Man Pleads Guilty to Fraud, Money Laundering in Funeral Contracts Scheme
James Douglas Cassity has pleaded guilty before United States District Judge Jean C. Hamilton for his decades-long participation in a fraudulent scheme  involving the sale of prearranged funeral contracts and misappropriation of insurance premiums.
Specifically, Cassity, 67, pleaded guilty to two counts of wire fraud (counts 17 and 21), one count of bank fraud (count seven), one count of mail fraud (count 24), one count of money laundering (count 26), and one count of misappropriation of an insurance premium (count 48).
National Prearranged Services Inc. (NPS) sold prearranged funeral contracts in several states. During that time, insurance companies affiliated with NPS issued life insurance policies related to those prearranged funeral contracts. The contracts laid out the total price for funeral services and merchandise; that price would remain constant regardless of when the funeral services and merchandise would be needed. Customers entering into prearranged funeral contracts would usually pay a single sum of money up-front to NPS either directly or through a funeral home that was also a party to the contract. NPS represented to individual customers, funeral homes, and state regulators that funds paid by customers under the prearranged funeral contracts would be kept in a secure trust or insurance policy as required under state law.
However Cassity admitted to the court that beginning as early as 1992 and continuing until 2008, NPS made use of funds paid by customers in ways that were inconsistent both with its prior and continuing representations and with the applicable state laws and regulations. Additionally, Cassity admitted that he benefited from the misuse of customer funds.
Cassity faces up to 115 months in prison for his role in the fraud. He will be sentenced on November 7, 2013. Two other co-defendants have also pleaded guilty to participating in this scheme. Three others are scheduled for trial starting on August 5 of this year.
Image source: mycreditunion.gov

Man Pleads Guilty to Fraud, Money Laundering in Funeral Contracts Scheme

James Douglas Cassity has pleaded guilty before United States District Judge Jean C. Hamilton for his decades-long participation in a fraudulent schemeĀ  involving the sale of prearranged funeral contracts and misappropriation of insurance premiums.

Specifically, Cassity, 67, pleaded guilty to two counts of wire fraud (counts 17 and 21), one count of bank fraud (count seven), one count of mail fraud (count 24), one count of money laundering (count 26), and one count of misappropriation of an insurance premium (count 48).

National Prearranged Services Inc. (NPS) sold prearranged funeral contracts in several states. During that time, insurance companies affiliated with NPS issued life insurance policies related to those prearranged funeral contracts. The contracts laid out the total price for funeral services and merchandise; that price would remain constant regardless of when the funeral services and merchandise would be needed. Customers entering into prearranged funeral contracts would usually pay a single sum of money up-front to NPS either directly or through a funeral home that was also a party to the contract. NPS represented to individual customers, funeral homes, and state regulators that funds paid by customers under the prearranged funeral contracts would be kept in a secure trust or insurance policy as required under state law.

However Cassity admitted to the court that beginning as early as 1992 and continuing until 2008, NPS made use of funds paid by customers in ways that were inconsistent both with its prior and continuing representations and with the applicable state laws and regulations. Additionally, Cassity admitted that he benefited from the misuse of customer funds.

Cassity faces up to 115 months in prison for his role in the fraud. He will be sentenced on November 7, 2013. Two other co-defendants have also pleaded guilty to participating in this scheme. Three others are scheduled for trial starting on August 5 of this year.

Image source: mycreditunion.gov