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Kern case gets D.A.'s attention By DAVID PRESZLER With a bankruptcy plan in place, investigators in the Kern Family Services' case are looking into whether criminal charges should be pursued in the misuse of millions in prepaid funeral and burial trust funds. David Kern, the former head of Kern Family Services, has been accused in state and federal court documents of misusing $4.3 million that should have been held in trust. Jackson County District Attorney Mark Huddleston has asked the state to determine whether criminal charges should be filed against Kern. Huddleston said his office has not reviewed any reports on the case yet and is working with the state on the matter. Thus far, the state's investigation has been conducted by the financial fraud unit -- which can pursue only civil penalties, not criminal ones. With Huddleston's request, the Oregon Department of Justice will look at the case to determine whether a criminal investigation is warranted, spokesman Peter Cogswell said. Cogswell said the state will report its findings to Huddleston, who will decide whether to pursue charges. The bankruptcy proceedings have revealed where at least a portion of the $4.3 million went. Wilson Muhlheim, Kern Family Services' attorney in the bankruptcy case, said David Kern used $1.5 million of it to purchase the company's Grants Pass businesses: Hull and Hull Funeral Homes, Hawthorne Memorial Gardens and the Southern Oregon Cremation Society. He said Kern used $400,000 to remodel his Yale Drive home and $700,000 to renovate the historic Hafer House. There has been no accounting for the remaining $1.7 million that was withdrawn. The state has accused Kern of spending some of the money on himself and his wife, Ingrid. Ingrid Kern filed for divorce in December 1998 but the divorce is not yet final. The bankruptcy plan calls for $5.1 million to repay to the trust fund through the sale of the Grants Pass businesses and, eventually, the Medford businesses. Other property owned by Charles Kern, David's father, will also be sold. Kern officials are negotiating with Service Corp. International, the former owner of the Medford businesses, to make up the remaining funds. Mail Tribune Copyright � The Mail Tribune 1999, Medford, Oregon USA