Former Cemetery Owner Convicted in Theft Scheme

For more than a decade, Larry Deffenbaugh took his customers' money and agreed to put a certain percentage in trust, to be used later to pay for burial services.

But prosecutors say the former Calvert County cemetery owner spent most of the money on car payments, fishing equipment and dinners in Florida.

Deffenbaugh, 57, was convicted Wednesday of a felony count of running a theft scheme. He entered an Alford plea, meaning that he did not admit guilt but acknowledged that the state had enough evidence to convict him.

Stacey Campbell, who was the treasurer at Deffenbaugh's Southern Memorial Gardens, also entered an Alford plea to a charge of conspiracy to run a theft scheme.

But the case is far from over.

Outside the courtroom Wednesday, Deffenbaugh and his defense attorney, Robert Harvey, declined to comment because Deffenbaugh has not been sentenced. Joseph Chazen, an attorney representing Deffenbaugh in civil litigation, said that Deffenbaugh stole no money from customers and agreed to the plea deal so that he could move on with his life.

The prosecution contends that Deffenbaugh, who lives in Florida, ran a variety of schemes, bilking at least 551 people out of hundreds of thousands of dollars. Prosecutors say that he did not put money into trust accounts as he was supposed to and that he reported living people as dead to prematurely collect money from trusts. He also told customers that he was waterproofing caskets when he was not, said Kathryn Marsh, an assistant state's attorney for Calvert County.

Marsh has agreed to ask for a five-year prison sentence in exchange for Deffenbaugh's guilty plea. It is likely that Deffenbaugh will be given only probation because he has no criminal record, she said. He also must pay restitution by the time of his sentencing in September, restitution that is likely to come from a $1 million loan he made at the time he sold the cemetery.

That $1 million loan, in the form of a promissory note from the purchasers of the cemetery, lies at the heart of the civil case against Deffenbaugh.

Danny Martin and his company, Badtec, purchased the cemetery from Deffenbaugh in 2006. Martin said he began to notice problems in how the trusts were funded at Southern Memorial Gardens within a few months of taking over the business. He sued and began paying back the $1 million loan from Deffenbaugh into a court fund.

That fund will now be used to compensate victims, Martin said, adding that Deffenbaugh took almost $2.5 million.

"It's been a huge, huge loss for us financially," he said. "In fact, it is on record that we have agreed to make the public whole with $100,000 of our money above the million for contracts we may not know about."