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
Funeral Industry| Funeral News | Funeral Blog By Your Funeral Guy
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.
$2,280 USD is far too much to pay for a cremation.
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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.
Just a few more reasons to avoid funeral preneed contracts or Prepaying for a Funeral.
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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.
Funeral Industry|Funeral News|Funeral Funeral Blog by Your Funeral Guy
At http://www.southcoasttoday.com an article makes two leaps that often happens in the media and at funeral blogs.
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.
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.
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 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
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.
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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.
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.
“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