It’s been nearly a year-and-a-half since Edna Queen lost her son, and despite forking over $1,100 for a headstone to mark his gravesite in Fairview Memorial Gardens in Sylva, there’s nothing but a patch of grass where his body lies.
No matter how many times she called Reg Moody, Jr., the owner of Moody Funeral Home and Fairview cemetery, the answer was always the same.
“He kept telling us it would be up next month, next month, next month, and it never did come. The money is gone. It is just awful,” Queen said.
Unfortunately, Queen isn’t alone. There are more than 30 complaints against Moody Funeral Home in Sylva for failing to deliver on grave markers that were paid for but never delivered. Some have been waiting for two or three years.
“To me, that is a lot of money,” said Queen, who’s cried over her son’s missing headstone many times. “Here I am 83 years old. People like me, we just draw Social Security. We just barely exist.”
Exactly when Queen and the 30 others like her will ever get the monuments they paid for is a mystery.
Moody Funeral Home closed in December after years of being dogged in court by collectors. Moody has resigned, and the funeral home has lost its state license.
A likely course of events at this point is a court-ordered liquidation — where all cash and assets are seized and sold off in order to pay what Moody owes, an amount that could clock in at more than half a million dollars.
The biggest problem for now, however, is figuring out exactly what Moody’s assets are. It’s been an ongoing dilemma that has frustrated the court, a string of collectors, and a court-appointed accountant tasked with sorting out Moody’s finances.
The court appointed an accountant to take over the financial side of Moody’s operations two years ago, but she has been stymied by Moody’s failure to turn over business records and bank statements, despite repeated court orders that Moody open his books.
Court documents reveal a tangled web of shell corporations, sole proprietorships and intermingled personal and business bank accounts that succeeded in staying one step ahead of those to whom Moody owed money.
A constant shuffling of business assets from one entity to another has been designed to “hinder, delay and defraud creditors,” according to Shelia Gahagan, a CPA in Waynesville who was appointed to act as a receiver.
Court filings contend that assets once owned by Moody — from its building, to vehicles, to equipment, to the business operation itself — have been siphoned to other entities in hopes of making them untouchable by creditors.
Further, income received by Moody has been placed in a personal bank account kept secret from Gahagan, court filings claim.
“Mr. Moody, Jr. opened a business account in his personal name, has deposited business funds into his personal account and has retained the profits of the business,” Gahagan wrote in court filings.
Moody funneled money from the funeral home into a personal account as part of the concerted and systematic effort to shield profits from collectors he owed money to, court filings claim.
Moody Funeral Home has been the target of a civil lawsuit dating back five years by a casket company owed $176,000 for coffins it delivered but was never paid for.
Last fall, the court finally threatened to hold him in contempt if he continued to stall Gahagan’s efforts to probe the finances and assets of the business — a threat that resulted in Moody resigning and the funeral home being shut down.
Exactly where those waiting for their tombstones are in the line of people owed money by Moody isn’t clear. In addition to money owed to the casket company, Moody also owes back state and federal taxes.
Another complaint against Moody has been the upkeep of his two cemeteries, namely Fairview Memorial Gardens in Sylva and Swain Memorial Park in Bryson City. Since the funeral home shut down in December, Gahagan has tapped limited businesses funds to perform basic maintenance that had been neglected in the cemeteries.
“He has received payments for services he has failed to perform, and most of these issues have been ongoing for years,” according to court papers filed by Gahagan. “Maintenance and performing services paid for are normal operations of a business.”
The ongoing saga involving Moody Funeral Home is common knowledge in Jackson County, but people such as Queen who already purchased burial plots in Fairview Memorial were over a barrel, she said. If they tried to buy their monument from another company, or if they wanted the funeral service performed by another funeral home, Moody would charge them extra for digging the grave or setting the stone, in effect forcing them to go through his funeral home, Queen said.
Moody Funeral Home in Sylva has been accused of hiding its assets and income to avoid paying bills in violation of a court order, according to the latest filing in an ongoing lawsuit.
Moody Funeral Home was sued in 2007 by a casket company after failing to pay for coffins it had ordered, according to court filings. The court sided with the casket company and ordered Moody Funeral Home to pay $176,000 in 2008.
However, Moody Funeral Home claims it has no assets to its name nor any income and therefore hasn’t paid.
Meanwhile, funerals continue to be conducted out of the building. The sign still says Moody Funeral Home, as do those answering the phone at the business. And the same man still runs the business now as before, namely Reginald Moody Jr.
However, Moody claims he is running the business as a different entity now. Before, Moody Funeral Home was run by a corporation called Wings Aviation, and now it is being run by Moody Services.
Wings — not Moody Services — is the one named in the lawsuit. While Wings used to run the funeral home, it doesn’t any more.
“Used to does not count,” Moody said. “Wings Aviation has no affiliation with Moody Funeral Home or any of its businesses. Moody Funeral Home is run entirely by Moody Services.”
Moody was the president of Wings and is the sole proprietor of Moody Services, according to court filings. Moody said Wings ceased to do business in December 2007 — timing that coincides with the lawsuit by the casket company.
An accountant appointed by the court to investigate the finances surrounding Moody Funeral Home filed a report this month describing a tangled web of corporate entities designed to “hinder, delay and defraud creditors,” according to Shelia Gahagan, a CPA in Waynesville.
Specifically, Gahagan shows how assets once owned by Wings — from its building, to vehicles, to trade name — have been siphoned to other entities in hopes of making them untouchable by creditors, the court filing claims.
“It is certainly my position at this juncture that I will request the shareholder to repay any monies and to return any property taken from the corporation,” Gahagan wrote. “It appears if the shareholders would return money and assets they have taken, all the creditors could be made whole.”
Jeff Norris, a Waynesville attorney who represented the casket company, said Gahagan’s investigation confirms “a lot of what I suspected.”
“I have a client with a substantial judgment, and this individual has been taking money out of the corporation,” Norris said. “He has gone in and used it as his personal checking account.”
Gahagan was appointed the receiver in hopes of uncovering assets in Wings’ name that could be used to pay more than $400,000 in debts, owed not only to the casket company but the IRS and others as well.
The court gave her discretion to investigate the finances of all the business operations being conducted out of Moody Funeral Home. But Gahagan said she has not been given full access to the books and records.
Fred Jones, an attorney representing Moody, said that Gahagan is looking into more than she is entitled to, taking the “broadest possible view to expand the search for assets.”
Moody has an appeal filed with the N.C. Court of Appeals protesting the scope of Gahagan’s investigation. Multiple businesses can and are operated from a single address. The court should have tailored Gahagan’s investigation only to Wings, not to the other entities that now run funeral home operations.
“It appears they are wanting to not accept there is a difference between Wings Aviation and Mr. Moody individually,” Jones said.
Moody said the report by Gahagan makes incorrect conclusions.
“I would caution you to be very skeptical of that report. Most of the report is wrong,” Moody said.
A court filing rebuking inaccuracies in the report has been prepared by Sylva Attorney Jay Coward, but has not yet been filed. Coward did not return phone calls seeking comment due to a busy schedule, his assistant said.
The next step in the court case is unclear. The judge appointed to the case, Zoro Guise, could make a ruling based on Gahagan’s report and the rebuttal by Moody. But Jones hopes there will be a hearing.
“This is a report by a receiver, whether it is true, false, mistaken, misunderstood — these are nothing more right now than allegations,” Jones said.
An accountant tasked by a Superior Court judge with taking control of Moody Funeral Home in Sylva said she couldn’t fulfill the order because of a state-licensing issue, and questions about who is on the property lease.
In a Sept. 13 court filing, Sheila Gahagan, court-appointed receiver for Wings Aviation Inc., listed in the filing as “doing business as” Moody Funeral Home, also asked the court to consider the possibility that there have been efforts to “hinder, delay and defraud creditors.”
Reginald Moody Jr., identified by Gahagan as president of Wings Aviation/Moody Funeral Home, said in response Tuesday: “Wings was foreclosed on and ceased doing business October 2007. And, from that date forward, Moody Services has operated the funeral home. The whole thing is in the North Carolina Court of Appeals right now.”
Gahagan was appointed receiver in December 2009. Neither she nor Moody could be reached for comment Tuesday before presstime.
“In the time since my appointment, I have struggled to locate and review documents, to trace financial transactions, as well as identify and interview those who have helpful information,” Gahagan wrote in the filing.
The accountant told the judge that she has asked the North Carolina Funeral Service Board to revoke or suspend Moody Funeral Home’s license because of failure to comply with the licensing laws. The state laws, Gahagan said, require a funeral home to only operate under the name listed on the application, and stipulate a new application for any change in ownership.
Gahagan said the license filed for Moody Funeral Home this year was under a sole proprietorship owned by Moody; previously, the filing has been under Wings Aviation.
Additionally, Gahagan said, “There are questions of Coward, Hicks and Siler (law firm) and Jay Coward’s involvement in the transfer of Wings assets to Mr. Moody and his father, Mr. Moody Sr. and the purpose of those transfers.”