On Tuesday, August 11, 2026, the Tennessee Board of Funeral Directors and Embalmers moved to summarily suspend the license of Mundy Funeral Home in Jamestown and the funeral director license of Chad Mundy. WVLT reported the suspensions came during a meeting in Nashville. The board's legal representatives said the emergency action was needed "to protect the public's health, safety and welfare," and state officials said the funeral home committed fraud posing an immediate risk to the public, according to WVLT.
A summary suspension is an emergency step that takes effect before complaints are resolved. Under this one, Mundy cannot work as a funeral director and the funeral home cannot operate until then, WATE reported on August 12.
At issue are death claims, the requests a funeral home files with a life insurer to collect on an insured person's policy. On July 22, state auditors examined the funeral home's preneed records covering January 1, 2025 through June 30, 2026. Preneed sales let customers arrange and pay for a funeral in advance of death. The audit found three case files with no death certificate, 13 with no payment records from the insurance company, and 15 contracts with no documentation at all, the board's legal representative said, according to WATE.
Because the records were missing, an auditor asked Homesteaders Life Company, the insurer backing the preneed policies, for its payment documents. Those documents showed at least five policies with confirmed proof the claimed person was still alive. One claim was filed for Mundy's own wife, whom Homesteaders confirmed is alive. Investigators believe approximately a dozen or more fraudulent death claims were filed. The legal representative said the fraudulent preneed claims exceeded $80,000 in total, including approximately $70,000 in fraudulent funds found by Homesteaders and approximately $17,840 tied to individuals in a guardianship program, WATE reported.
By the Numbers
How the fraud unraveled
Homesteaders first learned of the fraudulent filings when a customer tried to transfer a preneed policy to a different funeral home, and the insurer discovered Mundy had already filed a death claim for that living person, the company said in a summary presented to the board. The transfer attempt exposed the claim.
Homesteaders then asked Mundy for proof of death on his recent claims. He ignored those requests, the legal representative said, according to WATE. Homesteaders is believed to be the only insurer targeted, the representative said. The company is now working to contact affected customers and restore their funds, though officials warned some may lack valid policies, which complicates recovery, 3B Media News reported.
The June cremation case
The suspensions also build on WATE reporting published June 26, 2026, about a family that received someone else's cremated remains. Amy Stockton told WATE her family received what they thought were the ashes of her mother-in-law, Janie Stockton, after a January 10 funeral service. The family's lawyer was told by the crematorium that her ashes went uncollected by Mundy Funeral Home for more than 50 days after cremation. The urn and the keepsake pendants the family received did not contain her ashes.
The family had asked for donations to Mundy Funeral Home in lieu of flowers to help cover funeral expenses. Stockton said the family later learned it did not receive all of the donated funds. A refund check the family received bounced due to insufficient funds, she told WATE.
What the board said
The strongest language came from the board's legal representative, who is not named in the reports. "Legal would represent to this board that by filing multiple fraudulent death claims, Mundy Funeral Home has undoubtedly shown that they cannot be trusted with the public's finances, whether that be on an at need basis or a pre-needed basis," the representative said, WATE reported.
The funeral home's pre-need seller registration had already been suspended before the meeting, the representative said. Under Tennessee law, Mundy could have kept selling preneed services without that registration until his funeral director license itself was suspended. Mundy was informed of the meeting and had the right to attend with legal counsel. He did not attend.
The human cost
"Nothing can adequately describe the pain of learning that we lost her, grieved her, and I don't even think we've properly grieved her, and we've had an urn sitting in our home since January until May that we believed was her," Amy Stockton told WATE in June.
Co-owner Chad Mundy apologized in a WATE interview at the time. "If there was a way to take that hurt and anguish away that my mistake has caused, I would do that," he said.
What comes next
The TBI investigation remains active. A TBI spokesperson told WATE in June that the agency is "investigating allegations involving Mundy Funeral Home at the request of Eighth Judicial District Attorney Jared Effler." Mundy is under investigation and has not been charged, according to the reports.
The board may choose to permanently suspend the licenses once the complaints are resolved, WATE reported. The legal representative said Mundy has told him there is "a significant interest in surrendering his funeral director's license, the funeral home's license, and the pre-need seller's license." State officials said during the August meeting that several civil lawsuits are likely to be filed against the funeral home, WVLT reported. None had been filed as of August 26. A search that day of Tennessee's online court index, CaseFinder, showed no civil or criminal cases naming Mundy Funeral Home or Chad Mundy. The Fentress County Circuit Court clerk's office, reached by phone August 26, said it had no information on the case and was waiting on the TBI.
If a preneed customer dies while the license is suspended, the funeral home cannot provide the promised services. Returns of cremated remains to families are still permitted, the representative said.
- The scheme surfaced when a living customer transferred a preneed policy and the insurer found a death claim already on file for that person.
- Fraudulent claims exceeded $80,000, including roughly $70,000 in fraudulent funds found by Homesteaders.
- The summary suspension is temporary, and the board can make it permanent once complaints are resolved.
*Update, Aug. 27: Homesteaders Life Company was asked to comment for this story before publication and did not respond by press time. After the article published, the company's vice president of marketing communications, Danielle Burmeister, said in an email: "We are opting not to comment on the story."*
*Sources: WATE (Aug. 12, 2026), WVLT (Aug. 13, 2026), 3B Media News (Aug. 12, 2026), WATE (June 26, 2026), Tennessee Board of Funeral Directors and Embalmers meetings page (tn.gov)*
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