by Gary Snyder
About a year and half ago, Nonprofit Imperative indicated that the pre-paid prearranged funeral business could be one of the largest frauds perpetrated in the nonprofit, as well as the for-profit sectors. Several states are investigating , but it seems to be generating a lot of news in which a funeral mogul, James Douglas Cassity, and other leaders of his funeral empire — National Prearranged Services Inc. —that apparently embezzled as much as $600 million that was supposed to be used to pay funeral expenses for about 150,000 consumers. National Prearranged Services, Inc., headquartered in Clayton, MO, is an entity that sold prearranged funeral services in 19 states. According to a FBI Press Release they, among other things, altered insurance applications bought at the time of signing and made himself and his company as sole beneficiary, while extracting $100 million from the customers’ policies.
A federal investigation of James Douglas Cassity uncovered a scheme full of intertwined corporations and missing funds. Cassity pleaded guilty of conspiracy and tax fraud violations in 1982, lost his law license and served six months in federal prison. Most consumers who paid for funeral plans are protected by state insurance-guarantee associations (see below the status of the associations). In some cases, however, the insurance pays only a small portion of the actual cost of the arrangements, and participating funeral homes must make up the difference, funeral directors said.
Here is some backdrop that appeared in Nonprofit Imperative in June 2009: A Merrill Lynch employee sold life insurance policies to finance a pre-need funeral trust. He received a commission and provided investment advice on the proceeds that went to the Illinois Funeral Directors Association. An IFDA subsidiary took a piece of the premium for overseeing the trust and its cut exceeded the legally allowed amount. The trust had deficits of $10.4 million in 2001, $39 million in 2006 and as much as $100 million at the present time. The state comptroller wants $10 million to pay for current funerals. Merrill Lynch has offered $18 million to release them from liability and that is not acceptable to many funeral directors. The funeral homes say they are losing an estimated $500,000 each. The undertakers are crying foul and pointing to the failure of the regulators to do their job. There is much at stake including dignified burials for the 40,000 Illinois residents that bought the plans. (The State Journal-Register)
It seems that at least two other states have similar problems and solvency is a risk there as well.
Monday, December 13, 2010
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1 comment:
The Cassity family including Tyler Cassity who owns Hollywood Forever Cemetery are complete criminals and crooks that should be put in jail. They basically stole money from customers to buy houses all over the country from St. Louis to Nantucket to Naples. It also helped fund Tylers lavish lifestyle with brand new cars and Hollywood Hills homes. It also helped him keep his severe drug habit going on for years. The Cassity's care nothing about the deceased,only about turning a profit on your dead family member. Tyler's dad Doug was put in jail back in the 80s for basically stealing money and Tyler is just like him. Tyler is trying to separate himself from his dad and brother but the fact is Hollywood Forever is part of Forever Enterprises and NPS. We can only hope that justice is served and Tyler Cassity, Doug Cassity and Brent Cassity are all sent to jail for a very long time.I believe Tyler Cassity is gay so he should enjoy jail.
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