Rokita Pursues $27M Cemetery Fraudster
Contact: Jim Gavin
New Jersey resident Nelms Finally Trapped After Multi-state Scheme
(Indianapolis)-- Hundreds of residents across Indiana were seeking peace when they contributed to their local cemetery’s trust fund for their and their loved one's perpetual care. However, these cemeteries in six Indiana communities, along with the families of deceased Hoosiers, found their trust defrauded in a securities-related scam which could cost Hoosiers over $27 million.
Now, Indiana Secretary of State Todd Rokita’s Securities Prosecution Assistance Unit (PAU) has finished detailing Nelms’ scheme after dedicating over 1000 man-hours to the investigation. They have worked with the Marion County prosecutor’s office to file criminal charges which were filed today.
"Robert Nelms represents one of the worst elements of society; taking advantage of honest people who have chosen to invest their money for respectful purposes,” Rokita said. ”We have meticulously detailed his scheme and we are shocked at the extent that Nelms has taken to defraud honest Hoosiers. He came into our state with a purpose. Now, he’ll wish he hadn’t.”
New Jersey resident Robert Nelms is the owner and president of Memory Gardens Management Corporation (MGMC), an Indiana corporation that owns and operates cemetery property and funeral homes. In Indiana, the owner of a private cemetery is required by law to provide for the creation and establishment of an irrevocable perpetual care fund. The fund is designed for the purpose of permanently maintaining cemeteries for the benefit of the community and those who purchase lots there.
Nelms used fraudulent securities instruments similar to corporate bonds to transfer the $27 million of cash and assets of the MGMC perpetual care fund. He hid the money through a variety of complex monetary transfers and then used it to pay some of the MGMC purchase price as well as for various personal reasons, such as his large home in Greenwood.
He has been charged with a series of felonies, including fraud-related violations of Indiana's Securities law, theft and conspiracy to commit theft. Currently, Michigan is also reviewing Nelms’ scheme, but no Michigan prosecutor has filed criminal charges.
The specific MGMC properties and funeral homes Nelms raided include:
· Forest Lawn Memory Gardens, Inc. and Forest Lawn Memorial Chapel, Inc., Greenwood
· Covington Memorial Gardens, Inc. and Covington Memorial Funeral Home, Inc., Fort Wayne
· Chapel Hill Associates, Inc. and Chapel Hill Funeral Home, Inc., Osceola
· Lincoln Memory Gardens, Inc., Boone County
· Gardens of Memory, Muncie
· Gill Funeral Home, Inc., Washington
The PAU has filed charges in 26 high-profile investment fraud cases in Indiana since 2004. The unit has a 25 to 1 conviction-to-dismissal record with over 200 years of jail time sentenced to date. At a time when local government spending is being vehemently debated along with the amount of Hoosier property taxes, the PAU significantly helps local government defray the high costs of specialized financial crime investigations by committing state resources to detail the complex crime. In the Nelms case, the PAU has invested over 1000 man-hours to date and the it will continue doing so helping the prosecutor's office bring the couple, and possibly others, to trial. More importantly, the PAU uses no tax money-- it is completely funded by the fines and settlements collected from the wrongdoers.
“This case is exactly the type of situation for which Secretary Rokita created the PAU in 2004," said Chris Naylor, Indiana's Securities Commissioner. "Securities-related fraud requires advanced criminal investigations involving violations of the Securities Act and Loan Broker Act. The PAU’s focus is to assist prosecutors by working together to root out white-collar crime.”
In addition to Commissioner Naylor, Rokita thanked PAU investigators Kim Haskins and Charles Williams for unraveling Nelms’ complex scheme. If you feel you have been the victim of investment fraud of any kind, please call our office at 800-223-8791.