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
