown Business Improvement Association.”

No wonder he is a crook, he has all the right credentials.

Ah yes, the SLO County political machine – it’s operated by such wonderful people. It sure is nice to see one of them get caught.


I can trust you and others (even those that punch back at me when I don’t know better) because you shoot from the hip (right or wrong), but this guy is a polish, articulate and careful shooter (a low class attorney/ politician in silk clothing) they usually get away with things. It took a major undertaking to get the BAR to do anything. Most employees are loyal to their boss, but his paralegal know his real frabic and how he crawls the earth. (nice photo).

Just out of curiosity is this whistleblower going to be fired and have no recourse.

I will give you a job if need be. Won’t pay much but I have been told I am a good and fair boss. I was told that by one of the guys that wants to keep his job.

Hire this guy: James Layman 559/799-3100. Needs a job. Great worker!

Wish I needed someone right now. I would love to help out. What are his talents?

I’d like to see stiffer punishments for white collar crime.

My hats off to the paralegal that filed the complaint.

Me too, that person has risked their future livelihood and I hope they can find a better job-maybe with the state bar in regulating these things. And I wonder why it took five months for the rusty machinery of the Bar to stop the thefts. Our legal system is really a piece of junk in how sluggish it is. And all the legal mumbo jumbo is incredible.

Been that done that, as hard as it is to turn your employer in, right is right and it must be done.

1 2 3