Browsers that can not handle javascript will not be able to access some features of this site.
Skip Navigation
Attorney General Bill SchuetteMichigan.gov
Michigan.gov HomeAG Home | Site Map | Contact AG | Related Links | Online Services | FAQ
Printer Friendly Version Printer Friendly   Text Only Version Text Version  Share this page.
Cox Takes Legal Action Against Owner of 28 Michigan Cemeteries

Contact:  Rusty Hills, Media Contact 517-373-8060
Agency: Attorney General


September 5

December 19, 2006

            LANSING - Attorney General Mike Cox today announced that he has successfully obtained a temporary injunction and the appointment of a conservator to operate 28 Michigan cemeteries owned by Las Vegas-based company Indian Nation, LLC and its owner, Clayton Smart of Okmulgee, Oklahoma.  Smart is also the majority owner of Mikocem, LLC, another Las Vegas- based company that conducts business under the assumed names of the cemeteries, and Summerfield, LLC, a Canton, Michigan-based firm that owns and manages the trust fund assets of the cemeteries.

            "The operation of these 28 cemeteries will not be jeopardized.  Families and loved ones should be reassured that the conservator will preserve these vital trust assets in order to meet the future needs of the cemeteries," Cox said.

            Cox filed a motion for a temporary injunction and request to appoint a conservator in Ingham County Circuit Court earlier today, and Judge James R. Giddings granted the motions and appointed Mark Zausmer as a conservator to operate the 28 cemeteries and to properly maintain and invest their trust assets under Michigan law.  In addition to identifying trust fund assets and liabilities, Mr. Zausmer will ensure that the cemeteries continue to operate in a normal manner.  The order also appointed LaSalle Bank as the trustee over the assets currently in the cemetery trust funds.

            Smart, who purchased the 28 cemeteries in August 2004, is also the owner of cemeteries and funeral homes in Tennessee, Arkansas, and Oklahoma.  In February 2006, the Tennessee Office of the Attorney General contacted Cox's office with concerns about Smart's handling of cemetery trust funds.  Cox's office contacted the Michigan Department of Labor and Economic Growth (DLEG), and the two departments initiated a joint administrative investigation into the Michigan trust accounts.  

            "Consumers should not be alarmed by today's activities.  These actions are the most effective way to ensure that consumers' investments are protected and, most importantly, that their loved ones' remains are secure," said Robert W. Swanson, Director of the Michigan Department of Labor & Economic Growth, which regulates cemeteries.

            The investigation revealed that, at the time Smart purchased the 28 Michigan cemeteries, cemetery trust funds were valued at approximately $61 million, but that Smart subsequently invested approximately $31.5 million in Oklahoma-based Quest Minerals & Exploration, Inc.  The investments were in the form of unsecured promissory notes and a loan backed by highly speculative Quest oil and gas leases.  At the time of this transaction, several of Smart's family members were officers of Quest Minerals & Exploration, Inc., raising questions about self-dealing in imprudent investments.  In addition, Smart invested another $25 million in high-risk mutual funds. 

            According to Cox, "Michigan law requires that money placed in cemetery trust accounts be invested prudently.  The investigation determined this clearly was not the case."

            In addition to the actions taken by Cox, DLEG's Bureau of Commercial Services today filed an administrative complaint against each of the 28 cemeteries that are licensed and registered by the department.  The administrative complaint contains six counts alleging violations of the Cemetery Regulation Act and Prepaid Funeral Cemetery Sales Act.  The complaint alleges that, contrary to the Michigan Cemetery Regulation Act, the cemeteries failed to properly maintain endowed care and merchandise trust funds, failed to prudently invest cemetery trust fund assets, failed to timely file the 2005 annual reports for the cemeteries, and improperly used trust assets to purchase personal life insurance policies for Clayton Smart.  It further alleges that the cemeteries violated the Prepaid Funeral and Cemetery Sales Act by failing to properly deposit money received from the sale of prepaid funeral contracts as required by the act and by failing to timely file the 2005 annual reports required under the act.  Michigan Cemetery Commissioner Andrew L. Metcalf, Jr. also filed a Cease and Desist Order that prohibits Mr. Smart and Indian Nation from further violating the Cemetery Regulation Act.  Members of the public who have questions and concerns regarding the operations of the 28 cemeteries owned by Clayton Smart and Indian Nation may contact DLEG's Bureau of Commercial Services toll free number at 1-866-913-3534, by fax at 1-517-241-9392, or you may send an email to BCSCEMETERIES@michigan.gov.  

            A listing of the 28 cemeteries owned by Indian Nation, LLC is attached.

            Concluded Cox, "By teaming up with the Department of Labor and Economic Growth and taking the necessary corrective actions, I am confident that these cemeteries are now in good hands."

-- 30 --

Related Content
 •  Schuette Charges Corrections Officers, Inmate With Smuggling Drugs Into Prison
 •  Schuette Announces Closure of Two Abortion Clinics Operating Illegally without Proper Physician Ownership
 •  Schuette Charges Former Pontiac Fire Chief With Bribery, Racketeering
 •  Schuette Welcomes U.S. Supreme Court Review of Michigan's Challenge to Obamacare
 •  Schuette Files Suit to Dissolve Improperly Incorporated Abortion Clinics in Eaton, Saginaw Counties
 •  Schuette Announces Felony Charges for Massive ID Theft Scheme that Defrauded State of More Than $250,000
 •  Schuette Takes Great Lakes States' Fight Against Asian Carp to the U.S. Supreme Court
 •  Schuette Joins Chesterfield Township in Lawsuit to Close Marijuana Dispensary
 •  Schuette Announces Sentencing of Former River Rouge Official Convicted of Accepting $5,000 Bribe
 •  Schuette Leads 25-State Challenge to Burdensome EPA Regulations that Threaten Jobs, Endanger Affordable Electricity Rates
 •  Schuette Announces Conviction of Former S.E. Michigan Medical Center Director for $3.3 Million Medicaid Fraud
 •  Schuette: Ruling Against Massive Medical Marijuana Grow Operations Welcomed by Law Enforcement, Public
 •  Public Integrity Unit Charges Former Highland Park Principal with Embezzlement from School Union
 •  Bouchard, Schuette Announce Arrest of 26 in Southeast Michigan Felony Child Support Sweep
 •  New A.G. Coalition Tells Congress: Put Army Corps to Work and Close Chicago Waterways
 •  Schuette Statement on Passage of Legislation Creating a State Ban on Partial-Birth Abortion
 •  Schuette Announces Twenty Year Max Sentence, $48 Million Recovery from Cemetery Embezzler Clayton Smart
 •  Schuette Announces Sentencing of Former Highland Park Charter School Treasurer Convicted of Embezzlement
 •  Schuette Pledges Aggressive Fight for Great Lakes at Asian Carp Summit Hosted by State Tourism, Conservation Leaders
 •  Schuette, Johnson Announce Charge Against Dispensary Owner For Offering Free Marijuana for Votes

Michigan.gov Home | AG Home | State Web Sites
AG Web Disclaimer | Security Policy | Accessibility Policy | Link Policy | AG Privacy Policy | Privacy Policy | Michigan News | Michigan.gov Survey


Copyright © 2001-2012 State of Michigan