One of the owners of a Poca-based funeral home, accused in a lawsuit of cashing in on pre-need funeral contracts for people who weren't actually dead, is the target of a potential criminal investigation, his lawyer disclosed in court documents.
Chad Harding "is the target of a potential and ancillary criminal investigation," wrote his lawyer, Jeff Woods.
Chad and Billie Harding, the owners of Gatens-Harding Funeral Home, cashed in on $1 million in pre-need funeral contracts during an eight-year period for 111 people who weren't actually dead, according to a lawsuit filed last year by Homesteaders Life Insurance Co.
U.S. District Chief Judge Robert Chambers in May granted the company default judgment against the Hardings. The company has asked the judge to award it about $3 million.
The potential criminal investigation, plus other lawsuits and litigation the Hardings are a part of, made participating in the case filed by Homesteaders "extremely and unduly costly and prejudicial," among other things, Woods wrote in a July filing asking the judge to reconsider his decision to have the Hardings pay for the expenses of the insurance company. "Also, there have been discussions regarding the initiation of proceedings to suspend or revoke [Chad Harding's] license as a mortician."
Putnam County Prosecuting Attorney Mark Sorsaia said Friday that he would "not contradict" Woods' statement that Chad Harding is the target of a potential criminal investigation.
"It would either be me or the U.S. Attorney's Office" conducting an investigation, he said.
A spokesman for U.S. Attorney Carol Casto's office on Friday said only that he "could neither confirm nor deny the existence of an investigation."
West Virginia Attorney General Patrick Morrisey's office is also suing Gatens-Harding. That lawsuit, filed in Kanawha County Circuit Court, alleges the funeral home violated the state's Consumer Credit and Protection Act as well as the state Funeral Contracts Act.
Last November, state lawmakers were given an audit, which showed that in fiscal year 2014, Tri-State Mortuary, which is owned by Chad Harding, provided 94 percent of all transportation services for bodies in need of an autopsy by the state Medical Examiner's office.
"[Office of the Chief Medical Examiner] appears to have given preferential treatment to Tri-State Mortuary Services by assigning the majority of all incoming body transports to Tri-State," the audit said.
Meanwhile, people who loaned Harding money to buy the funeral home are trying to remove him and take over the business. Mack Johnson and Leonard Johnson Funeral Homes also filed a lawsuit against the Hardings, who, in turn, sued them back claiming they are intentionally damaging their business relationship. Those cases are pending in Putnam Circuit Court.
"Given the Defendants' limited financial assets, his business liabilities, and the aforementioned multiple actions, they were required to prioritize the manner in which they would apply their limited and meager legal budget," Woods wrote last month. He added that the Hardings intended to reach a settlement agreement with the Homesteaders Life Insurance Company.
In his order granting the insurance company default judgment, Chambers wrote that the Hardings refused to comply with court orders and repeatedly missed deadlines. Woods filed a response to the lawsuit last year in which he denied the allegations made against his clients. He never filed anything else in the case, until after Chambers entered the order in May granting the insurance company's motion for default judgment. The judge cited a "complete lack of interest in defending this suit" as a reason for ruling against the Hardings.
Chambers had already in January granted a pre-judgment motion in favor of the insurance company and put an attachment on Harding's assets, which would allow the insurance company to sell them if the company wins its lawsuit.
In an extraordinary move in March, Chambers ruled that the people Harding had cashed death benefits for, during an eight-year period, were not, in fact dead. That ruling was made by default, after Woods failed to meet deadlines in the case.
Beginning in September 2012 - and up until as recently as March of 2015 - Gatens-Harding submitted claims to Homesteaders Life, saying that a member with a pre-need insurance plan had died and the funeral home had rendered services.
Prearranged plans are generally viewed by consumers as beneficial because they free families from financial and other burdens that arise upon the passing of a loved one.
For a funeral home to receive payment, it is required to submit a death claim to the insurance company for the amount of death benefits available on a consumer's policy.
Once a claim is submitted, the funeral home certifies the date of death and that the funeral services have been provided. Once the insurance company receives the funeral home's certification, it can release the fund.
Reach Kate White at
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