Your Funeral Guy in Dow Jones Newswires

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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.) URL for this article: http://www.djnewsplus.com/article/0,,SB129129867914576950,00.html Related articles National Prearranged Services Executives Indicted-Your Funeral Guy (yourfuneralguy.wordpress.com) Recycled Pacemakers-To be done by USA Funeral Homes-Your Funeral Guy (yourfuneralguy.wordpress.com) 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

LA Funeral Director pleads guilty to Preneed Bank Fraud-Your Funeral Guy

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A Louisiana Funeral Director has pleaded Guilty to Preneed Bank Fraud. Prepaying can be dangerous. The danger is simply the Funeral Director Takes Your Money. This is more common than many would care to admit.

A Vivian man pleaded guilty on Friday to bank fraud and admitted to defrauding 65 victims of more than $400,000 in prepaid funeral and burial services.  William James McGuire, 63, owner and operator of McGuire Funeral Home in Vivian, La was entered in the plea in the U. S. District Court in Shreveport.

McGuire would place the customer’s funeral payment into a funeral trust account in the form of a certificate of deposit at a financial institution in which the certificate of deposit, including all earned interest, would be intended for the exclusive use and benefit of the funeral recipient. The certificate of deposit, which was payable upon the death of the funeral recipient, would bear the name of McGuire Funeral Home and the funeral recipient jointly

Beginning sometime in 2006 and continuing through 2007, McGuire began to fraudulently represent to AmSouth Bank and Regions Bank that a funeral recipient was deceased

via www.ksla.com

Funeral Industry| Funeral News | Funeral Blog By Your Funeral Guy

Preneed Irresponsibly sold to Disabled Person-YourFuneral

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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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California Funeral Homes Scandal-YourFuneralGuy

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It is not the exact same scandal as the Illinois Funeral Directors Association(IFDA) Preneed Trust Scandal. But just as  in Illinois, problems with the California Master Trust and the California Funeral Directors Association relate back to funeral homes and misuse of Preneed Funds.

SACRAMENTO, Calif.—A California agency plans to discipline about 300 funeral homes after finding the state’s second-largest funeral trust misused millions of dollars.Department of Consumer Affairs spokesman Russ Heimerich said Wednesday that funeral homes could be sent a warning letter or have their licenses revoked. The funeral homes all participate in the California Master Trust.

The trust holds money paid in advance by 27,000 individuals for funeral services, cemetery plots and other expenses.

Heimerich says the department will act against homes in coming weeks because the majority of them failed to say how they would correct problems found in a state audit released in July.

via www.mercurynews.com

Just a few more reasons to avoid funeral preneed contracts or Prepaying for a Funeral.

Funeral Industry| Funeral News| Funeral Blog by Your Funeral Guy

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Preneed Insurance could pay two funerals instead of one|YourFuneralGuy

A Preneed Funeral Arrangement is a contract, it is not wise to participate

Funerals .org has outlined a funeral complaint about preneed insurance. Incredibly insurance premiums total more than twice the cost of a funeral. The Funeral industry needs to stand up and take note of this complaint.

This presents us with a concrete example of the Dangers of funeral preneed. Your Funeral Guy has seen first hand the horrors of the preneed company mentioned below and has refused to work for this  funeral preneed firm  firm

Another example of the financial dangers of prepaid funerals. This Iowa couple was shocked to discover they’d have to pay almost $28,000 in insurance premiums for funerals that would cost only $14,000. Read their complaint-

After sending more than $11,000 to Homesteaders Insurance over the past four years, we recently decided to see what the exact balance due would be. The funeral home told us to call the insurance company. We were shocked to learn from Homesteaders that we hadbeen locked into a 10-year payment plan at the rate of $230.83 a month. At that rate, we would have to pay $27,699.60, about double of what the actual funerals would cost.

via www.funerals.org

Funeral Industry|Funeral News|Funeral  Funeral Blog by Your Funeral Guy

Once Again Funeral Spin in the Media-YourFuneralGuy

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.

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

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

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

National Prearranged Services 600 mil. Funeral lawsuit-Yourfuneralguy

The owners of National Prearranged Services (NPS) are facing  a Federal  Lawsuit for 600 million dollars.  The 150,000  funeral accounts are estimated to be worth over 1 billion dollars. The Cassity family based in Missouri were the owners of National Prearranged Services.

State Insurance Guarranty Programs have been paying for these funerals. The lawsuit wants recovery of  funds spent by seven states  paying for the funerals through insurance guaranty, including Illinois and Missouri.

The Missouri Scandal is perhaps the largest pre-need, prepaid, pre-arrangement  insurance scams in the United States.

More on this here:

Funeral Guy Used White Out in multimilion$$ Funeral Crime-YourFuneralGuy

It serves as a strong warning to the consumer: Do not pay for a funeral in advance. This scandal alone is reason not to have peace of mind about it.

This will help you come in under the average cost of a funeral.

From stltoday.com

“A federal lawsuit was filed alleging the Cassity family of St. Louis “preyed on consumers and funeral homes to perpetuate a multimillion-dollar, nationwide scheme from the sale of ‘pre-need’ funeral services and merchandise.”

The suit seeks to recover costs expended by the plaintiffs — seven state insurance guaranty companies, including in Missouri and Illinois, which have stepped into the void to honor most of the pre-need contracts.”

Funeral industry|Funeral Blog by Your Funeral Guy