Montrose, CO

Megan Hess: Former funeral home owner ordered to pay restitution to families she scammed

Lavinia Thompson

A judge ordered two women who formerly ran a funeral home and organ donor service to pay a hefty restitution to the victims, who paid for cremation services, only to discover their loved ones’ remains had been sold in a body-brokering scam, according to a report by the Montrose Daily Press.

Megan Hess, 45, and her mother, 68-year-old Shirley Koch, pleaded guilty in July 2022 to one count of mail fraud, after both women were accused of selling bodies and body parts to third parties without the consent or knowledge of families, the 2020 Department of Justice indictment alleges.

The mail fraud convictions allege that Hess and Koch gave families back remains that weren’t those of their deceased loved one, and mailed body parts infected with diseases to buyers while forging paperwork to claim they were disease-free, the indictment states.

Courthouse News notes that mail fraud charges were the only laws applicable to the women’s activities, as at the time there were no laws regarding the sale of bodies meant for burial. Colorado finally passed a bill in 2020 which makes it a class 6 felony to commit any offenses against the remains of a human. Erin Smith, who went through Sunset Mesa’s funeral services for her mother, only for her mother’s remains to be sold off, spoke at the sentencing.

“I can barely believe we are here for a mail fraud charge because their crime is so heinous we barely have charges for it,” Smith said.

On March 6, 2022, United States District Judge Christine Arguello ordered the women to pay $436,427 in restitution to the people who lost trusted them and their services of the now closed Sunset Mesa Funeral Home, the Press says.

Courthouse News adds that this gives each of the 331 victims around $1300 to make up for the cost of funeral services never received. Hess and Koch appeared via video for the hearing after citing transportation difficulties.

Hess protested that the next of kin of decedents didn’t qualify as the legal definition of crime victims under the Mandatory Victim Restitution Act and therefore shouldn’t receive any payment from the lawsuits against her and the Sunset Mesa Funeral Foundation, the Press says.

Hess founded the Sunset Mesa Funeral Home in 2010 in Montrose, Colorado, and in 2009, also founded the Sunset Mesa Funeral Foundation, wishing to provide “assistance to community members who have no resources for funeral/cremation services”, offering such services for as low as $1000, according to the 2020 indictment.
Megan HessPhoto byMesa County Sheriff's Office

In a written statement, the United States Attorney’s Office (USAO) argued that the next of kin did indeed meet the definition, the Press says.

“Essentially, the defendants devised a scheme and artifice to obtain money and property from decedents and their families who relied on the defendants’ false statements and misrepresentations when engaging the defendants for funeral and burial services,” the statement reads.

“In many cases, the defendants never discussed authorization to donate parts of the decedents’ bodies, but then sold parts of those individuals’ bodies,” the USAO response continued. “In other cases, the defendants obtained limited consent to donate small or specific portions of decedents’ bodies, often by lying about how those parts would be used, and then exceeded the scope of the limited consent by selling additional or different body parts.”

Hess also argued that those who filed suit against her and won previous judgments should receive a smaller payment from the restitution ruling, the Press says. Assistant U.S. Attorney Tim Neff said this would apply in cases where the payments were recovered, but that didn’t happen, and Hess hasn’t provided proof that those who sued actually recovered any money. Only one victim received a sum of $728.

“In many cases, the defendants did not obtain consent and then sold those body parts, or received consent and lied about what happened to the bodies. In most cases the next of kin are the ones the defendants lied to in order to propagate their scheme,” Arguello said, according to the Courthouse News report.

The FBI tracked some remains as far away as the United Arab Emirates, while others were likely plasticized for use in museums or for medical students, Courthouse News says.

Neff and Arguello discussed what Neff called the fairness standpoint of paying restitution to the insurance companies, as they paid a portion of funeral expenses, the Press reports. Arguello insisted the payments should go to the victims, and while Neff agreed, he pointed out that he was applying statute. Arguello told him it “doesn’t seem right” as the companies already got paid premiums.

Defense attorney Martha Eskesen also noted that insurance companies don’t always make back in premiums what they paid out, yet Arguello insisted that the payments would go first to the victims, and anything leftover will go to the insurance companies, the Press says. Arguello also refused to pay restitution to any of the body brokering firms who profited from any of the remains, as none had requested restitution.

Arguello also prohibited Hess and Koch from opening new lines of credit or entering into any financial agreements without prior approval from the federal probation department, the Press reports. If Hess or Koch makes any money from tax returns or otherwise, the funds are to go towards the restitution amount they owe.

Hess is also prohibited from entering the funeral home business again, though Arguello noted that at Koch’s age, it seems redundant to put the same restriction on her, since she is serving a 15-year sentence as it is, the Press says.
Shirley KochPhoto byMesa County Sheriff's Office

Courthouse News reports that the federal government also seized two properties worth roughly $536,000 and a 2011 GMC Yukon. It is only a sliver of money against the other $8.7 million Hess and Koch face in separate lawsuits. Dozens of relatives of the deceased who went through the funeral home have filed lawsuits. U.S. Attorney Cole Finegan said he hopes the restitution order brings closure to the families.

“The illegal and reprehensible actions of the funeral home operators have caused immeasurable harm to the families of the victims,” Finegan said. “Today's restitution order serves as a vital step towards providing some measure of justice for those who have been so deeply affected by this heinous crime. We hope this brings closure and healing to those who have suffered tremendous loss.”

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Long time true crime lover and blogger who has spent years reading and studying criminal psychology. I also write mystery fiction books, and have a diploma in journalism.


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