50-Count Indictment Alleges Massive Preneed Funeral Fraud

November 23, 2010
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imageST. LOUIS — Officers at a prearranged funeral business defrauded customers, funeral homes and states out of as much as $600 million, according to a 50-count federal indictment announced Monday.

The U.S. Attorney’s office in St. Louis announced indictment on fraud, money laundering, conspiracy and other charges against Randall Sutton, 65; Sharon Nekol Province, 66; Doug Cassity, 64; his son, Brent Douglas Cassity, 43; Howard Wittner, 73; and David Wulf, 58.

All six defendants are from St. Louis County, and all were controlling officers for National Prearranged Services Inc., based in Clayton, Mo.

National Prearranged Services was affiliated with Mount Hope Cemetery in Belleville and Valley View Cemetery in Edwardsville.

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The indictment alleges a complicated scheme that caused financial losses for individuals, funeral homes and state insurance guarantee associations.

Among other things, the indictment alleges that National Prearranged Services illegally removed large amounts of money from prearranged funeral trusts. Money taken from those trusts was allegedly used by Doug Cassity to buy residential real estate, finance business projects for affiliated companies, and to pay his personal expenses.

“IRS Criminal Investigation is committed to investigating individuals who allegedly use their businesses as personal piggy banks,” said Toni Weirauch of the Internal Revenue Service criminal investigation office in St. Louis.

An attorney for Doug Cassity was in court and unavailable for comment.

Sutton, the president and chief financial officer, and Province were initially indicted last year. Sutton’s attorney, Burt Shostak, said the new indictment supersedes the 2009 indictment.

“Needless to say, Mr. Sutton will be vigorously defended,” Shostak said. “We don’t believe he did anything wrong.”

Richard Sindel, an attorney for Brent Cassity, said, “Obviously we intend to enter a plea of not guilty. There appears to be a strong and very valid defense.”

The pre-purchase of caskets, burial vaults and funerals has become a regular and important part of business for many funeral homes. Customers who buy a funeral package valued at $5,000, for example, are guaranteed to receive the same services, even if the price has increased to $8,500 by the time of death.

Under such arrangements, money for a prepaid funeral generally is placed in a trust account that bears interest.

The indictments follow a lawsuit brought by Donna Garrett, the deputy receiver appointed to administer the companies after their failure, and by groups representing the insurance guarantee funds of about three dozen states.

The failure of National Prearranged Services led Missouri lawmakers to tighten oversight of the prepaid funeral industry.

Source: BND.com

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