Competency eval ordered for Sunset Mesa Funeral Directors body-scheme defendant

FBI and other investigators served warrants at the now-closed Sunset Mesa Funeral Directors in Montrose in 2018. Shirley Koch, who was indicted along with her daughter on mail fraud charges related to an alleged body-sale scheme, is to have a competency evaluation. (Montrose Daily Press/file photo)

One of two women indicted for mail fraud related to allegations of selling human remains without permission is to be evaluated for legal competency.

Shirley Koch, mother and co-defendant of former funeral director Megan Hess, through her attorney sought a court order for a psychiatric evaluation. The motion was granted after a brief hearing in U.S. District Court Tuesday, Sept. 21.

Koch is charged with mail fraud and aiding/abetting, as well as with transportation of hazardous materials and aiding/abetting for her alleged role in what investigators called a long-running “scheme” to obtain human bodies and then sell them for profit, without securing permission from next of kin.

Koch is accused of working with Hess, who once operated Sunset Mesa Funeral Directors in Montrose and an associated business, Donor Services Inc.

Both businesses closed shortly after the FBI served search warrants in 2018. Koch and Hess were indicted in 2020. The mail fraud counts relate to more than 30 decedents and the hazardous materials charges allege the heads of three deceased individuals who had tested positive for hepatitis-C were shipped without proper documentation, or with altered documentation.

The women deny the charges.

A trial date has been set more than once, only to be continued for procedural issues. It was not immediately clear how long Koch’s competency evaluation might take and if that would delay the current trial setting of Feb. 7, 2022.

“Due process categorically prohibits subjecting a defendant who is mentally incompetent to proceed to a criminal trial,” defense attorneys Stephen Laiche and Martha Eskesen wrote in a Sept. 2 motion for competency evaluation.

“Defense counsels have a good faith basis to question Ms. Koch’s competency based on the facts set forth in (motion).”

Because of medical privacy regulations, those facts were filed in a restricted document that is not publicly available. The public motion does not specify why Koch might not be legally incompetent to stand trial or to otherwise resolve her case.

A court can order a competency evaluation, including a psychological assessment when reasonable cause is shown supporting a belief that a person is suffering from a “mental disease or defect.”

If deemed incompetent, Koch could not be tried until she is found to be restored to legal competency.

Court documents indicated that Dr. Karen Fukutaki, a Denver-area psychiatrist, could be asked to perform the evaluation; however, the defense counsel was given 30 days to recommend an examiner to the court.

Federal Magistrate Gordon Gallagher on Sept. 21 found reasonable cause that Koch could be suffering from an issue that affects her ability to understand the proceedings against her or to assist in her own defense.

Koch must submit to the assessment and take any medication the evaluator deems appropriate. The evaluator must timely inform the court of the results.

The evaluator must also render a finding as to whether Koch is competent to waive “her right to trial and instead plead guilty in this matter,” Gallagher’s order says.

Koch will not have to pay the costs of the competency evaluation.

Once the competency report is completed, a competency hearing would be set in U.S. District Court.

Koch is also named — along with her husband, Alan, Hess and other parties — in several civil suits predating the indictment. (Alan Koch and the other civil defendants have not been charged criminally.)

The six suits made similar allegations: That the Sunset Mesa defendants had harvested and sold human remains without the consent and knowledge of next-of-kin, or that they sold more than what had been agreed to for donation.

In one of the cases, plaintiffs said Hess had returned ashes that were not the cremains of their husband and stepfather, but instead, ashes belonging to another person, who, by the contents of the container received, had been wearing a watch and an item with metal rivets. The deceased, Gerald “Cactus” Hollenback, was taken to Sunset Mesa in only his pajamas.

The Hollenback case was one of four that ended in default judgment, with the defendants ordered to pay hundreds of thousands of dollars.

Plaintiff Julee Glynn also won a substantial award over the handling of her deceased brother’s remains; a multi-party action by lead plaintiff Terri Thorsby also was successful, as was a multi-party case by lead plaintiff Chris Artrup.

The circumstances of the Hollenback case were among those cited by the Colorado Department of Regulatory Agencies in suspending Hess’ crematory and funerary registrations in 2018.

The department also found Sunset Mesa had returned substances other than human cremains — including concrete mix — to families and represented these as ashes.

Hess permanently surrendered her registrations under an agreement by which she did not admit fault.

Hess attempted to stay the judgment in the Artrup case, but was denied.

She also filed to stay the two remaining cases, which each entail dozens of plaintiffs and are captioned under the names of Jerry Espinoza and Maria Abachiche. Those filings made the same arguments that were rejected in her bid to stay the Artrup matter and the Denver firm representing plaintiffs in both Espinoza and Abachiche filed to strike those motions.

Katharhynn Heidelberg is the Montrose Daily Press assistant editor and senior writer. Follow her on Twitter, @kathMDP.

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Katharhynn Heidelberg is the Montrose Daily Press assistant editor and senior writer. Follow her on Twitter, @kathMDP.