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.
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Funeral Fraud and Crime should go right to the criminal prosecutor. If there is to be justice and recompense in these matters felonies must be recognized and turned over to the authorities.
The crimes committee by the Illinois Funeral Directors Association should have gone straight to the prosecutor
When the Cook County Sheriff became involved with the Burr Oak Cemetery Scandal the States Attorney quickly became involved. Criminal Charges were filed and SOME of the Felons have been dealt with.
When Comptroller Dan Hynes became involved with the Illinois Funeral Directors Association Funeral Fraud and the IFDA Ponzi Scheme, he hesitated(may be for good reason) and things went to the Civil Courts.
From the State Journal Register.
In lawsuits aimed at recovering IFDA losses, funeral directors say the comptroller didn’t do enough. And state law also says any violation of laws related to pre-need funerals is a Class 4 felony.
Hynes, who hasn’t ruled out pressing for criminal charges, chose to pursue the matter civilly, even though he said the IFDA broke the law by taking the excessive fees.
Comptroller Dan Hynes did not have to place resolution of Funeral and cemetery misdeeds in the civil courts. He could have taken it to the criminal courts right away. It may be just as slow of a solution but it is more dramatic and does more for public awareness. He could have enforced the law.The deeds committed by Burr Oak Cemetery and IFDA leaders were crimes in the State of Illinois.
Funeral Industry|Funeral blog by Your Funeral Guy
Arrest in Funeral Scam
The former President and Chief Financial Officer Of National Prearranged Services was indicted on mail fraud, wire fraud and money laundering. The National Prearranged Services multimillion dollar scheme used insurance to extract millions from the pre-need trust fund. Insurance policies combined with the tools found in every office, white out and cross outs.
Yes the man Randall Sutton directed his staff to white out and cross out to change preneed documents and insurance terms. This was quite effective in exracting millions from people’s funeral funds.
An insurance scheme was also a part pf the Illinois Funeral Directors Pre need Ponzi scheme but the tools were different, key man insurance policies.
From www.stltoday.com on 8/7/2009
The president and CFO of a now-defunct prearranged funeral services company was arrested this morning….Customers who signed applications for life insurance policies and made full payment had their applications altered by NPS employees so that it appeared that they had only partially paid the expenses, prosecutors said. NPS pocketed the difference.
NPS also altered documents to remove the customer or their funeral home as beneficiary of the policies, instead inserting the NPS name.
Then NPS used those policies either to get $65 million in loans without the customers’ knowledge or converted those policies from whole life policies to renewable policies to extract more than $40 million in cash, the indictment claims.
NPS also took money from accounts that was supposed to be invested and backed by insurance policies, and sent fake account statements to funeral homes to cover it up.
Sutton and others at NPS also siphoned off over $50 million through promissory notes, the indictment says.
Sutton did not even keep his state insurance license current. He had his secretary take a test every 2 years to renew his insurance license. The indictment came on Thursday and the arrest came on Friday. This is different from the civil suit filed in Federal Court.
There is more here.
Funeral industry|Funeral Blog by Your Funeral Guy
Indiana and Funeral home and cemetery scam yielded 24 million Dollars.
An Indiana Cemetery owner is to plead guilty to Fraud on Monday. His Cemetery and funeral scam covered six states: Hawaii, Michigan, New Jersey, New York, Iowa and Tennessee. Only Indiana and Tennessee have prosecuted Mr.Nelms in his preneed trust fund schemes.
In the Indiana Scheme Nelms and his wife siphoned away 24 million. His wife agreed to testify against him in return for immunity from prosecution.
From the Indianapolis Business Journal:
“The couple bought the Indianapolis-based cemetery and funeral home business for $27 million in December 2004.
Within days, the couple allegedly drained all $24 million from their newly acquired company’s trust fund, which was supposed to be used to maintain grave sites in numerous cemeteries.”
One property involved is Forest Lawns Memory Gardens, cemetery and funeral home in Greenwood, Indiana. The company involved Memory Gardens Management Corp.
Funeral Industry | Funeral Blog by Your Funeral Guy.
Indiana map Pic from Wikipedia
AS A CONSUMER AT A FUNERAL HOME OR CEMETERY YOU SHOULD ALWAYS BE SURE WHO YOU ARE DEALING WITH.
Perpetua Inc has two property crime scenes, Burr Oak Cemetery, Illinois and Wade Funeral Home in Missouri
The owners of the Burr Oak Cemetery have another scandal on their hands. This one occurred in Missouri at the Wade Funeral home near St. Louis Missouri. Perpetua, Inc owns that property. They also own Burr Oak Cemetery.
Ironically while Burr Oak Cemetery is closed as a crime scene. The lady responsible for the theft of $200,000 in preneed funds at Wade FH, Deborah Kellom, will be sentenced on July 24th 2009. The Burr oak cemetery a Perpetua property will still be a crime scene during her sentencing.
St.Louis From KMOV
“St. Louis, MO: Debora Kellom pleaded guilty to mail fraud involving her embezzlement of more than $200,000 from Wade Funeral Home, Acting United States Attorney Michael W. Reap announced today…..Kellom knew that the Pulaski account was a local account, and not routinely scrutinized by Perpetua management in Arizona.
It is more than obvious that Perpetua is more than negligent in managing it’s personel and it’s properties. How many times will this Arizona Company be allowed to repeat it’s attrocities?
Funeral Industry|Funeral blog by Your Funeral Guy.