Death Care Law Blog : Kansas Death Care and Preneed Lawyer & Attorney : Stalter Legal Services Law Firm : Funeral Law, Elder Law : Kansas City

In the end, Clayton will likely spend many of his final days in a federal penitentiary. The Memphis Commercial Appeal outlines the plea bargain to be entered by Clayton Smart to conclude criminal investigations in Tennessee, Oklahoma and Michigan.

Comments made to the Commercial Appeal story express outrage with the prosecutors and the plea bargain. Consumers will not be made whole, nor will Mr. Smart be summarily executed.

The costs of the Smart investigation and prosecution have to be staggering. The transactions span three states, multiple state regulatory jurisdictions and various local and Federal prosecutors. With the prospect of securing testimony against all of those who abetted Mr. Smart, prosecutors have moved to bring the matters to faster conclusion.

It is unlikely that three different courts will agree that Mr. Smart’s 4 years at 201 Poplar has paid his debt to society. His cooperation will count for something, but the harm to consumers can’t be ignored.  

With budgets in decline, regulatory agencies and prosecutors need to find the means to work together when the facts indicate fraud or theft have occurred.  The preneed regulator will be the first to suspect something is wrong, but in the end, may lack the resources to press for prosecution.   Prosecutors may lack the facts and knowledge of the preneed law to determine whether a crime has been committed.  Better coordination between regulators and local prosecutors is needed.
 

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Forest Hills’ preneed consumers were hoping for news of retribution, but Clayton Smart’s anticipated plea bargain was put on hold. If news reports are accurate, authorities from Tennessee (and perhaps Michigan and Indiana) have their sites on the individual(s) who facilitated the transactions that eventually left preneed trusts and permanent maintenance trusts depleted.

For the past few years, Mr. Smart has sat in jail while authorities built their cases. Until recently, Mr. Smart had not even employed an attorney. In what may be tipping his hand, Smart’s attorney now suggests his client has paid a steep price through incarceration. If Forest Hills consumers had their way, Mr. Smart would be condemned to a much warmer, and eternal, confinement.

It is most likely that Mr. Smart has been making his deal through testimony given, and to be given, with respect to his transactions in Michigan and Tennessee. Mr. Smart’s Michigan caper has been detailed by the Detroit Business Journal in an article titled The Grave Robbers. CNNMoney has also chronicled the story.

By these accounts, Mr. Smart had no prior experience in either the funeral business or the cemetery business. Yet, with the help of ‘sophisticated financial advisors’, a self-promoting speculator exploited the laws meant to protect the consumers of both industries.

The Tennessee authorities cannot possibly make the Forest Hill consumers whole. When Smart took control of the Forest Hill preneed trust funds, its insurance investments were surrendered at substantial losses. Smart’s advisors wanted to put the money to better use. Consequently, the authorities need to make an example of Mr. Smart, and his friends. 

Those victimized by NPS (and the IFDA?) are hoping for some of the same justice. However, the issue of justice in Missouri is complicated by rumors of complicity between the preneed company and some of its industry members.
 

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Even when the need for reform is apparent to all, the legislative process can take years. With the Michigan Senate having approved a House substitute, that state’s cemeteries are a step closer to reform that could have avoided Clayton Smart’s pillaging of $70 million dollars of endowed care funds.

The Michigan Legislature’s website provides the history of SB 0674, from its introduction in August 2007, to the Senate’s December 19th vote to adopt the House substitute. Including the Attorney General’s investigation, the Michigan reform process has taken over two years. As with all reform efforts, some were not happy with the delays encountered in the Legislature’s efforts. Getting it right is not as easy as it would seem.

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