Investigators: Smart bought funeral homes with trust funds

Clayton Smart (file photo)
Clayton Smart (file photo)

MEMPHIS, Tenn. (AP) - Investigators say a businessman charged with stealing millions of dollars from a Memphis funeral home's trust funds bought the business using money from its own accounts.

Max Shelton, the current administrator of the Forest Hill funeral homes, said co-owner Clayton Smart moved money around in order to purchase the funeral homes.

Smart is charged with helping to steal up to $20 million from burial policy trust funds.

He faces similar charges in Michigan where authorities say some $70 million is missing from 28 cemetery trust funds.

Hearings on the Forest Hill investigation were held yesterday in criminal and civil courts in Memphis where Smart is jailed awaiting trial.

State investigators are trying to restore the value of the contracts after the company defaulted on more than 13,000 last year.

An investigator with the state's Attorney General's office said Smart and associates bought Forest Hill with a $4.1 million loan and then repaid it with money from the company's trust funds.

After the sale, authorities contend millions of dollars were transferred from the accounts to shell companies controlled by Smart of Oklahoma.

(Copyright 2007 by The Associated Press.  All Rights Reserved.)