The State is stepping in to help funeral chapels sort out financial dilema of missing funds.
Officials at area funeral chapels are crying foul about a complex financial scheme that is leaving them paying out-of-pocket for pre-paid funeral plans.
Marty Meyers, of Meyers Funeral Chapel in Blue Springs, said he and other funeral directors are fearing the worst as state regulators attempt to unravel the complicated financial twists and turns of missing funds in National Prearranged Services.
Regulators are investigating about $167 million in Missouri pre-need burial plan money that was used to purchase life insurance policies, which then were allowed to lapse and were canceled. Nationally, the estimate is about $300 million.
Meyers said he feels an obligation to the public.
“I just want people to know they were let down by the law,” he said of a state law requiring that pre-paid plans be held in a third-party trust. “If it takes everything I have, I’ll make it right.”
Brad Speaks, president of Speaks Family Legacy Chapels, said he’s also concerned.
“I think every funeral home in the state will be affected by it one way or another,” he said. “Even if they don’t have a contract, they’ll end up honoring one.”
National officials have sold contracts through hundreds of funeral homes throughout the country, including to about 55,000 Missourians. State law requires that at least 80 percent of such money be placed in a third-party trust, which is safe-guarded by insurance, and regulated by the state. Although National Prearranged Services was touted as such a trust, a wealthy St. Louis family may have switched money from one company to another and one bank to another to avoid attracting the attention of regulators. Officials have learned that there’s no money in the trust fund to back the pre-paid funeral plans, leaving funeral homes on the hook.
Connie James, whose husband owns funeral homes in south Missouri, said 365 of Missouri’s 525 funeral homes are affected by the scam. Some are reluctant to talk.
“They don’t want to get their people (clients) upset,” she said.
Meyers, however, said the public deserves to know.
“I’m not going to hide this,” he said. “It’s not my money until they die.”
Funeral directors claim that pre-paid funerals are attractive to seniors, especially those of little means, for the peace of mind they allow instead of worrying about their families paying later. Those people might pay as little as $10 per month on a pre-paid plan, James said.
Meyers said most of the contracts in question at his funeral home were purchased by Webb-Freer Funeral Home, which he recently purchased, to form Meyers Funeral Chapel, with offices on Main Street in Blue Springs and in the Northland.
“We have several million dollars worth of contracts that we’ll be lucky if we get paid for,” Meyers said.
However, he added that his funeral home will honor the contracts, even if they have to pay for it themselves.
“Everybody let these people down by allowing them to operate,” Meyers said of state regulatory agencies, including the Attorney General’s office and the Department of Insurance, Financial Institutions & Professional Registration.
“I’m going to weather this storm,” he said. “We’ll make it. But some of these other small funeral homes may not.”
State officials had little to say about the matter.
“As state regulators are carrying out their duties, law enforcement is continuing its investigation,” said John Fougere, press secretary for Missouri Attorney General Jay Nixon.
Doug Cassity is at the head of the dispute, along with his sons, Brent and Tyler, who operate several companies. During the 1980s, Cassity, an attorney, plead guilty to conspiracy and tax-fraud violations in intertwined corporations and missing funds.
Meyers said he wants to prevent this scheme from occurring again, and has been lobbying Missouri lawmakers by changing the state law to rid it of the requirement that pre-plan burial money be held by a third-party trust. Since the Missouri legislature has adjourned for the session, any action before fall would need to be taken during a special session, Meyers said.
Despite the hurdles, Meyers said he remains positive.
He said, “We’re optimistic we’re going to be able to get something done.”
Missouri consumers can call a free state hot line to learn more at 1-866-296-8801.