Former funeral home executive sentenced to more than two years in prison for embezzlement and tax fraud


Date: December 15, 2021


LOS ANGELES — A former executive of a Southern California-based funeral home company was sentenced on Monday to 27 months' imprisonment for embezzling more than $2 million from his funeral home employer and lying on tax returns he filed with the Internal Revenue Service.

Terry J. Harmon, 61, a resident of Orange County, was sentenced by United States District Judge Mark C. Scarsi. The Court found that Harmon abused his position of trust to embezzle more than $2 million and then failed to report the ill-gotten gains to the IRS. In addition to the prison term, Judge Scarsi ordered Harmon to pay a total of $2,567,848 in restitution to his former business partner and the IRS.

Harmon previously pleaded guilty to bank fraud and two counts of tax evasion. Harmon admitted that he stole money from his employer, Caring Funeral Service, Inc. ("Caring Funeral"), which owned and operated approximately sixteen funeral homes, mortuaries, and crematoriums in Los Angeles, Riverside, and San Bernardino Counties. From January 2009 through around April 2012, Harmon abused his position as the vice president and chief operations officer of Caring Funeral to steal money from Caring Funeral's bank accounts. Harmon embezzled money in several ways, including by diverting checks written by third parties to Caring Funeral into his personal bank account and using his business partner's signature stamp to cash and deposit checks for his personal use. Harmon used the money he stole to fund a lavish lifestyle including paying for a house, gambling, traveling, and dining out. Once Caring Funeral realized it was the victim of embezzlement, it contacted the FBI who assisted in the investigation.

Harmon also admitted that he lied on his federal income tax returns for tax years 2010 and 2011 and owes a total of $489,926 in income taxes.

"Terry Harmon stole millions of dollars from a funeral business to line his own pockets," said IRS-Criminal Investigation Special Agent in Charge Ryan Korner. "This strong prison sentence sends a clear message that thieves and tax cheats will be held accountable, and that all income is taxable no matter the source."

"The defendant represents one of the biggest threats to business - that of an insider who may possess the ability to manipulate and control financial records while having the knowledge to cover their tracks," said Kristi K. Johnson, the Assistant Director in Charge of the FBI's Los Angeles Field Office. "The FBI will continue to work with our partners at the IRS and the U.S. Attorney's Office to bring these challenging cases to light and hold those responsible to account."

IRS Criminal Investigation and the Federal Bureau of Investigation investigated this matter.

Assistant United States Attorney Cassie D. Palmer of the United States Attorney's Office for the Central District of California prosecuted this case.