By JOSEPH S. PETE, Daily Journal of Johnson County staff writer
A judge ordered a freeze of all the finances related to a cemetery and funeral home on State Road 135 in Center Grove on Thursday after the owner was arrested on criminal charges.
That freeze includes all the funds under the control of Robert Nelms, owner of Memory Gardens Management Corp., including those related to Forest Lawn Memory Gardens and Funeral Home.
In Johnson Superior Court 2 on Thursday afternoon, Judge Kim Van Valer ordered an immediate freeze of trust funds under Nelms' control. The judge also has been asked to name someone to oversee the cemetery and funeral home and its funds.
The state attorney general's office requested the emergency freeze of eight accounts and trust funds linked to Nelms after he was arrested Thursday on multiple charges including theft and fraud.
His wife, Debora Johnson-Nelms, also was charged with theft and fraud.
The state also has asked the court to appoint someone to manage the cemeteries and funeral homes owned by Nelms. That company or person, called a receiver, would identify and recover misappropriated trust funds.
State officials believe Nelms and Johnson-Nelms misspent trust fund money, including using the money for personal expenses, such as closing costs for their Center Grove area home. Money in cemetery trust funds is required to be used to maintain cemetery properties.
At one point, the funds contained $28 million, the attorney general's office said.
How much was left in the accounts wasn't known, deputy attorney general Bob Wente said.
Money has been transferred to funds in other states, and possibly other countries, Wente said. With access to the trust funds, Nelms would be a flight risk if released on bond, Wente said.
After an emergency hearing, Nelms' assets were frozen.
He was not given notice of the hearing so that he wouldn't have the chance to access any of the money before the judge's order, Wente said.
Nelms had tried to transfer money since Michigan officials announced he was under investigation in late December, Wente said. Officials there accused him of misappropriating more than $4 million.
"He will try to do anything he can do to get his hands on the trust funds and some of the accounts," Wente said.
A bank with an account under Nelms' control was recently given an order to transfer $1.6 million. The bank refused, knowing about his legal troubles, Wente said.
Most of the banks have been awaiting a court order to freeze the trust funds, he said.
Nelms has made at least six transfers from shell companies set up as fronts to transfer money, Wente said.
If left in control of the assets, he might continue to transfer funds to other accounts, Wente said.
"It takes a score card to keep track of it, but that's part of the scheme," he said. "The money keeps bouncing from one account to the other."
The attorney general's office requested that Nelms' assets be turned over to a receiver to identify and recover misappropriated trust funds.
No receiver was appointed Thursday.
An attorney for the Meyer family, which sold the funeral home to Nelms in 2004, requested that a hearing be scheduled in the next 10 days to appoint a receiver.
The family had filed a civil lawsuit against Nelms earlier this month, accusing Nelms of misspending trust fund money and asking the court to appoint someone to manage the cemeteries and funeral homes he purchased.