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Cemetery owner to plead guilty to theft, fraud

Scott Olson
July 30, 2009
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A cemetery owner set to go on trial Monday has agreed to plead guilty to theft and securities fraud.

The plea agreement signed in Marion Superior Court by Robert E. Nelms, 40, allows him to avoid prison and instead serve an eight-year sentence through community corrections programs and two years of probation.

Nelms also could repay millions to the raided trust accounts of Memory Gardens Management Corp., which is under the control of a court-appointed receiver.

Marion County prosecutors charged Nelms and his wife Deborah Johnson, 49, in January in a scheme that they said siphoned away $24 million set aside to maintain the graves of people who had paid in advance for their funerals.

Prosecutors dismissed all the charges against Johnson earlier this week after she agreed to testify against Nelms.

The couple bought the Indianapolis-based cemetery and funeral home business for $27 million in December 2004.

Within days, the couple allegedly drained all $24 million from their newly acquired company’s trust fund, which was supposed to be used to maintain grave sites in numerous cemeteries.

Most of the money, about $13.7 million, was transferred to repay a $13.5 million loan that Nelms used as a down-payment to buy the business.

Prosecutors said Nelms and several others allegedly had been involved in similar cemetery trust fund schemes in Hawaii, Michigan, New Jersey, New York, Iowa and Tennessee. Only Indiana and Tennessee have filed charges, they said.

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