Michigan AG investigation reveals up to $70 million embezzlement in Cemetery Trust Fund Case… Brings 39 charges against former owner Clayton Smart

LANSING, Mich., April 26 /PRNewswire-USNewswire/ -- Attorney General Mike Cox today announced that Clayton Ray Smart of Okmulgee, Oklahoma, has been charged with 39 felony counts in connection with the alleged embezzlement of up to $70 million in cemetery trust funds affecting 28 cemeteries in Metro Detroit and throughout Michigan including racketeering, failure to trust cemetery proceeds, and embezzlement.

"The defendant's actions are appalling -- embezzling trust funds that were set aside to care for cemeteries and burials," said Cox. "The citizens of Michigan and, most importantly, the families with loved ones in these cemeteries should rest assured that this conduct will be prosecuted to the fullest extent of the law."

Charges filed against Smart, 67, include 1 count of Racketeering, a 20-year felony; 10 counts of Embezzlement, each a 10-year felony; and 28 counts of Failure to Trust

Ceetery Proceeds, each a 5-year felony, for allegedly embezzling as much as $70 million in cemetery trust monies to fund the purchase of 28 Michigan cemeteries and other improper purposes.

These 39 counts account for $38 million of the $70 million that should be placed in cemetery trust funds. The remaining $32 million remains under investigation.

There are only 152 cemeteries in Michigan required to place funds into a trust under the law. Therefore, the 28 cemeteries that were owned by Clayton Smart account for more than 18%, or roughly 1 in 5, of all regulated cemeteries in Michigan.

In addition, according to the most recent figures (from 2005), all non-Smart cemeteries in Michigan that were required to place monies into a trust had trusted $150,560,209.50. In 2005, it is estimated that Smart should have had $70,000,000 in trust for these 28 cemeteries. Therefore, as much as 31% of all trust dollars in regulated Michigan cemeteries are involved in this case.

 "My goals are clear: protect the public interest, secure the operation of these cemeteries, and criminally charge those who are responsible for embezzling this money," added Cox. "My office and the Department of Labor and Economic Growth have committed resources to this case, and we will pursue all avenues of recovery and seek the appropriate punishment of those who are culpable."

 Today's criminal charges are the latest in a series of steps taken by the Attorney General in his investigation into Clayton Smart and the cemetery trust funds:

    -- In December 2006, Attorney General Cox, in partnership with the

       Department of Labor and Economic Growth, sought and obtained the court        appointment of a conservator to take over control of the cemeteries and protect their continued operations.

    -- In January 2007, Cox obtained a court order freezing $22 million in a bank account belonging to Craig Bush that is alleged to consist of trust monies Smart paid to Bush. Litigation to transfer this money back to the cemetery trust accounts is continuing.

 Clayton Smart acquired ownership of 28 Michigan cemeteries in August 2004 from Craig Bush of Bloomfield Hills, Michigan. Under Michigan law, all cemeteries of 10 acres or more are required to maintain trust accounts to ensure the future operation of the cemeteries. At the time Smart acquired these cemeteries, approximately $61 million was held in trust. Since then, an estimated $9 million should have been placed in trust, for a total of

$70 million.

The investigation revealed that, after owning the cemeteries for several weeks, Smart, or others acting on his behalf, diverted these funds for improper purposes. It is specifically alleged that Smart wired at least $21 million in trust money to Bush after the transfer of ownership.

The 39 charges have been filed in the 36th District Court in Detroit.  f convicted as charged, Smart could face up to 20 years in prison.

Smart is also the owner of cemeteries and funeral homes in Tennessee, Arkansas, and Oklahoma. State officials in at least Tennessee and Oklahoma are examining Smart's business dealings in their state as well. A criminal charge is merely an accusation, and the defendant is presumed innocent until and unless proven guilty.

 

                              List of Cemeteries

 

    1   Acacia Park Cemetery            31300 Southfield Rd   Beverly Hills

    2   Cadillac Memorial Gardens East  38425 Garfield Rd     Mt Clemens

    3   Oakview Cemetery                1032 N. Main St.      Royal Oak

    4   Roseland Park Cemetery          29001 N. Woodward     Berkleyp; Berkley

    5   Washtenong Memorial Pk          3771 Whitmore Lake    Ann Arbor

    6   Mount Hope Memorial Gardens     17840 Middlebelt Rd   Livonia

    7   United Memorial Gardens         4800 Curtis Rd        Plymouth; Plymouth; Plymouth

    8   Cadillac Memorial Gardens West  34424 Ford Rd         Westland

    9   Woodlawn Cemetery               19975 Woodward Ave    Detroit

    10  Woodmere Cemetery               9400 W. Fort St       Detroit

    11  Grandlawn Cemetery              23501 Grand River     Detroit

    12  Forest Lawn Memorial Park       11851 VanDyke         Detroit

    13  Oakland Hills Memorial Gardens  43300 W. 12 Mile Rd   Novi

    14  Eastlawn Memorial Gardens       7475 E. Holland       Saginaw

    15  Oakwood Mausoleum               5950 Gratiot Ave      Saginawp; Saginaw

    16  Midland Memorial Gardens        565 N Meridian Rd     Midlandp; Midland

    17  Elm Lawn Cemetery               300 Ridge Rd          Bay City

    18  Roselawn Memorial Gardens       950 N. Center Rd      Saginaw

    19  Forest Lawn Memorial Gardens    5301 N. Michigan      Dimondale Dimondale Dimondale

    20  Hillcrest Memorial Park, Inc    1425 Elm Rd           Jackson

    21  Albion Memorial Gardens, Inc.   26905 B Drive South   Albion

    22  Kent Memorial Gardens           7101 Clyde Pk Ave SW  Byron Center

    23  Floral View Memorial Gardens    0-5371 Eight Ave SW   GrandvilleGrandville

    24  Restlawn Memorial Gardens       994 Pawpaw Dr         Holland

    25  Graceland Memorial Park         4341 Cascade Rd       Grand Rapids

    26  Oaklawn Chapel Gardens          15264 South M-129     Sault Ste. Marie

    27  Northland Chapel Gardens        239 Midway Dr         Negaunee; Negaunee

    28  Garden of Rest                  6556 Hwy US 2 & 41    Wells