The owners of Gatens-Harding funeral home have agreed to give up a portion of their business and be subjected to increased monitoring as part of a settlement agreement with West Virginia Attorney General Patrick Morrisey's office.
Chad and Billie Harding were ordered by a federal judge last year to pay an Iowa-based insurance company nearly $3 million for cashing in on pre-need funeral contracts for more than 100 people who weren't actually dead.
Morrisey's office announced Wednesday afternoon it had reached a settlement agreement with the Hardings after filing a lawsuit in 2015 in Kanawha Circuit Court. The Hardings have agreed to pay $25,000 to cover the cost of the state's investigation into their Poca-based business.
The settlement permanently prohibits Gatens-Harding, and any related businesses owned by the Hardings, from selling pre-need contracts or accepting payments for funeral services prior to death, a news release from Morrisey's office states.
The Hardings will also be required, under the terms of the settlement, to cooperate with an audit of all existing pre-need funeral plans. The Consumer Protection Division of Morrisey's office will contact consumers identified in the audit and give them the option to transfer their contracts to a different funeral home, the release states.
For nearly a decade, between 2005 and 2013, the Hardings cashed in on about $900,000 worth of pre-need funeral contracts for 111 people who weren't dead, according to allegations in a lawsuit filed in 2015 by Iowa-based Homesteaders Life Insurance.
For each submitted death claim, Gatens-Harding received payments ranging from $1,448 to $14,565.
The Hardings must pay three times the amount they bilked from Homesteaders, ruled Chief U.S. District Judge Robert Chambers, as damages can be tripled under the Racketeer Influenced and Corrupt Organizations (RICO) Act.
Chambers granted the insurance company default judgment in June, after the funeral home's owners and their lawyer, Jeff Woods, of Scott Depot, failed to respond to court orders and comply with court rules.
The deal with Morrisey's office is independent from the federal case against the Hardings.
"Our office prides itself on making sure businesses respect state law," said Morrisey in the release. "Pre-need funeral contracts are attractive to many consumers. Funeral homes offering that service must protect consumers and do so in a lawful manner."
The state Board of Funeral Home Examiners began proceedings last fall to attempt to strip Chad Harding of his funeral director's license. Harding, who is a former board of funeral home examiners president, in turn, filed a petition in Kanawha Circuit Court that attempted to stop the board from revoking his license.
Former Gov. Earl Ray Tomblin removed Chad Harding from the position after the allegations over pre-need contracts were filed.
Reach Kate White at kate.white@wvgazettemail.com, 304-348-1723 or @KateLWhite on Twitter.