By ANNIE GOELLER, Daily Journal of Johnson County staff writer
Investigators continue to delve into the financial records of a cemetery owner in a case that prosecutors said stretches across multiple states and could involve as much as $200 million in misspent and missing cemetery funds.
Robert Nelms, 39, and Debora Johnson, 48, appeared for an initial court hearing Friday on multiple criminal charges.
The two face a maximum of 10 years in prison for the charges, including fraudulent or deceitful acts, loans from a perpetual care fund, five counts of theft, and two counts of violation of cemetery perpetual care fund.
And now, prosecutors said money could be missing from funds set aside from pre-paid burial services.
In the hearing, Marion Criminal Court 2 Judge Robert Altice entered preliminary not guilty pleas for Nelms and Johnson.
Attorneys for Nelms and Johnson asked a judge to reduce their bail, which had been set at $500,000 each.
Altice agreed and reduced Johnson's bond to $200,000 and allowed Nelms to get a bail bond for half of his bond or $250,000.
To be released, Nelms would have to pay a total of $50,000, half to the court and half to a bondsman. Johnson, who asked the court to drop her hyphenated name because she learned her marriage to Nelms was not legal, would be required to pay $20,000, said Matthew Symons, spokesman for the Marion County prosecutor's office.
Both were being held in the Marion County jail Friday afternoon.
The case remains under investigation and other people who have not been charged are a part of the investigation, said David Wyser, Marion County prosecutor's chief trial deputy.
In total, investigators believe as much as $200 million may have been misspent, including $80 million in Tennessee, $40 million in Michigan, $40 million in Indiana and additional money in New Jersey, Wyser said.
Nelms bought 14 funeral homes and cemeteries, including Forest Lawn Memory Gardens and Funeral Home on State Road 135 and others in Indiana, Ohio and Michigan, from the Meyer family in 2004 and had owned a funeral home in New Jersey.
Spokesmen for the attorney general offices in Tennessee and New Jersey would not confirm if Nelms was under investigation.
Another issue investigators are looking into is money that may be missing from funds set aside from pre-paid burial services, Wyser said.
Officials believe Nelms either did not set aside money from pre-paid services or took money that was set aside, said Staci Schneider, spokeswoman for the Indiana attorney general.
State law requires cemeteries to set aside money when people pre-pay for future burial needs and for care and maintenance of the cemeteries.
The charges both face are because of $22 million prosecutors said that was spent out of the perpetual care trust fund, but that is only the start as the investigation continues, Symons said.
The pre-paid money that investigators believe to be missing should have gone into an escrow account for opening and closing graves, Schneider said.
She did not know how much money officials believe to be missing or if there is any money in the escrow account.
Nelms, who was wearing an orange jail uniform and black dress shoes and socks, is not a flight risk, his attorneys said.
Nelms has cooperated with authorities since the investigation began in March 2007. His passport is lost, he lives in the Indianapolis area and has a number of civil court cases he is involved in, said Jim Voyles, Nelms' attorney.
The prosecutor said that Nelms had been taking flying lessons and that he had the funds to leave and the connections to other parts of the country, Wyser said.
Altice said the court had never seen a bond amount that high, especially in a financial case.
In Johnson's case, her attorneys also argued that she was not a flight risk and that her bond should be reduced.
Altice agreed again, saying it didn't appear Johnson was as intimately involved in the scheme as Nelms.
Johnson, wearing a black coat and grey pants, cried as she was led into the court room and sometimes stared at the table in front of her during the hearing.
Her attorney told the judge Johnson had no control over what Nelms did and had cooperated with investigators. A portion of the case they have made is in result of information Johnson gave, said Robert Schembs, Johnson's attorney.
Johnson does not have a passport, turned herself into the jail and is not a danger to the community, Schembs said.
Wyser interviewed an investigator who said that Johnson did not have an Indiana driver's license and had not filed income taxes in the state. And Wyser pointed out that two children live in other states and she was separated from Nelms, who she had learned she was not legally married to.
Altice asked the investigator if Johnson was a flight risk, and he responded no.
Both have another hearing in court Feb. 13.