Hobart funeral home employee appears in court on charges of misusing ‘pre-need’ funeral funds

March 12--A Hobart funeral home employee facing 20 charges for allegedly misusing customers' funds made her first appearance Monday in court.

Jacqueline Kraft, 67, is charged with 16 counts of theft, two counts of corrupt business influence and one count each of forgery and insurance fraud, Lake County court records show.

Between 2003 and 2015, people entered contracts with Kraft Funeral Home, at 370 N. County Line Road, for pre-need funeral services with the belief the funds "would be set aside to finance their funeral or cremation upon their death," according to a probable cause affidavit.

"After a funeral home accepts money for pre-needs funeral, the home has 30 days to deposit the money into a fund established for this purpose," according to the Indiana Funeral Directors Association in court documents.

But in multiple cases at Kraft Funeral Home, "it was learned no money was deposited into the trust fund," the affidavit states.

The Indiana Professional Licensing Agency has 16 requests for restitution from the pre-need consumer protection fund for Kraft Funeral Service, totaling $86,205.41, according to a spokeswoman last month.

Investigators told Jacqueline Kraft that "families wanted to know why" this was done, according to the affidavit, and Kraft said "they were trying to keep their head above the water."

"(Kraft) advised she knowingly took the money out, but her intent was to put it back," the affidavit states.

Kraft also forged signatures on documents, court records show. When investigators asked "if there were ever times where she did sign someone else's names," Kraft, "after a long hesitation," said that she "may have," the affidavit states.

Kraft, who is not a licensed funeral director, served as the secretary and treasurer at the funeral home, while her son, Russell Kraft Jr., became the president, according to the affidavit. Jacqueline Kraft "took care of the books," her son said in court records, "since day one."

The State Board of Funeral and Cemetery Services permanently revoked Kraft Jr.'s funeral license in 2015 after finding the funeral home lied about people dying in order to collect more than $31,000 in burial insurance policies, records show.

Customers told investigators the funeral home "look abandoned" and they were worried because they "heard of their closing," the affidavit states. While performing a search warrant in August 2015, investigators found "a casket in the first northeast viewing room was more than half filled with unopened mail, most dated from 2014," court records state.

The funeral home, meanwhile, continued to conduct funerals "against state law," the affidavit states.

Investigators asked Kraft Jr. "once the Indiana Attorney General brought the case against the funeral home and he was aware of (his mother's) actions why he wouldn't change the way the books were handled," according to the affidavit. Kraft Jr. told investigators that after the investigation "he gave up and knew the business was lost," court records state.

Jacqueline Kraft had "inconsistencies" and tried to deflect questions as investigators questioned her, according to the affidavit. She also said "her actions were caused by her thyroid medicine," court records show.

A number listed for Kraft Funeral Home was disconnected Monday.

Kraft is scheduled to appear in court again May 8, records show.

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