by David Martin
Consumer advocates warn that prepaid funeral services are junk. Paying for a funeral in advance is an especially bad idea when the company taking the money operates as a Ponzi scheme.
The Missouri attorney general's office issued a belated warning on Monday to mortality-minded customers of National Prearranged Services, a St. Louis-area company that operated funeral homes and a cemetery in Independence. Hounded by regulators, the company was put in receivership by the Texas Department of Insurance in 2008. Last year, federal prosecutors in St. Louis charged company officials with running a $600 million fraud.
So where did the prepayments go? Yachting and a family vacation to St. Maartens.
Earlier this month, more than two dozen attorneys packed a courtroom in St. Louis. Lawyers working for guaranty companies say the Cassity family, who operated National Prearranged Services, used funeral prepayments to support a lavish lifestyle, citing a company-paid American Express bill for a $64,000 charter boat. A year ago, prosecutors accused chief financial officer Randall Sutton and others of siphoning off $50 million in promissory notes.
The Cassitys say they took nothing but their salaries. They blame regulators for their companies' plight, according to a report in the St. Louis Post-Dispatch.
In spite of its troubles, National Prearranged Services continued to operate in Missouri. The attorney general's office is warning that payments made on preneed contracts after 2008 may not be recovered.
A spokesman for the A.G. Chris Koster did not respond to an e-mailed question about why such a dubious enterprise continued to transact business.