Green Acres loses license|Pre-need funds appear gone
Published 12:00 am Friday, February 13, 2009
Many of the 160 people who have listened through two court hearings on Green Acres Memorial Park are hoping for credit for payments made to the commercial cemetery, but it’s a wish that appears distant with each new detail.
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“They’ll have had time to find the money,” said John Bell of Vicksburg, who purchased lots at Green Acres in 1972 for himself, his wife and four daughters. “But, I imagine (Green Acres) already has that money and gone.”
Attorneys for the Secretary of State Delbert Hosemann on Thursday won an injunction from Chancellor Vicki Roach Barnes to revoke the cemetery’s license to sell such services, involving the pre-need purchase of vaults, grave markers and payments of opening and closing costs. Court documents filed in January detail a state inquiry that showed more than $373,000 missing from the trust account, into which the prepayments were to be deposited, and just $221.90 remaining as of Sept. 30, 2008.
Dave Scott of Hosemann’s office was the state’s lone witness. He testified the state has identified the Houston-based employee of Mike Graham and Associates in charge of handling the account as Janice Tubb, adding the state is also asking that she be replaced with local Green Acres official Paula Crum or someone designated by the secretary of state.
Officials of the company and its Mississippi registered agent have not appeared at any of the three court proceedings. Named on the complaint as a defendant is Stephanie Graham, a daughter of Mike Graham, who died in 2007. Scott said the state has successfully reached Graham’s widow, Linda, who has told officials she was responsible only for payroll accounts.
Court orders have been placed on business and trust accounts held by the company in Mississippi, including Vicksburg, and Florida. A BancorpSouth checking account in Mississippi set up as an operating account for the holding company’s local property was used often as a means to send its money elsewhere in the company footprint, according to Scott’s testimony.
“It’s very apparent the account was used as a clearing account,” Scott said, adding much of that fund — which stood at $5,328.82 in the state’s original complaint filed Jan. 23 — went to expenses of other company-maintained cemeteries in Alabama and South Carolina.
The balance of its perpetual care account held by Jacksonville, Fla.-based U.S. Bank, one used to hold money paid for the plots and continuing maintenance like mowing and landscaping, was down to $207,000 as of the close of business Tuesday, Scott said. It held more than $220,000 as of Sept. 30, according to the state.
Looming in the background of the case, Scott said, is the economy. In addition to the account for pre-need funds, a separate account to support continuing maintenance of the 15-acre cemetery and its 3,200 graves is invested heavily in bonds, subject to fluctuations in the national economy.
“I have never been able to ascertain whether Green Acres property funded the perpetual care fund,” Scott said. “It’s logical to conclude no money had been entrusted to perpetual care in the last several years.”
Customers who make arrangements in advance can purchase plots and receive, in essence, a real estate deed. Those remain valid. Many also pay for vaults, which are required and cost about $800 each, and pay for bronze markers and opening and closing fees, which can run their total prepayments to several thousand dollars. It’s that money, required by state law to be accounted for, that is missing, Hosemann’s investigation determined.
Scott also testified the company’s Houston offices have been dissolved much like the cemetery’s trailer office on U.S. 80, with those records believed to be held in a storage facility. Personnel in Houston could withdraw whatever money remains, making it tougher to locate and restore missing funds, Scott told the state’s lead attorney, Martin Pizzetta III.
Further hearing dates will follow as events dictate. In a closing statement, Pizzetta told Judge Barnes there would be an “extensive discovery to try to find where the money went.”
Hosemann issued a statement late Thursday terming the case a “sordid mess.”
“The Judge’s order will ensure no more funds are lost in this case,” Hosemann said.
Revocation of the cemetery’s license stems from a cease-and-desist order issued by the Secretary of State’s Office in November 2006 due to the firm’s failure to file an annual report to the state reflecting its finances for 2005. The maximum fine of $5,000 was issued for that violation, Scott said. It had filed such information “very late” for its 2004 finances, Scott said, and had incurred a $1,000 fine for that offense. Also, Green Acres had not filed a perpetual care statement with the chancery clerk’s office since 2003, Scott said.
Scott outlined basic information from a contract sold by the company on July 25, 2008, as evidence for the record that the company kept selling pre-need services beyond the state’s order to stop. While the contract’s parties were not specified in open court, its terms were used as those typical of a pre-need contract. Scott said the buyer placed a $1,500 down payment, with 48 payments of $112.14 to follow.
Seven additional funeral industry firms in Mississippi were targeted for action by Hosemann’s office. Corporate reporting violations alleged at Green Acres were the most serious in terms of the total of missing money.
The cemetery was established in 1955 and operated by Joe Varner for 30 years until his death in 1989. After a succession of operators, it was purchased by Graham in 2001. A number of liens and personal lawsuits had been filed against the company in the years leading up to the current probe, according to Warren County Chancery Court records.
At least three burials have taken place at Green Acres since Jan. 22. Two employees are reportedly still being paid.
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Contact Danny Barrett Jr. at dbarrett@vicksburgpost.com.