Here’s a follow-up to a Watchdog report several years ago about two Texas insurance companies shut down by state regulators. They worked with a Missouri company that sold pre-need funeral contracts.
In late November, 2010, six top officials of National Prearranged Services were indicted in St. Louis by the U.S. attorney’s office. The 50-count indictment charges wire, bank, mail and insurance fraud, as well as money laundering and multiple conspiracy charges.
The government estimates that the losses could be as high as $600 million for individuals, funeral homes and state insurance guaranty associations.
Tens of thousands of people bought funeral contracts from the Missouri company, whose contracts were backed by insurance policies written by its two subsidiary Texas insurance companies.
In 2008, Texas insurance regulators realized that the company was about to fail and placed the insurance companies into receivership. The FBI launched a criminal investigation.
The government charges that company owner Doug Cassity used some of the money taken from prearranged funeral trusts to buy residential real estate, finance business projects for affiliated companies and pay for his family’s personal expenses.
Cassity, a felon, was not allowed to sell insurance, but the government charges that he did anyway.
Read a previous Watchdog Nation report on this:
ANOTHER PONZI SCHEME: Death is bad enough, but here’s how to steal from the corpse.
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Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. The new 2010 edition of his book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, is out. Revised and expanded, the book won two national book awards in 2009 for social change. Twitter @DaveLieber
