Former owner of cemetery enters plea

Hundreds defrauded in scheme

Friday, June 20, 2008

The plea was submitted as an Alford plea, admitting no guilt but agreeing the state could prove the charges against Deffenbaugh if the case went to trial.

The theft plea encompasses all 551 victims, and part of the plea agreement is for Deffenbaugh to sign over his $6,000 a month payments from the sale of the cemetery directly to a trust fund to compensate the victims, said Kathryn Marsh, assistant state’s attorney. All the contracts will be met and money sent to the trust fund will be given for memorials due, she said.

Deffenbaugh was supposed to place money given by people for services and merchandise in a trust fund. However, no money was placed in a trust fund in 2004 and 2005, Marsh said. Deffenbaugh broke state laws when not placing the money in a trust fund, and he also sent memos to trust accounts asking for the release of funds to the business’s general funds claiming the people had died when they had not, Marsh said. In about 23 cases, the funds were released when Deffenbaugh lied about the deaths.

The cemetery also defrauded customers when they paid for lined waterproof vaults, and state evidence claimed that the vaults were not lined. Instead they were painted black to look like they were lined. The price difference is $200, Marsh said, and two employees signed statements saying they were told to paint the inside of the vaults.

Deffenbaugh’s attorney, Robert Harvey of Prince Frederick, asked the courts for a change of venue in February saying the victims in the case, ‘‘comprise a virtual ‘‘who’s who’ of Calvert County.” Harvey’s motion told the court that Deffenbaugh’s case would be prejudiced because the hundreds of individuals listed in court documents were all residents of Calvert County, but the court denied the motion.

Deffenbaugh sold Southern Memorial Gardens to Danny Martin in March 2006, and Martin said he saw discrepancies the first couple of weeks owning the business.

‘‘We ... opened an internal investigation,” Martin said.

In his second month of owning the business, Martin said he filed an injunction with Calvert County Courts and it was granted. Martin began paying the courts his $6,000-a-month payments instead of paying Deffenbaugh a second mortgage as agreed in the sale. The court system amassed $152,000 since the injunction, he said.

‘‘Now that we’re going to get the money, we can start making people whole,” Martin said. Everyone is going to get exactly what they paid for, he said.

Maryland State Police Detective Gary Mounts initiated the investigation in 2006 and numerous victims started coming forward when they went to the cemetery and learned that merchandise ordered was not in place, Marsh said. During the investigation it was learned that orders were placed to Matthew’s International for stones and bronze, but the money was never sent, she said.

The state’s Office of Cemetery Oversight has been auditing the contracts from Southern Memorial Gardens, and overseeing the contracts on all the memorials in question, Marsh said. The office had 26 contract complaints from Southern Memorial Gardens, said the office’s investigator, Patricia Fagan Tress.

The office to oversee cemetery contracts came into being after a law in 1997 passed to regulate cemetery practices. Carolyn Jacobi lobbied the state for more than a year for a law regulating the death care industry through Eternal Justice Inc., an organization she founded.

‘‘We were the catalyst of the bill,” she said.

Jacobi said she received many calls from people who learned that memorials they paid for were not put in place, and she was glad to hear that things are being rectified.

‘‘It’s unfolding daily, we’re finding new things daily,” Martin said. Martin filed a civil suit prior to the criminal suit, not only because of the lack of trust funds, but because Deffenbaugh misrepresented the number of lots in the cemetery, Martin said. It was learned after the sale that 1,200 lots were not available and that equates to $4 million, he said.

‘‘We’re not sure what we are doing about the civil case yet.” Martin said he has also agreed to set aside $100,000 of his own money for the people who don’t yet know their contracts were not fulfilled by Deffenbaugh.

Stacey Campbell, who was treasurer of the cemetery for a year under her father, Deffenbaugh, was also indicted, and the court accepted her Alford plea to conspiracy to run a theft scheme. Campbell, who came back to the family business to help her father, provided information during the investigation, Marsh said. She was only with the business for a year, and, due to cooperation, the courts will not seek a jail sentence for her, Marsh said.

Deffenbaugh’s plea carries a maximum sentence of 15 years and a $25,000 fine, but during the plea agreement with a visiting judge the court said that if there is no criminal history on record the guideline for sentencing would be probation to six months in jail, Marsh said. All the money must be paid back prior to sentencing, she said. The state will ask for five years of incarceration at his sentencing on Sept. 18, she said.

Jennifer Bowen of Owings was a customer of Deffenbaugh’s and said she was told to put her money aside and not give any more to the cemetery during the investigation.

‘‘I can’t believe that someone would do such an underhanded thing,” she said.

Bowen said she used to be a neighbor to the Martins and she feels good about the Martins purchasing the cemetery.

William and Grace Jarboe, who were among the hundreds of victims, know Martin personally since his father Billy Martin was the best man in their wedding 46 years ago.

‘‘The Martins are good people and have the best interest of the people, they will take care of them,” Grace Jarboe said.

‘‘I have such a faith in them, that it will all work out,” she said.

The Jarboes also have family connections with Deffenbaugh, and she said that they suspected something was going on with Deffenbaugh prior to the investigation, but they had no idea of the scale of the deception.

The Office of Cemetery Oversight is no longer investigating Deffenbaugh because of his Alford plea, Tress said. Southern Memorial Gardens, along with all licensed cemeteries throughout the state, must submit Pre-NeedÊTrust Fund Reports and Perpetual Care Trust Fund Reports annually to the office, she said. Additionally, financial disclosure statements must beÊfiled with the office bi-annually along with re-licensing applications, she added.