Insurance company accuses funeral home of filing false claims

By Chris Dickerson | Aug 31, 2015

HUNTINGTON – A Putnam County funeral home operator allegedly filed almost $1 million in false insurance claims by claiming more than 100 people were dead, according to a federal lawsuit.

Homesteaders Life Company, which is based in Iowa, filed its complaint Aug. 19 in U.S. District Court against Gatens-Harding Funeral Home Inc. as well as owners Chad R. Harding and Billie J. Harding. Homesteaders claims the funeral home falsely reported the deaths of 111 people who had signed up for pre-need funeral services and collected more than $900,000 from the insurance company.

Homesteaders sales life insurance and annuity products, including life insurance policies to consumers entering into pre-need funeral contracts. In 2005, the companies entered into an agreement for the sale of pre-need contracts. For each enrollment, Chad Harding would be paid a commission, the complaint states. A similar agreement was signed again in 2007 with Chad Harding. Another similar agreement was signed in 2010 and again in 2012 for Chad Harding and additional employees of Gatens-Harding Funeral Home.

Homesteaders paid commissions totaling $136,719.73 to Chad Harding and other funeral home employees for enrollments, according to the complaint. The funeral home also received an additional $14,667.23 override and bonus. Chad Harding received an additional $7,242.62.

Homesteaders would release funds upon the death of a consumer who had signed up for a pre-need funeral contract. Beginning around September 2012, Chad Harding allegedly started filing false death claims with Homesteaders.

He “engaged in a continuous pattern and practice of submitting materially false death claims to HLC, by telephone, and filling out and signing materially false bank drafts, wherein he fraudulently misrepresented that the … consumers had died … and that the contracted-for funeral services had been provided, when, in fact, said consumers were no deceased and said funeral services had not been provided,” according to the complaint.

“Chad R. Henning, on behalf of Gatens-Harding Funeral Home, signed his name … and falsely certified thereon the date of death of the consumer and that funeral services and goods had been provided.”

To these consumers who still are alive, Homesteaders says it has reinstituted the life insurance policies. Of the 111 people the funeral home claimed to be dead, 14 people did pass away after the funeral home claimed they had passed.

Homesteaders accuses the defendants of fraud, violation of RICO laws for racketeering, conversion, breach of contract and unjust enrichment. It seeks compensatory damages, actual damages, special damages, punitive damages, attorney fees, court costs, pre-judgment interest and other relief. The insurance company is being represented by Alex Macia and Keith D. Fisher from Spilman Thomas & Battle PLLC in Charleston.

The funeral home posted a message about the lawsuit on its Facebook page.

"We want to say thank you to all the people that have called, emailed and text to say I love you and we support you,” it says. “There are always two sides to every story. We are not perfect and yes we make mistakes. Our attorney is working to get his resolved as soon as possible and if we owe anything it will be paid completely. We appreciate your continued prayers."

U.S. District Court Southern District of West Virginia case number: 3:15-cv-12544

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