PEABODY — The man accused of swindling at least $20 million from a family fortune — and using it to buy luxuries like golf memberships and three private planes — pleaded guilty to federal fraud charges.
John "Jack" Doorly, 60, was managing the Tenens Corp., which handled the assets of descendents of Frederick Ayers, a 19th-century patent medicine and textiles tycoon who made his home in Beverly Farms. He was scheduled to stand trial Tuesday on allegations that he embezzled the money.
"He changed his plea yesterday (Monday), right before jury impanelment," said Marc Salinas, his attorney.
Salinas wouldn't say why, or comment further, until after Doorly is sentenced. The sentencing hearing is scheduled for March 23, and he faces up to 20 years in prison for the mail fraud and money laundering charges, followed by three years of supervised release on each count.
The case was investigated by the U.S. Postal Inspection Service, the Internal Revenue Service and the FBI.
Doorly was hired at Tenens Corp. in the mid-1970s and worked his way up to chief operating officer, where he was making $240,000 a year.
In what may be one of the largest embezzlement cases in state history, prosecutors say he swindled the Ayer family through a series of schemes that involved setting up a slush fund by overcharging for administrative and accounting fees — sometimes as much as 60 percent — and siphoning off the difference into a separate account; replacing the accounting firm that had long audited the trusts with a smaller auditing firm, where he withheld documents and gave false information to accountants; and generating false and misleading account statements to send to beneficiaries.
He withdrew the money and bought homes and time shares for himself and his wife, condos for his mistress and his son, three airplanes, and golf club memberships (including one that cost $60,000). He paid "extravagant" credit card bills and invested in real estate developments and businesses controlled by him and his family (including a restaurant run by his son).
A 2008 lawsuit by Tenens against its auditors estimated the theft at $57 million. Prosecutors are seeking the forfeiture of at least $20 million in cash, plus Doorly's time share at the Ritz-Carlton Golf Club and Spa in Florida.
Staff writer Julie Manganis contributed to this story.
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