Jail term begins for mortuary owner convicted of theft

The former owner of Affordable Casket and Moanalua Mortuary was sentenced to and began serving a 30-day jail term Tuesday for stealing state death benefits from customers.

The mortuary’s new owner has renamed the business Ballard Family Moanalua Mortuary.

The jail term is part of a four-year probation sentence to which Claus Z. Hansen agreed when he pleaded guilty in October to seven counts of theft. The other terms of his negotiated sentence with the state attorney general require Hansen, 51, to perform 300 hours of community service, pay $50,000 into a state fund for crime victims, write letters of apology to all of his victims and finance a $2,466 escrow fund for victims the state has so far been unable to locate.

By the time he pleaded guilty, Hansen had repaid most of the $91,866 in state death benefits he withheld from customers between April 2009 and May 2013.

The state offers survivors of people who were on Medicaid-funded state assistance programs up to $800 to help pay for burial, cremation or funeral services. Previously, under the state’s Funeral Payments Program, survivors applied for the benefit, the state paid the money to the vendors who provided the service and the vendors were supposed to reimburse the survivors.

Instead of reimbursing his customers, the state said Hansen instructed his employees not to contact the survivors when he received the money or to ignore them if the survivors asked for their refunds.

Hansen was charged with withholding 129 reimbursements.

The state Department of Human Services, whose Med-Quest Division administers the Funeral Payments Program, has since changed program rules to allow the state to pay the death benefit directly to survivors.