Former Cemetery Owner Gets Probation

Customers Bilked Out of $1 Million

The man accused of bilking hundreds of people out of more than $1 million they thought was being set aside for burial services was sentenced to five years on supervised probation Wednesday.

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

According to prosecutors, Deffenbaugh orchestrated a variety of schemes through his former business, Southern Memorial Gardens, using more than $1 million that customers gave him for burials to buy fishing equipment and dinners in Florida.

Before his sentencing, Deffenbaugh had agreed to forfeit repayment of a $1 million loan he made to the man who bought Southern Memorial Gardens from him in 2006. That money was to be used to repay victims.

"My number one concern was to make sure all of our victims were made whole and to make sure they were not out any money, and that they could rest easy," said Kathryn Marsh, as assistant state's attorney in Calvert County. She had asked that Deffenbaugh serve five years in prison.

Deffenbaugh was sentenced by visiting Judge William D. Missouri, who said that he was honoring comments made earlier in the case by visiting Judge E. Allen Shepherd.

Shepherd, who died of cancer in July, had said that if Deffenbaugh paid back all his victims, his sentence would fall at the low end of Maryland's sentencing guidelines, which in this case recommend probation to six months in jail, Marsh said.

"It's an unfortunate thing that that's how the sentencing guidelines came down," Marsh said.

Deffenbaugh had sold Southern Memorial Gardens to Danny Martin and his company, Badtec, in 2006 for about $3 million. As a part of that sale, Deffenbaugh agreed to loan Martin $1 million in the form of a promissory note.

Within months, Martin began to notice problems in Southern Memorial Gardens' books. He turned his findings over to prosecutors, who confirmed his suspicions that Deffenbaugh had been running theft schemes.

Deffenbaugh had not set aside customers' money in trusts, and he claimed that people had died even when they hadn't in order to raid the trust money he had set aside. He also told customers he was waterproofing caskets or ordering headstones and other memorials when he was not, Marsh said.

Martin sued Deffenbaugh and began paying back the $1 million loan into a court fund, which had accrued about $158,000 at the time of Deffenbaugh's sentencing. That money will be put into a trust to pay back victims. That process will start in a weeks, said Martin, who has dropped his lawsuit.

Martin said that he was happy all the victims would be paid back but that he was disappointed Deffenbaugh was not given jail time. He also said that Southern Memorial Gardens will set aside an additional $100,000 in interest that accrues on the trust to honor contracts of victims who might not have come forward.

"At this point, I don't think there was justice done," Martin said. "It's going to take us a while to recover. We just hope the public understands that we went to battle."

Defense attorneys for Deffenbaugh could not be reached for comment.