By K.C. Vijayan, Law Correspondent

TWO men meet discreetly in a dark carpark of an obscure building, and money changes hands. One man passes the other $20,000, promising that the rest of the $88,000 will be handed over later. The man disappears, and the $68,000 is never handed over.

This happened at the carpark of Kim Seng Plaza one Friday night in August 2007. The missing man: lawyer David Khong, 42, who met his client, Mr Brian Loo, to confess that he had swiped the latter's $88,000 deposit. He even gave Mr Loo a note, acknowledging that he had committed a crime by taking the money. A day after the meeting, though, Mr Khong had already skipped town.

On Monday, a Disciplinary Tribunal appointed by the Chief Justice published its report recommending that Mr Khong be tried by a Court of Three Judges for professional misconduct.

The tribunal, the first set up since the laws were changed late last year to reduce the composition of the tribunal from four to two members, was made up of former judicial commissioner Goh Joon Seng and lawyer Harish Kumar. Mr S. Wijaya prosecuted the case for the Law Society.

The tribunal found that the $88,000 was a 4 per cent deposit paid by a seller for Mr Loo's $2.2 million apartment in Kim Seng Walk. When the lawyer received the cheque in June 2007, he placed it in the office account of his own firm, David Khong & Associates. This was against the rules for how lawyers handle clients' money as the cheque should have been deposited in the client's account instead.

The following month, Mr Khong wound up his firm and joined law firm Sim & Wong. But he did not transfer the $88,000 into either the client's account or Sim & Wong's office account.

The shortfall came to light in August 2007 when Mr Loo complained to the firm about the missing funds at the time the property sale was completed.

It emerged that Mr Khong was riddled with debts amounting to more than $200,000 involving credit card debt, bank overdrafts and loans from friends. His long-time financial difficulties arose from gambling and excessive spending, and the $68,000 was meant to pay off his creditors.

Mr Khong subsequently sent an e-mail message from an unknown source to his firm apologising for his actions. A check with court records showed that he managed to stave off a Citibank bankruptcy petition against him in March 2007 for a $27,000 debt he owed the bank. But five months later, he was made bankrupt for not repaying a $17,000 United Overseas Bank loan.

Hong Kong-based Mr Loo, 47, said it was a 'very big shock' to learn that Mr Khong had run away. 'As a lawyer, it is a small amount for him and it is not worth it as he has lost a career, family and friends. I did not expect him to run away at all.'

Contacted by The Straits Times yesterday, Mr Loo, who is a senior financial markets executive, said he had known Mr Khong for more than a year at that time and was an occasional mahjong-playing partner. He added he was 'disappointed and frustrated' that till today, he has not received any compensation for the $68,000 lost from any quarter. He said he had written to the Law Society a fortnight ago to seek a claim.

The Law Society manages a compensation fund which it may use to help defray losses incurred by a client arising from a lawyer or his staff's dishonesty. For the financial year 2007/2008, the Society paid out some $631,000 from this fund, which all lawyers contribute to annually.

This article was first published in The Straits Times.