Fraud and Criminal Charges and Law

Funeral operator slapped with criminal charges

January 17, 2008

The Marion County Prosecutor's Office filed criminal charges today relating to the status of trust funds set aside to pay funeral expenses and cemetery maintenance for a string of Indiana cemeteries.

Robert Nelms, a New Jersey resident who owns Indianapolis-based Memory Gardens Management Corp., has been charged with a series of felonies, including fraud-related violations of Indiana's securities law, theft and conspiracy to commit theft.

Nelms is accused of defrauding the families of deceased Hoosiers of $27 million, according to the Indiana Secretary of State's Securities Prosecution Assistance Unit, which assisted in the investigation.

It charges that Nelms used fraudulent securities instruments similar to corporate bonds to transfer the cash and assets of Memory Gardens' perpetual care fund. The Secretary of State's Office said he hid the money through a variety of complex monetary transfers and used the funds to pay some of Memory Gardens' purchase price, as well as for various personal reasons.

Nelms bought Memory Gardens, which owns and operates cemeteries and funeral homes, in 2004. He is accused of raiding:
-Forest Lawn Memory Gardens Inc. and Forest Lawn Memorial Chapel, Greenwood
-Covington Memorial Gardens Inc. and Covington Memorial Funeral Home, Fort Wayne
-Chapel Hill Associates Inc. and Chapel Hill Funeral Home Inc., Osceola
-Lincoln Memory Gardens Inc., Boone County
-Gardens of Memory, Muncie
-Gill Funeral Home Inc., Washington

Indiana law requires the owner of a private cemetery to provide for the creation and establishment of an irrevocable perpetual care fund. The fund is designed to permanently maintain cemeteries to benefit the community and those who purchase lots there.



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