Big Isle mortuary boss
gets 2 months’ jail time
HILO » Memorial Mortuary head Robert Diego, who pleaded no contest to stealing more than $500,000 from a funeral trust fund, was sentenced yesterday to two months in jail and five years' probation.
CORRECTION
Tuesday, June 22, 2004Bobbie Jean Diego was given a deferred acceptance Friday of her no-contest plea to first-degree theft. Her name was misspelled as Bobby Jean in a Page A3 article Saturday.
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He began serving the sentence immediately.
Circuit Judge Terence Yoshioka also sentenced Diego's estranged wife, Momi, to five years' probation for the theft.
Their daughter Bobby Jean Diego was granted a deferred acceptance of a no-contest plea. The deferral means she will have no criminal record if she commits no violations in the next five years.
Deputy Attorney General Rick Damerville, who prosecuted the case, had asked the judge to be lenient with Momi and Bobby Jean but sought a year in jail for Robert Diego.
"I'm disappointed," Damerville said outside the courtroom. "He should have got more time."
In court, Damerville revealed that the state Department of Commerce and Consumer Affairs knew in 1996-97 that money was missing from the Diego trust fund but did nothing.
"I'm sure there will be civil lawsuits," he said.
He also said, "There are other people (in Hawaii) doing the same thing, and it hasn't come to light."
Asked for an explanation by a reporter, he said, "I can't comment on pending investigations."
Yoshioka had to pass judgment in a case with many complications.
When the Diego family sold pre-need funeral plans, they were required by law to put 70 percent of the sales price in a trust fund. From 1989 to 2002 they did not.
They sold funeral plans at cut-rate prices, then used current proceeds to pay the costs of previously contracted funerals, said Robert Diego's attorney Brian De Lima.
"They should have filed for bankruptcy. What they did was try to save face without admitting they were not able to make the business run," De Lima said.
Despite the stolen money, all customers have received funerals, De Lima said. Since 2002, West Hawaii Mortuary, owned by two of the Diegos' daughters who are not under suspicion, has provided 92 funerals for Memorial customers, he said.
In April, Robert, Momi and Bobby Jean Diego each agreed to pay $50,000 in restitution to customers who want their money back, for a total of $150,000. With $100 monthly payments approved by the court for each family member, that would take about 42 years to pay.
Statements in court by customers yesterday ran 12-to-6 in favor of letting the Diegos continue doing funerals rather than going to jail.
How long the funerals can go on is uncertain. Robert Diego, 61, said he had a heart attack a few week ago, another a year ago, and needs a gall bladder operation.
The two-month jail sentence, to be served by Diego on alternate weeks, is designed to free him by his 62nd birthday in November so he can start collecting Social Security benefits, which can be used for restitution.
Damerville has urged customers who want refunds to call the attorney general's office, but he also warned those who hope to get their full money back, "You're going to be bitterly disappointed."
He also warned that the chances of abuse are going to increase.
"There are legislators out there who need to be looking at this issue because we are an aging population," he said.
