Mortuary owner accused of keeping $90K in death benefits

The owner of Affordable Casket & Moana­lua Mortuary is facing charges that he pocketed more than $90,000 of state death benefit money meant for survivors who paid him for burial, cremation and funeral services of loved ones.

An Oahu grand jury returned an indictment Thursday charging Claus Z. Hansen with 29 counts of theft, money laundering and racketeering.

State Circuit Judge Steven Alm set Hansen’s bail at $250,000.

The indictment charges Hansen with failing to pay out Funeral Payments Program money the state had authorized between April 2009 and May 2013.

Survivors of people on Medicaid-funded state assistance programs can apply for a benefit of up to $800 to help pay for burial, cremation and funeral services. If the state approved the application, it paid the money to the vendors who provided the services. The vendor, in turn, was supposed to reimburse the survivors the amount of the benefit.

The state Department of Human Services, whose Med-Quest Division administers the Funeral Payments Program, has since changed the program rules requiring death benefit payment to be made directly to the person who submitted the application.

Thursday’s indictment names eight survivors who paid Hansen for burial or funeral services and to whom Hansen failed to reimburse the state-approved death benefits.

Hansen is charged with second-degree theft for each survivor he allegedly failed to reimburse.

The indictment also includes a supplement with a list of the names of 118 more survivors Hansen allegedly failed to reimburse. He is charged with first-degree theft for 118 plus three unnamed survivors.

The state is also listed in the indictment as a victim to first-degree and second-degree theft.

State law enforcement officers raided Hansen’s business at Kikowaena Street in Mapunapuna in May 2013.

Investigators from the state Department of the Attorney General seized files and computers.

State sheriff deputies arrested Hansen but later released him without charges.