The Tennessee Board of Funeral Directors and Embalmers has officially suspended the licenses of Mundy Funeral Home and co-owner Chadrick “Chad” Mundy following an unannounced state audit that uncovered widespread record-keeping violations and alleged financial fraud.

State auditors visited the Jamestown facility on July 22, discovering severe documentation gaps that included missing death certificates, a lack of insurance payment records, and multiple files completely devoid of paperwork.

Insurance Fraud and Pre-Need Claims

Following the audit, investigators contacted Homesteaders Life Company, a provider of pre-need funeral insurance. According to the insurer and state regulators, the funeral home filed fraudulent death claims for at least five living policyholders, totaling approximately $70,000.

• Public Funds Impact: The board reported that Mundy allegedly received about $17,000 tied to individuals enrolled in a public guardianship program.

• The Discovery: The alleged scheme began to unravel when a customer attempting to transfer a pre-need policy to a different funeral home discovered that Homesteaders already had an active death claim on file for them.

• Customer Protection: Legal counsel stated that Homesteaders is actively working to contact impacted customers to restore their funds, though officials warned that some individuals may lack valid policies, complicating recovery efforts.

Mundy did not attend the board’s suspension hearing.

Separate TBI Investigation Underway

Concurrently, the Tennessee Bureau of Investigation (TBI) is leading a separate criminal inquiry at the request of 8th Judicial District Attorney General Jared Effler.

This investigation stems from complaints regarding the handling of cremated remains and finances for the family of Janie Stockton, who passed away on December 31. According to the family, a memorial donation refund check issued by the funeral home bounced, and a subsequent attorney inquiry revealed that Stockton’s remains had been left uncollected at the crematory for more than 50 days.