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Your Funeral Guy in Dow Jones Newswires

22 Dec
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Your Funeral Guy has been Featured in the Dow Jones NEWSWIRE  Prepaid Funerals Like Digging Your Own Grave 

December 2, 2010 9:16 a.m. EST

By AL LEWIS
A DOW JONES NEWSWIRES COLUMN

R. Brian Burkhardt is a funeral director in Illinois and Virginia who writes a blog called “Your Funeral Guy.”

It’s filled with handy consumer tips, as is his book, “Rest in Peace, Insider’s Look at the Low Cost Less Stress Funeral.”

Burkhardt also covers the funeral news:

“Mom fakes daughter’s funeral.”

“Father sues after son’s body falls out of casket.”

“Corpses to appear on cigarette packages.”

And, “Unclaimed cremated remains: A growing problem.”

One of the biggest stories on the funeral beat these days involves a St. Louis, Mo., company called National Prearranged Services Inc. and its related businesses operating in several states from Illinois and Ohio to Tennessee and Texas.

Federal prosecutors last week unveiled a 50-count indictment burying six controlling officials in assorted criminal charges: money laundering, conspiracy and wire, bank, mail and insurance fraud.

Defendants are Doug Cassity, 64; his son, Brent Douglas Cassity, 43; Howard Wittner, 73; Randall Sutton, 65; Sharon Nekol Province, 66; and David Wulf, 58.

The indictment alleges they took as much as $600 million that should have gone into trusts and life-insurance policies to cover as many as 150,000 funerals.

“White-out was the main tool,” Burkhardt said. “It’s sounds blastedly simple, but that’s what they did.”

Indeed, one of the many tricks alleged in the federal indictment is altering documents with correction fluid.

Money that should have gone into trusts or to pay life-insurance premiums for the funeral plans were diverted to pay for business investments, luxury homes and jewelry, the Feds allege. A Ponzi scheme for the dead?

Toni Weirauch, special agent in charge of IRS-criminal investigations in St. Louis, said his office “is committed to investigating individuals who allegedly use their businesses as personal piggy banks.”

The losses will go to state insurance guarantee associations, plan purchasers and funeral homes.

Connie James of James and Gahr Mortuaries in St. James, Mo., said her family-owned funeral business put all of its prepaid funeral funds with the company.

A state fund likely will get stuck with most of the tab for the prepaid services her company has contracted to provide, but not all of it. Some of the losses will be hers.

“You just pray every day that you’re going to be here tomorrow,” James said.

She has a name for defendant Doug Cassity, who went to federal prison in the early 1980s for charges stemming from his investment club.

“He is the Bernie Madoff of Missouri,” she said.

She wonders how so blatant an alleged fraud could have gone on for so long in an industry that is supposed to be regulated. Cassity’s criminal past, and issues with underfunded trusts dating back to the 1990s, didn’t set off the alarms until the shortfall was enormous.

“$600 million. That’s a lot of damn funerals,” James said.

National Prearranged Services sold folks on the idea that they could pay today’s prices for tomorrow’s funeral services. Say you put $5,000 down now, and if the funeral you want costs $15,000 due to future inflation, no problem.

“Any product that says, ‘We will cover you no matter how much your prices increase’ is too good to be true,” said Scott Gilligan, general counsel of the National Funeral Directors Association in Brookfield, Wisc.

“That should have been everybody’s first clue,” he said, “because nobody can do that.”

Burkhardt said he’s been warning consumers not to buy prepaid funeral plans for years. “It’s better to a get term life insurance policy and apply that money to the funeral,” he said.

He also says the scale of the National Prearranged Services case shows how easily prepaid funeral funds are diverted, and how long it can take regulators to do something about it.

“Every week, somebody misappropriates pre-need funds, and every two to three weeks somebody gets caught,” Burkhardt said.

“I have had a funeral director tell me, “When I can’t meet my payroll, I just borrow from the pre-need fund.” That’s fraud. But in their minds, it’s kind of their money.”

Burkhardt said he suspects business will go on as usual, despite the news he covers on his blog. Reading up on prearranged funeral plans isn’t something folks always do before they buy.

“People don’t want to talk about death,” he said. “You almost have to trick your mind to think about it. That’s why people buy these plans.”

–(Al’s Emporium, written by Dow Jones Newswires columnist Al Lewis, offers commentary and analysis on a wide range of business subjects through an unconventional perspective. The column is published each Tuesday and Thursday at 9 a.m. ET. He can be reached at 212-416-2617 or by email at al.lewis@dowjones.com, or on his blog at tellittoal.com.)

(We invite readers to send us comments on this or other financial news topics. Please comment on Al Lewis’ blog at http://tellittoal.newswires-americas.com/. We reserve the right to edit and publish your comments along with your name; we reserve the right not to publish reader comments.)

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Funeral Industry| Funeral News| Funeral blog by Your Funeral Guy

Due to my stint in ICU and hospitalization it took some time to get this article up.

YOUR FUNERAL GUY HAS BEEN Featured in the Dow Jones News Wires. Your Funeral Guy is quoted but other opinions are mentioned.

ARTICLE FROM  AL’S EMPORIUM
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Preneed Irresponsibly sold to Disabled Person-YourFuneral

4 Oct
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The Chicago Tribune has done an article on preneed aggressively sold to  a person on disability. This is truly another example about why  one  should not pre-purchase, prepay a funeral. This  type of aggressive salesmanship is not needed or good for the Funeral Business.

The flier that arrived in Carol Rognstad’s mailbox sounded like a great deal. For only $38 a month, she could prepay for her future cremation.

The 48-year-old, who is mentally disabled, prides herself on doing things on her own. So she called the number listed and set up an appointment.

In mid-July, a representative from Warren Funeral Home visited her low-income apartment in Round Lake Beach. Rognstad signed a 60-month contract, in which she agreed to pay a total of $2,280.

But a few months later, Rognstad began having second thoughts. Because she relies solely on her monthly disability check, the $38 payment had a significant impact. Concerned she had done something wrong, Rognstad called her mother, Holly Anderle, and asked for help.

via articles.chicagotribune.com

$2,280 USD is far too much to pay for a cremation.

Funeral industry| Funeral News| Funeral Blog by Your Funeral Guy

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More Preneed Fraud in Illinois-YourFuneralGuy

16 Sep
Map of USA with Illinois highlighted
Illinois Image via Wikipedia

There has been another case of Funeral Preneed Fraud, another case of the Funeral Director takes your money in a prepaid funeral contract(Scam).

The most famous case of this in Illinois recently, was a scam hatched by the Illinois Funeral Directors Association in their IFDA Preneed Trust Scam where 100 million + dollars of the of the folks prepaid  funeral money in Illinois disappeared. Incredibly at the center of the IFDA scam is the current National Funeral Directors Association(NFDA) Executive Treasurer, Randal L Earl.

Snippet from the current Preneed scam Story:

A former Southern Illinois funeral director has been charged with mishandling funds from multiple pre-need funeral service contracts.

John B. Jones, a former partner with Gaskins-Jones Funeral Home in Harrisburg, faces 11 felony counts of theft and failure to deposit funds into a trust account — all dealing with pre-need funeral arrangements.

A warrant has been issued for Jones’ arrest, but as of Tuesday afternoon, he was still being sought by police, according to Special Prosecutor Charles Zalar with the Illinois Appellate Prosecutor’s Office in Springfield. Bond in the case has been set at $100,000.

The charges were filed last week by Zalar.

He alleges that Jones, 50, of Equality, Ill., accepted payment from various pre-need funeral service clients and failed to purchase life insurance policies or annuities. Jones is accused of putting the money into the funeral home’s checking account to pay for business expenses instead.

via www.courierpress.com

The lesson from the Scandal state of Illinois is to avoid funeral preneed or prepaid funerals.

Funeral industry|Funeral News|Funeral blog by Your Funeral Guy

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Your Funeral Guy Exclusive|California Funeral Directors Association Scandal

9 Jul Watercolor Map of California

Your Funeral Guy First reported on the California Funeral Directors Association(CFDA) on January 7th, 2010. Click Here for the report.

Now that the scandal has received local coverage in California we can report on this matter more fully because my research has been verified by a State Audit. The scandal is quite similar to the Illinois Funeral Directors Association Scandal. Right now the dollar amount is less than The IFDA Preneed Trust Scandal. That could change.

Early audits in the IFDA Preneed trust scandal did not reveal the extent of the problem. Later on Gross Misappropriation of the Folks Money was discovered. The current situation involves the California Master Trust.

Now that there is  a second maor Funeral directors association scandal the national media may take note.

Do Not Hold your Breath.

The audit was the first to find systematic problems with a funeral trust fund(California), Wallinder said. Typically, auditors find problems involving individual funeral homes or trusts set up for individual consumers, he said.

In this case, the department ordered the trust’s governing board to return more than $2 million that was spent on lobbying and conventions for the California Funeral Directors Association. Some of the money already has been paid back, auditors said.

The audit also found the trust failed to pay at least $1.6 million it owed to consumers, their estates or the state treasury in cases where funeral homes went out of business or families paid for funeral services because they didn’t know their loved one had a prepaid plan.

via www.mercurynews.com

Funeral industry|Funeral News|Funeral Blog by Your Funeral Guy

Still Room for Preneed,Prepaid Funeral Fraud-YourFuneralGuy

23 Mar

There is still room for preneed, prepaid, funeral and cemetery fraud around the country. In spite of the Illinois Funeral Directors Association Scandal ($100 million) and National Prearranged Services Scandal(approximately $1 billion) the practice continues on a small scale and a larger scale as well.

The current example comes from Mississippi, were it appears there is a large problem with preneed cemetery fraud.

JACKSON, Miss. — Since Secretary of State Delbert Hosemann took office, his agency has seized five Mississippi cemeteries for mismanaging funds, a scenario that’s playing itself out across the country.

Critics of the pre-paid industry contend that’s because oversight has been poor, and despite states’ efforts to beef up laws, there is still plenty of room for fraud.

Mississippi Secretary of State Delbert Hosemann:

Misapplying trust funds from someone’s funeral arrangements is literally grave robbing,” Hosemann said. “It is unfortunate that we have to go after these companies in court to recoup the money that is missing.”

Anyone taking from folks preened funeral funds including the IFDA and NPS is guilty of Grave Robbing.

Funeral Industry| Funeral News|

Once Again Funeral Spin in the Media-YourFuneralGuy

4 Jan

At http://www.southcoasttoday.com an article makes two leaps that often happens in the media and at  funeral blogs.

Connecting Directors has been Funeral Spining with an In lieu of flowers article an another saying prepaid funerals are popular

Prepaying  funerals are on the rise and is a good thing. Prepaid funerals are on the rise? This not the case according  to funeral industry stats and  is only  funeral  director hype. The South Coast today article quotes no statistical studies  on the matter- only an informal survey of the newspaper’s funeral homes. Now Preplaning is a must but prepaying is not.

The article implies that the AARP supports prepaying. Officially the organization does not support prepaid funerals  and  definitely not Joshua Slocum.

The big lie comes next with Funeral Packages Save you money. Even Casual industry observers can quickly see this is not the case.

Snippet:

Although buying a whole funeral package through the funeral home is far more convenient and often less expensive, the Federal Trade Commission has ruled that no one is obliged to buy caskets, burial containers or any other products in-house.

via www.southcoasttoday.com

This article is pure funeral spin. It is being promoted at the funeral spin site- Connecting Directors.com Info on the other  Funeral Spin article is here.

Funeral Industry | Funeral news | Funeral blog by Your Funeral Guy.

Funeral packages an prepaying will not help you come in under the average cost of a funeral.

Websites like connecting directors have an interest in Funeral Spin because they receive funds from funeral corporations, Newspapers receive funds from funeral homes through the paid obituary.

Illinois Small Funeral homes lose authority over Preneed Funds-Your Funeral Guy

2 Nov
iStock_000000918121Small

Small Illinois Funeral Homes lost fiduciary Control over their preneed funds

Last week Small funeral homes in Illinois have lost fiduciary authority over their. preneed funds. Funeral Directors are looking for new ways to bring in income and they are considering knowledge basis of services, end of life services, estate planing, grief counseling etc as a new income source.

The small funeral home owners can thank the Illinois Funeral Directors Association through the IFDA Preneed Trust Ponzi scheme for this.

Last week 10/28/2009 the Governor of the State of Illinois amendatory veto applied to Senate Bill SB1692 was passed by the Illinois Legislature. It can be viewed here.

The funeral homes will have to find a trustee for their  preneed funds in 2010.

Who own’s Preneed Trust Funds|no clear answer-YourFuneralGuy

1 Nov

Preneed is insurance, different from life insirance

National Prearranged Services pulled off their frauds with Life Insurance policies.

Who own’s funeral preneed? Is it the bank that own’s the trust fund? The insurance company?  The Funeral corporation?The funeral director? The policy holder?The answer is not in plain sight. This makes repaying a funeral not a good idea.

Because the laws are different in each State, each may have a different answer. Because each contract is different clearly the Managers of the IFDA Trust(through IFDA services)thought the money was theirs when they robbed it. The funeral corporations list the money as theirs on the balance sheet(this is true for SCI, Big Death, Service Corporation International and other funeral corporations).

Funeral Directors count on the preneed money being there, for themselves and their funeral home.

NPS, National Prearranged Services saw the preneed  insurance money in their contracts and they took it.(preneed insurance is different from life insurance)The consumer who purchases the preneed contract often walks away thinking the money  is their own. Sadly that is never the case.

Funeral industry| Funeral Blog by Your Funeral Guy

 

Scandal Ridden Illinois Funeral Directors (IFDA) Seeking trustee again-YourFuneralGuy

2 Sep
The Lesson of the IFDA (Illinois Funeral Directors)scandal is not to let the  Funeral Director take your money through preneed.

The Lesson of the IFDA (Illinois Funeral Directors)scandal is not to let the Funeral Director take your money through preneed.

The scandal ridden Illinois Funeral Directors Association is seeking another trustee for it’s IFDA Preneed Trust Fund. This is what the brought the Ponzi Scheme in to the light in the first place.

The Comptroller of the State of Illinois took away the license of  the State of the Illinois Funeral Directors Association to Manage the trust fund because the leaders of the IFDA were raiding the Fund for there own purposes. In the Fall of 2007 there losses 40 million, in fall 2008 59 million and now nearly 100 million.

At there Convention in June this summer there was talk(VENDORS) that the Illinois Funeral Directors Association will not be around next year. There is also rumors circulating about Illinois  that The Six Funeral homes Suing(lawsuits) the state IFDA are starting there own funeral directors association called The IFSA. I have not confirmed the rumor bit. That said going with the New Association maybe just just a jump from the frying pan into the fire. Some say the Funeral Home leading the charge against the IFDA  is deficient in Ethics.

This much is true The  IFDA is Seeking a new Trustee, a bad sign for their survival. From an E-Mail From the IFDA:

IFDA E-News Bulletin
Aug 26, 2009

IFDA Seeking New Trustee

“Merrill Lynch Trust Company is working with IFDA to appoint a new Successor Trustee. Conversations have been established with four financial institutions to review the possibility of taking over as a new trustee. IFDA Executive Director, Duane Marsh, cautions, “This is a very complex undertaking but a necessary one if we are to provide the fund with long-term stability.”

The IFDA is not saying why they are seeking a new trustee, and why Merrill Lynch is not continuing as trustee.

This has been the  way the IFDA has operated throughout the Scandal.

Sadly the press has not reported on these events. It is past the time that someone should speak up.

Funeral Industry|Funeral blog by Your Funeral Guy

Largest Funeral Corp Partners w/another Insurance -YourfuneralGuy

18 Aug

3017751065_3596eafc03The worlds largest funeral corporation Service Corporation International(SCI) has partnered with yet another insurance company.

SCI’s numbers have been in almost a free fall for Fiscal 2009 and they have joined another Insurance Company at the hip to stop the decline. Insurance Companies have been hurting dramatically due to the recession and so have the Funeral Corporations. The latest Company SCI has partnered with is United Home Life Insurance. Previously the have partnered with SLAICO and MATRIX DIRECT.

From PR Newswire:

United Home Life Insurance Company and Service Corporation International (NYSE: SCI) announce the creation of a partnership to enhance the products currently offered by United Home Life for agents. Through the partnership, independent agents can utilize the Dignity Planning(TM) tool to increase their profitability by offering clients the ability to turn their policy into a complete end-of-life plan. Dignity Planning is unlike any other end-of-life planning tool in that it was designed for financial service professionals and provides agents with real-time needs analysis and pricing, as well as inflation and aged-based life expectancy costs of specific elements rather than generic national averages.

Be sure to keep control of your own life insurance policy and do not turn it over to Dignity Planning

Funeral Industry|Funeral Blog by Your Funeral Guy

Dignity Logo Pic on flickr under the creative commons license  at

Jeremy Brooks’ photostream

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