DENVER • Return to Nature Funeral Home owners Jon and Carie Hallford pleaded not guilty Thursday to more than a dozen federal fraud charges stemming from the discovery of nearly 200 bodies decomposing inside a funeral home the couple operated in rural Penrose in October.

The 15 federal counts pile atop 260 criminal charges at the state level — including “improper storage” of 189 bodies, abuse of a corpse, money laundering, forgery and theft.

The Hallfords were arrested in El Paso County on the new federal charges Sunday, made a brief court appearance Monday that was continued, and appeared in court on Thursday for arraignment and a hearing on detention. 

Both Hallfords pleaded not guilty to all 15 charges, but the bulk of the hearing Thursday — attended by a few loved ones of the deceased — was taken up by the detention hearing, the result of which led to Jon Hallford being detained indefinitely. 

The Hallfords have been out of custody at the state level after each posted a $100,000 surety bond this year. Thursday’s detention hearing determined if they would remain in federal custody until their federal case reaches a conclusion. 

Federal prosecutor Tim Neff spent nearly an hour arguing to the court that neither Carie nor Jon Hallford should be given a bond due to the likelihood that they would attempt to flee. 

‘Bittersweet’ demolition begins at Return to Nature Funeral Home

Neff pointed to the Hallfords’ arrest in Oklahoma, and the couple’s continued alleged attempts to avoid law enforcement in the month leading up to their arrest as proof of a flight risk. 

Defense attorneys the Hallfords argued that their clients’ continued success on bond at the state level should show the court that neither presents a flight risk, but Neff disagreed. 

“The stakes have now changed,” Neff said, referring to the new federal charges. “(The Hallfords) now have a great incentive to take off.” 

Neff described the federal charges faced by the Hallfords as two different wire fraud schemes. The first, and most discussed on Thursday, was the scheme to defraud Return to Nature customers by taking their money for cremation and burial services that did not occur to the tune of over $100,000, according to Neff. 

The second was misuse of federal small-business loan funds — about $880,000 — which was meant to offset the economic pain of the COVID-19 pandemic. But the Hallfords used it primarily on personal expenses, such as a car, personal vacations, entertainment, dining, a child’s tuition, jewelry and cosmetic medical procedures among other purchases, according to the federal indictment obtained by The Gazette. 

Neff stated that the Hallfords are facing approximately seven years in prison if convicted on the 15 wire fraud charges. The Hallfords’ attorneys stated they believe the expected sentence on federal charges won’t be as severe as the charges they face at the state level if convicted.  

Neff spent a considerable amount of time discussing Jon Hallford specifically, claiming that his involvement in the Return to Nature schemes was greater than his wife’s, and that he presented a greater flight risk than Carie Hallford. 

Neff cited one of Jon Hallford’s divorce cases in Oklahoma, where he failed to appear to divorce proceedings on three different occasions leading to a warrant being issued. Neff also said Jon Hallford still owes over $22,000 in child support to his ex-wife from the divorce. 

More aggravating factors presented by Neff were new allegations currently being investigated by Colorado Springs police and previously reported on by The Gazette that Jon Hallford was engaged in sexual misconduct with a minor. Neff presented text messages to the court allegedly between Jon Hallford and the minor, alleged to be his 17-year-old stepdaughter, in which he makes crude references to her body and asks to kiss and hold her. 

“I desire to be close to you and to get closer,” Hallford wrote in one text message to the alleged victim, according to Neff. 

“We already have a pretty inappropriate relationship, which I f—ing LOVE, so yea I’d say it’s probably safe to never show anything to anyone!” a text message from Jon Hallford to his stepdaughter reads. 

Jon Hallford’s attorney, Laura Suelau, objected to the court using the sexual misconduct allegations in the hearing due to the lack of criminal charges faced by her client on the allegations. 

Suelau also disagreed with Neff’s representation that Carie Hallford was less involved is misconduct than Jon Hallford, specifically as it relates to the federal case. Suelau claimed that Carie Hallford was in charge of much of the financial side of the Return to Nature business and created many of the fraudulent contracts referred to the indictment. 

Return to Nature Funeral Home owners now face federal charges; Jon Hallford sports fast food t-shirt in court

Ultimately, Magistrate Judge Scott Varholak disagreed with the claims by Suelau, and ordered Jon Hallford detained indefinitely pending the conclusion of his federal case and that Carie Hallford be released on a $10,000 conditional bond. 

Varholak stated that the aggravating factors for Jon Hallford were more significant than those of Carie Hallford, and that the differing situations warranted different treatment. 

Jon Hallford will remain in custody at the Englewood federal correctional institution just outside Denver while Carie Hallford will be released to a local halfway house, pending the outcome of an additional bond hearing next Tuesday. 

Only Carie Hallford will appear at Tuesday’s bond hearing, where she should be released from custody if there is space at any local halfway houses. 

Carie Hallford will remain out of custody on a $100,000 bond in her state-level case and will continue to be monitored by court-ordered GPS tracking.  

The Hallfords’ next court appearance on local charges is scheduled for July 6 with a a jury trial tentatively set for October.