Family that runs mortuary ordered to pay $150,000
By Kevin Dayton
Advertiser Big Island Bureau
HILO, Hawai'i — Three members of a family that operates Memorial Mortuary in Hilo have been ordered to pay a total of $150,000 in restitution to funeral-plan customers.
Robert Diego, his wife, Momi, and their daughter, Bobbi Jean, pleaded no contest to theft charges last year for failing to maintain a trust account to protect the money collected from funeral-plan sales. They will be sentenced June 18.
Hilo Circuit Judge Terence Yoshioka on Friday approved a plan to have each of the three pay $50,000 in restitution to people who bought funeral plans from Memorial Mortuary Funeral Plan Inc., beginning with payments of $100 a month each.
Deputy Attorney General Rick Damerville said so far he has identified 137 people who paid from $400 to $9,000 for plans that were supposed to provide cremation, burial or other funeral arrangements.
The Diegos had financial difficulties in the mid-1980s and began using money coming into the trust fund to pay for funerals for people already in the plan, Damerville said.
Brian De Lima, lawyer for Robert Diego, said the family used the money from the trust fund to pay for funerals, not on themselves. He said the family ran into trouble because they didn't charge enough for the funeral plans.
The Diegos made arrangements to have West Hawai'i Mortuary, also run by family members, honor the funeral plans. De Lima said they have made good on about 40 plans since the Diegos were indicted on theft charges in 2002.
"They've been honoring these plans as presented," De Lima said. "They just don't have the wherewithal or the funds to provide refunds to these people."
Under a plea agreement, prosecutors can seek no more than a year in jail for the wife and daughter, but Robert Diego could face up to 10 years in prison.
Damerville suggested the Diegos may not be able to continue providing funeral services after sentencing, and he encouraged people to contact his office if they bought plans from Memorial Mortuary.
He said it is important that there be a complete record of what happened in the case so lawmakers can decide if new regulations are needed for the industry.
People who bought the Diegos' plans can write to Damerville at the Office of the Attorney General, 425 Queen St., Honolulu, HI 96813, or call 586-1160.
Reach Kevin Dayton at kdayton@honoluluadvertiser.com or (808) 935-3916.
