A former Jackson County funeral director has been charged with fraud for swindling people who paid for their own funerals in advance.

Ronnie and Thomasine Riddle, 55 and 56, of Sylva systematically defrauded as many as three dozen funeral customers out of tens of thousands of dollars over a nine-year period, according to an ongoing investigation. The couple was running Melton-Riddle Funeral Home at the time but are no longer affiliated with the business.

The victims paid the Riddles up front to cover the cost of their funerals when they eventually died — but the money is now unaccounted for and the funeral services never provided, according to the charges.

So far, the Riddles have been charged with defrauding 13 people of $50,000.

But that’s only part of the picture.

The charges at this point represent only a portion of the funeral home’s customers whose money went missing after being paid to the Riddles, according to records on file with the N.C. Funeral Services Board.

In all, more than three dozen people have come forward saying they prepaid the Riddles — for a total of more than $150,000 that was not properly deposited into funeral accounts and is now missing, according to funeral board records.

The investigation appears to be ongoing, but it is unclear whether more charges could be forthcoming.

“The investigation into these activities is continuing and will be continuing as allegations come forward from people who may have been affected,” District Attorney Mike Bonfoey said.

Funeral homes are supposed to follow strict guidelines when people pay for a funeral ahead of time. The person who paid for their funeral upfront won’t exactly be around to make sure they get what they paid for, giving rise to clear state laws on how the money for prepaid funerals should be handled. The money must be set aside either in a designated trust fund or through an insurance policy. Either way, it essentially goes in a lockbox ensuring the money will be there to provide the services.

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All the charges filed to date against the Riddles involved insurance policies — or rather the lack of insurance policies, according to warrants. The Riddles gave customers fake paperwork, leading them to believe their money had been put into an insurance policy when in fact no such policy existed, according to the charges.

“They wrote these contracts, accepted the people’s money and gave them receipts, but the money was never sent to the insurance company,” said Tom Tucker, the new owner and manager of Milton Funeral Home, who has condemned the Riddles’ actions.

The current charges are all the result of a two-year investigation by fraud officers with the N.C. Department of Insurance and deal only with cases that involved fake insurance policies.

But there are potentially another two dozen victims who prepaid for funerals whose money was supposed to be placed in a designated trust fund but now can’t be located, according to the N.C. Funeral Board. These did not fall under the purview of the N.C. Insurance Department but instead would be investigated by local law enforcement or prosecutors.

Bonfoey said he could not comment other than to say “The investigation into the entire sphere of this activity is continuing.”

Tucker said he would not be surprised if more charges came along at some point to hold the Riddles responsible for all the additional victims.

“It looks to me like there would because there is quite a number of those,” Tucker said.

The N.C. Funeral Services Board doesn’t have a law enforcement arm and can’t launch a criminal investigation of its own. It did send two letters to District Attorney Mike Bonfoey in 2009 alerting him to evidence of felony embezzlement and fraud by the Riddles. The letters offered to help in an investigation should Bonfoey chose to initiate one.

“We reported to the local district attorney as required by law when ever there is embezzlement of premium money,” Harris said.

State fund re-pays victims

In the meantime, the N.C. Funeral Services Board has forked over $60,000 to pay back victims, and more is likely coming.

“We are still dealing with potentially $100,000 or more in claims,” said Paul Harris, head of the N.C. Board of Funeral Services.

Paying for funerals in advance is fairly common. Sometimes people don’t want their funeral expense to be a burden on their family. Others are trying to spend down their assets in order to qualify for Medicaid. And some are simply hedging their bets, locking in the cost of their funeral at today’s rates.

The N.C. Funeral Services Board tries to act as a check-and-balance, ensuring that people who pay cash upfront for a funeral will actually get the service they’ve paid for when the time comes.

A record of every prepaid funeral transaction is supposed to be filed with the state funeral board, which checks to make sure the money got deposited where it was supposed to be. The Riddles did not file paperwork with the state as required, however.

Failure to file the paperwork can result in a funeral director losing the ability to sell prepaid funeral services — and that’s exactly what happened to the Riddles in 2006, although evidence suggests they continued to do so anyway.

Harris said every couple of years there seems to be a dishonest funeral director somewhere in the state who pockets people’s money.

The state has a restitution fund to pay back victims in this predicament. The pool of money comes from a $2 fee tacked on to all prepaid funeral arrangements made in the state. The fund is taking a serious beating in the Riddle case, Harris said.

Harris said victims are pleased the state has such a safeguard in place when the money they thought they put toward a funeral is stolen by a funeral director, but ideally the funeral director would be held criminally responsible and have to pay restitution if the case can be proven.

Funeral home founder devastated

The Riddles ran Melton-Funeral Home for almost a decade before losing their license from the N.C. Board of Funeral Services. The license was revoked in 2009.

The funeral home was taken over by Thomas Tucker, a longtime funeral director in the region who had been working at the funeral home part-time. Tucker dropped the Riddles’ name from the business and went back to the original name of just Melton Funeral Home.

The turn of events has been heart-wrenching for the funeral home’s original founder, Frank Melton, Tucker said.

“Oh my goodness, it has hurt him,” Tucker said.

The Riddles worked for Melton for several years before becoming partners in the business. Melton even added their name to the business making it Melton-Riddle Funeral Home.

When Melton was forced into retirement after a heart attack, the Riddles took over the business completely.

Although Melton “when all this started breaking lose,” was no longer involved in daily operations, he was devastated, Tucker said.

“It just sent him into a tailspin,” Tucker said.

More than two years later, Tucker said he is still sorting out the mess. People continue to walk through the door following the death of a loved one believing they had squared away arrangements years ago — not only putting down cold, hard cash to pay for the funeral but working out details of the service, like who the pallbearers would be, which casket they wanted and what verses they wanted spoken.

“Of course, we have no record of it,” Tucker said. “I am a lost ball in high weeds. It has been a nightmare.”

While the Riddles no longer have a role in Melton’s funeral business, Ronnie Riddle has continued to work occasionally as a gravedigger.

“But that will be no more,” Tucker said. “I’ve had people tell me they didn’t want him even at the graveyard.”

Tucker has been in the funeral business for more than 40 years, including serving as the manager of Wells Funeral Home in Waynesville.