Attorney general opposes Hannas' bankruptcy
Tim Turner ~ News-Democrat & Leader (Russellville, Logan County, KY) ~ 10/28/2005
In addition to criminal proceedings now underway against former funeral home director Tim Hanna of Russellville, Kentucky Attorney General Greg Stumbo is also opposing bankruptcy being granted to Hanna and his wife Cindy.
The charges and complaints result from allegations that Tim Hanna accepted preneed funeral arrangement funds from a number of people who now are being told their investment is missing.
The attorney general's office already has 29 complaints filed from affected individuals. In a legal brief, Stumbo estimates the number to be double that (58) with approximately $320,000 involved.
We are investigating Memorial Funeral Home, and its owners/officers Tim and Cindy Hanna, under the civil provisions of the consumer protection statutes, regarding apparent violations of the preneed burial contract trust fund statutes (KRS 367.934-.940)," says Stumbo spokesperson Vicki Glass.
We are cooperating with the Kentucky State Police and Logan Commonwealth Attorney Charles Orange, as they investigate possible criminal violations. At our request, they have also been giving consumer complaint forms to consumers that contact them about this."
The investigation began on Sept. 23 after the attorney general received information indicating that $10,000 paid by a consumer in April 2002 to Memorial Funeral Home (MFH) for a pre-arranged funeral trust contract purchased had not been put into the trust fund as required by the statute.
Stumbo's office began its investigation by sending subpoenas and civil investigative demands to MFH on Sept. 28.
We also sent a subpoena to Funeral Funding Trust of Kentucky that day, and it has cooperated with our investigation and has provided records," Glass says. On Oct. 5, we petitioned the Logan Circuit Court to impound MFH's business records, and the Court granted our request.
So far, we have received 29 consumer complaints. Our investigation is ongoing."
Memorial Funeral Home has been closed for several weeks.
According to the complaint filed through the attorney general's Consumer Protection Division, Tim and Cindy Hanna filed a joint voluntary petition under Chapter 7 on July 1, 2005.
The complaint also says that Memorial Funeral Home was administratively dissolved by the Kentucky Secretary of State two years ago next week, on Nov. 1, 2003, for failure to file its annual report. The last annual report for Memorial was filed March 7, 2002.
On Tuesday of this week, Oct. 25, the attorney general's office filed a Complaint in Tim and Cindy Hanna's personal bankruptcy action in bankruptcy court, Western District of Kentucky, Bowling Green Division, objecting to their discharge from any liability they may personally have in relation to the preneed burial contract payments that were not properly placed or maintained in the required trust account, and interest and earnings thereon, which are trust funds by operation of KRS 367.934.
In a brief opposing granting the bankruptcy, the attorney general's office says: The Division's investigation is onoging, but information received by the Division indicates that the Defendants, or either of them (Tim and Cindy Hanna), violated the trust provisions of KRS 367.932 to 367.974 regarding the preneed burial contracts of approximately 58 consumers, involving over $320,000 in aggregate, over a period of time through Aug. 19, 2005 as follows:
a. Failure to place preneed burial contracts in a trust account.
b. Withdrawal of preneed contract payments that were placed into a trust account, based on the submission of false, misleading, deceptive, forged or fraudulent documents indicating that the consumer had died.
c. Filing false, misleading, deceptive or fraudulent reports with the Attorney General that did not list all preneed burial contracts sold or the full amount of payments thereon.
d. Providing false, misleading, deceptive, forged or fraudulent documents and information to consumers regarding the status of or amounts in their preneed burial contract trust accounts."
The amounts could change as more people file complaints, Stumbo's office says.
To file a formal complaint with the attorney general, people who think they have become a victim should obtain forms from Orange's office on West Fourth Street in Russellville, fill them out and submit them to Stumbo's office.
In the compliant, Stumbo accuses the Hannas of fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny..."
The Defendants' debts in relation to the actions referenced herinabove are non-dischargeable pursuant Sections 532(a)(4) and 523 (c)," the complaint contends.
Assistant Attorney General Kevin Winstead signed the legal document.
The N-D&L has not been informed of any criminal charges having been brought against Cindy Hanna. Tim Hanna was charged and arrested before being released on bond.
Allegations made in a legal action constitute only one side of a case and may be proved or disproved in a court of law.
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