A recent U.S. Court of Appeals order cleared the way for certain information from Shirley Koch’s criminal case to be released to plaintiffs in two civil suits pending over the handling of their loved ones’ remains.
Koch is appealing the sentence imposed after she pleaded guilty to mail fraud/aiding and abetting in a scheme through which she and her daughter, Megan Hess, used Hess’ Sunset Mesa Funeral Directors to obtain body parts and sold them through Hess’ other business, Donor Services, Inc. Many such “donations” were made without the knowledge or permission of the next-of-kin, yet they were charged for cremations that did not occur, then given random cremains as part of a cover-up, according to the government’s summation of the case.
Koch and her daughter were indicted in 2020. Their guilty pleas came in 2022. Both are serving their time at the same federal facility; Koch was sentenced to 15 years and Hess, to 20.
Separately, Koch appealed a modified court order that allowed the U.S. Attorney’s Office to disclose limited files to litigants in two separate, multi-party civil suits that were filed in Montrose District Court before the federal case began.
A three-judge panel on the appellate bench dismissed Koch’s appeal of the modification order on March 26, finding “no nonfrivolous basis upon which defendant can challenged the (U.S.) District Court’s modification of the protective order.”
Koch’s motion “is wholly frivolous,” the ruling states.
At issue was the U.S. District Court’s June 2021 protective order in the mail fraud case, which limited disclosure of discovery (a specific type of evidence) to the defense, defendants and defense experts.
In 2023, after Hess and Koch pleaded out and were sentenced, the Denver firm Burg Simpson “requested a plethora of specific documentation from discovery” to use in two civil cases. The firm represents dozens of Western Slope plaintiffs in two multi-party lawsuits against the Sunset Mesa Funeral Foundation, Abachiche, et. al., and Espinoza, et. al. These are based on allegations similar to the facts of the federal mail fraud case.
After the Burg Simpson request, the U.S. Attorney’s Office made a motion to release two sets of files for each victim in the private litigation, reasoning there was no other way for the plaintiffs to obtain them “without undue hardship,” because the records were in the FBI’s possession.
Koch and Hess both opposed the motion, arguing that because they were appealing their sentences, the criminal proceedings have not concluded, and those documents remain as evidence.
The federal trial court however found that the documents had been seized under a search warrant, rather than disclosed under a promise of confidentiality. The court modified the order as the USAO requested, finding Koch had not explained how modifying it would prejudice her rights, and that her “desire to make the civil litigation pending against (her) more burdensome is not legitimate prejudice.”
Koch’s own counsel previously filed a brief to withdraw from this appeal, advising the court it was “wholly frivolous.”
The appellate judges agreed. They said the lower court had jurisdiction to modify the order, regardless of Koch’s sentencing appeal. “There is no question that modifying a protective order to grant narrow discovery to different parties in a civil case involving different claims is a matter collateral to the substantive issues of the defendant’s sentence calculation,” their order states. Further, nothing before them suggested the lower court made an error by modifying the protective order, and there was no abuse of discretion.
Koch and Hess’ appeals of their sentences are pending a ruling. The Montrose civil cases are also pending.
Katharhynn Heidelberg is the Montrose Daily Press assistant editor and senior writer. Follow her on Twitter, @kathMDP.
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