The closing of the second-oldest funeral home in Pikeville comes with allegations that the owner ... Funeral home bankrupt, und

Richard D. Justice, the owner of the Justice Funeral Home on South Mayo Trail, denies allegations about missing burial expense trust funds and insurance money. He claims that former employees embezzled money from the business.

Ronda Slone, the communications director for the Kentucky Office of Insurance, an agency that works with the Attorney General's office during investigations, said a complaint was filed against Justice and the funeral home. The complaint is being investigated as a criminal matter, but Slone couldn't provide additional information because the case is still pending.

Vicki Glass, a spokesperson for the Attorney General's office, did confirm another pending civil investigation of Justice and the business through the office's consumer protection branch, but she also could not discuss it.

Justice's father, Perry A. Justice, opened the funeral home several decades ago. After he died, Justice and his brother, Gary Justice, took over the business. When problems arose between the siblings, Gary Justice purchased the J.W. Call Funeral Home in Pikeville.

A note on the Justice Funeral Home door on Nov. 16 said the business was closed because of sickness in the family. Justice said Thursday that he suffered a stress-related stroke and heart attack this year. Although the doors were locked that day, the note said the funeral home would reopen Nov. 13, three days earlier. The last funeral was held there in October, and now, while the state investigation is pending, another owner is moving in.

Doshie Bartley, 71, of Powell's Creek, said she wrote a $16,403 check and gave it to Justice in August 2004, thinking she was doing a positive thing for her and her husband, William Ray Bartley, but when it was time to withdrawal the money, she said nothing was there.

Justice Funeral Home handled the burial arrangements last year for Bartley's husband of 50 years, but she said the financial agreement she had with the funeral home “worried me to death." Bartley wanted to transfer the remaining funds in her burial insurance contract to another funeral home in Pikeville. The director there, she said, informed her that no money was available when he went to pick up the contract.

“We worked ourselves to death," Bartley said. “I thought I was doing a good thing paying the funeral bill, but I just got us into trouble."

Bartley, who is caring for her adopted 13-year-old great grandson, said she has spoken to investigators about it. To date, she has not been reimbursed by the funeral home.

“Richard put him away and he put him away real good," Bartley said, “and I hate so bad that he had to do that. My money wasn't the only one. He spent other people's money."

“The monies are there," he said. “I've worked with the Attorney General. Some of the monies weren't where they were supposed to be."

Justice said he negotiated a settlement with the Attorney General. “All the allegations have been addressed," he said. “I haven't signed the documents."

Justice said the funeral home utilized two types of pre-paid burial expense services, an insurance policy that covers the client if funeral expenses increase before the funds are used and trust funds set up with interest-bearing accounts at local banks. Trust funds, he said, aren't guaranteed and don't compensate clients when funeral expenses increase over time.

Justice attributed alleged discrepicies in burial expense funding to former employees, whom he said embezzled money and forged documents while they worked at the funeral home. He said he expects to see indictments against those individuals, but his claims could not be verified yesterday.

The Kentucky Board of Embalmers & Funeral Directors reported that the funeral home closed because a licensed embalmer left, and Justice, the licensed funeral director, did not have the qualifications to fill the role.

Justice, a director of Pike County Bowl, Inc. who pulled out of the sheriff's race this year, filed for Chapter 7 bankruptcy in February, but the case is not finalized. U.S. Trustee Richard F. Clippard filed a complaint against him in September, asking the court to refuse to discharge him from his debts because he fraudulently made a false oath regarding his ownership and interest in assets.

Justice estimated between $500,000 and $1 million in debts when he filed for bankruptcy and he listed dozens of debtors, including child support arrearages of $14,600, taxes, various credit card and loan debts. At the time, he owned several Pike County properties and had unexpired leases for the funeral home and interests in the Disney Vacation Club, Marriott's Kauai Beach Club Vacation Ownership Program and the Shenandoah Crossing Resort and Country Club.

Clippard claims that Justice reported to have transferred no property outside the ordinary course of business within two years of filing for bankruptcy, but his 2005 tax return noted the joint sale of property on Slone Branch, owned by Justice and his brother, for $120,000. Half of the money went to Justice, and he used it to pay mortgages that he and his wife, Chasity Justice, entered into before they filed for divorce in 2003. The divorce case, according to the documents, isn't finalized, and Chasity Justice filed an adversary complaint, seeking a $59,000 judgment against her husband and the return of the debt payment.

Justice's 2005 tax return notes his interests in four companies, Clippard alleges in the complaint, but Justice reported in the bankruptcy case that Justice Funeral Home, also previously known as Magical Moments, Inc., was the only business in which he was an officer, director, partner or managing executive.

If the judge decides that Justice provided false or fraudulent information for his bankruptcy, he or she will deny Justice's discharge in the bankruptcy case, marking him responsible for his debts. If the judge rules against Justice, his assets will be sold, the money will be forwarded to his creditors and he will personally be responsible for the remaining balance of debt. It will be as if he never filed for bankruptcy. The case is scheduled for trial in May.

The funeral home was incorporated under Justice's name through the secretary of state several years ago, but Secretary of State Trey Grayson issued an order of administrative dissolution for the funeral home in 2004 because Justice failed to file an annual report. A spokesperson for the secretary of state said Justice could have listed his business under a sole proprietorship through the county clerk's office, but County Clerk Lillian Pearl Elliott said there has been no listing for Justice or the funeral home in the past three years. The business is listed as being inactive and in bad standing with the secretary of state.

Marvin Hensley, the owner of Hensley Development in Pikeville, loaned Justice money to use as a security for a 99-year lease on the property several years ago. When Justice defaulted on the loan and filed for bankruptcy, the lease returned to Hensley, who sub-leased the property to Paul Burchell, a former employee of Justice and the owner of Magoffin County Funeral Home.

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