Funeral Divas Muneerah Warner arrested and the Conference fails! Monica Vernette Gray shares insight! Questions remain!!!

November 13, 2012

Always on the forefront of the funeral industry – Connecting Directors – a leading provider of funeral news was on top of this breaking story that may, as the facts come out, turn into a fraud inquiry…?  Ryan, with Connecting Directors, interviewed via email former Funeral Divas, Inc board member – Monica Vernette Gray about the fiasco regarding the Chicago Conference.  The conversation is reproduced with permission from Connecting Directors.

Hello Ryan. Thanks for reaching out to me. I had a feeling you would.  : )

Man I don’t know where to start.  OK … Tuesday (11/6/2012) the evening before the conference, Muneerah Warner called me from the hotel and stated there was a problem with her credit card…she had no idea what was wrong with her credit card…the hotel needed another credit card…made some remark about needing shelter…

The New York Chapter president of Funeral Divas paid for Ms. Warner’s hotel room for that evening (even though Ms. Warner told her that everything would be paid for) and my credit card was supposed to be used to HOLD (not charge or pay) until Ms. Warner straightened out the issue with her credit card. Without me being present, or my credit card being present, the hotel charged my credit card $1,750.00 for the conference rooms.

STORY #1:  When I arrived at the hotel the following morning (Wednesday, 11/7/2012), Ms. Warner told me that while she was on the airplane en route to the conference, someone went to her bank in Alexandria, VA and withdrew $7,000.00 out of her account. She said the investigation into this was going to take 6 to 8 weeks … and the funds would not be available to her before then. I asked her to call someone to cover the cost of the hotel conference rooms and she said she had nobody to call. She said she only had $71 in her account.

In the meantime, I observed one of the presenters at the computer looking up addresses for local currency exchanges. She wanted to cash the $985.00 check that was presented to her by Ms. Warner. She also contacted the bank that the check was written on…and was told that the account the check was written on was no good. She told Ms. Warner she wanted cash, and Ms. Warner said she would ask ME for half of the money. !!!!!  I drove this presenter to a local currency exchange and after approximately 20 minutes of phone time, the

currency exchange refused to cash the check.

STORY #2:  As I remember this version of events relayed to me by the presenter, Ms. Warner told this presenter that a check had been deposited but had not cleared … and would not clear until Monday (11/12/2012).

Another presenter was also presented with a check by Ms. Warner…and Ms. Warner let her know that funds were not available to cover it.

The first presenter I mentioned above was livid, outraged … the whole gamut.  I told Ms. Warner my displeasure at the ways she handled things. I told her that she took advantage of me and, after the out-of=town folks returned to their respective states, I would have to deal with the embarrassment and fallout of what she came to my hometown to do.  I did not get the impression that Ms. Warner understood the magnitude and seriously of what was going on.  The first presenter and I had yet another discussion about the incredible events, and she called the Rosemont Police Department in Rosemont, IL. The officers instructed the presenters on the proper handling of this situation, and told them they would have to seek relief in civil court.

After I expressed my dilemma to the police officers, they took the matter to the hotel management. I was about to call my bank, but one of the managers demanded that I not call the bank …and they reversed the charges immediately.  They stated that Ms. Warner did not tell them to use my credit card to HOLD the conference rooms, but instructed them to go ahead and charge my credit card. There were no signed contracts with my signature on them with the hotel, and I never agreed to pay the hotel for the conference rooms. (In fact, I had ZERO contact with the hotel during the arrangement of this conference.) This left the $1,750 unpaid and since Ms. Warner did not have the means to pay it, she was arrested.  I believe the charge was “theft of services,” with the hotel being the injured party.

One of the police officers told me that I was too nice to people, too nice to Ms. Warner, and to never do that again.  Lesson learned.

The conference was disrupted and ended. The hotel provided a shuttle bus for the attendees to go to the Rosemont Police Department so they could copy driver’s licenses and collect telephone numbers of the attendees.  The detective told us that they called the bank in question, and there were NO identity theft issues associated with Ms. Warner’s account. Yeah … she lied to me about being the victim of identity theft.

Problems Problems Problems!!!!!

  1. The New York Chapter President was stranded in Chicago and not prepared to pay for any hotel rooms (as Ms. Warner told her this expense would be taken care). She spent the night with one of the presenters. GRACIOUSLY, ASD (one of the corporate sponsors for this conference) paid for a few nights at the hotel for this chapter present.
  2. I believe 17 people registered for the conference. There were national and local corporate sponsors for the conference. WHERE IS THIS MONEY???????????????????????????????????
  3. Why wasn’t the hotel paid in advance for this conference?
  4. Some of the conference registrants were able to contact their credit card companies and get the charges temporarily reversed while investigation takes place.

I do not know the specifics of Ms. Warner’s release or who paid what to get her out of jail.

I do not know what will become of Funeral Divas. I wish Funeral Divas well in future endeavors. As an organization, the premise is sound.  Intentions at one time were honorable.  I do not know what happened or went wrong. I NEVER thought I would witness and experience the events of last week.

I do not know what happened to the monies collected from conference registrations and corporate sponsorships. I believe a complete financial forensic audit of Funeral Divas is appropriate and in order.

Thank you for allowing me an opportunity to share my horrific and humiliating experience.

Monica Vernette Gray

YOUR COMMENTS ARE WELCOME!

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National Prearranged Services Officials bring Black Eye to Funeral Industry – Looks like Sutton, Cassity and others have dug themselves a Grave!

November 24, 2010

Looks like Randall K. Sutton, Sharon Nekol Province, Doug Cassity, Brent Douglas Cassity, Howard A. Wittner, and David R. Wulf, may have two graves in this lifetime – one that will naturally occur at the end of life and the other that they dug for themselves now.  Facing up to 30 years in prison – it’s likely that many named above (if convicted) will spend their last days in federal prison just like Bernie Madoff.

Not that this is any great surprise if you work in the Funeral Profession, but this week the United States Attorney’s Office announced the indictments of six controlling officials of National Prearranged Services, Inc., in a 50-count indictment charging wire, bank, mail, and insurance fraud; money laundering; and multiple conspiracy charges involving the sale of pre-paid funeral services.

Sadly, this brings a “black eye” and causes serious distrust in an industry that provides services to individuals and their families at times when trust is needed the most.  Having worked in this profession for the greater part of my adult life, I know the value that prearranging brings – not only emotionally, but financially as well…and for folks to abuse that trust is – well in a word – criminal.

So how big is this disaster?  According to the indictment, after taking into account insurance and trust assets expected to be available to pay for future funeral services, and merchandise under prearranged funeral contracts sold by National Prearranged Services, Inc., (NPS), the loss to purchasers, funeral homes, and state insurance guarantee associations will range from $450,000,000 to $600,000,000.

As a business ethics speaker and industry professional, I have interviewed several of the firms affected.  This financial fraud and scam will have significant, if not devastating consequences related to the ability of many smaller firms to survive or continue to provide the type of service that they wish to provide.

In an FBI news release the following is stated:  According to the indictment, individuals who purchased a prearranged funeral contract from NPS, signed contracts which set forth the terms of that contract. The total price for the funeral services and merchandise was agreed upon, and would remain constant regardless of when the funeral services and merchandise would be needed. The purchaser could pay the agreed upon price either in full, or by periodic installments. NPS agreed to arrange for the funeral with the funeral home designated in the agreement upon the death of the person for whom the contract was purchased. In order to secure the performance of the prearranged funeral contract, a third party received the deposited funds. In Missouri, the purchaser and NPS agreed that the payments made under the contract after the initial 20 percent were to be deposited into a trust with a financial institution, such as a bank, as trustee. The seller of a contract was permitted to retain for its own use, the initial 20 percent deposited by the purchaser. In other states, such as Ohio, Illinois, and Tennessee, the purchaser and NPS agreed that the purchaser would apply for a life insurance policy which would fund the prearranged funeral contract when the funeral services were needed. Beginning in 1983, NPS entered into agreements with several financial institution to act as trustees of the various trusts which were established to hold the funds paid by the purchasers located in Missouri.

The indictment alleges that instead of making the required deposits into trust or forwarding the insurance premiums as paid, NPS obtained insurance in a manner that allowed it to retain money received from purchasers that should have been deposited into trust or paid as a premium to an insurance company. Since NPS and the insurance companies from whom policies were obtained were controlled by the defendants, NPS was able to pay substantially less than the amounts which should have either been deposited into the trusts or to the insurance companies.

The NPS fraud may have started with good intentions, but quickly became nothing more than an intentional fraud according to a former NPS representative whose identity will remain confidential.

According the indictment, NPS borrowed large amounts of the cash surrender values of the insurance policies. NPS had no right to borrow the cash surrender values of these policies. These loans reduced the death benefits which would be available to pay for funeral services after the deaths of the purchasers. Additionally, the indictment alleges that the defendants concealed this practice from insurance regulators. In some instances, the defendants used money obtained from new purchasers to pay premiums of insurance policies on the lives of previous purchasers and also to reimburse funeral homes for the cost of funeral services for the earlier purchasers.

While the indictment states that the defendant removed large amounts of money from prearranged funeral trusts established by NPS, my source tells me that Brent Cassity along with his father Doug Cassity enjoyed the benefits of ill gotten money from NPS.  I was told that NPS maintained several limos with a driver available 24/7.  The limo was used (according to my source) to transport NPS officials (insiders) to pick up clients and/or provide transportation for personal vacation type trips, etc.  This money was allegedly used to enable Doug Cassity to purchase residential real estate, to finance business projects for affiliated companies, to purchase a New York insurance company, Professional Liability Insurance Company of America (PLICA), and to pay personal expenses of Doug Cassity and his family.

Finally, count 49 charges Doug Cassity with insurance fraud for his participation in the insurance business, after being previously convicted of a felony, which prohibits him from engaging in the insurance business. Count 50 charges Randall Sutton, Brent Cassity, and Howard Wittner with permitting Doug Cassity to engage in the insurance business.

Sources say that NPS used very aggressive tactics to sell their services and fund their need for cash.  By hiring attractive young women, (insiders called them “Barbies”), NPS would play on funeral directors emotions and financial needs by promising aggressive growth rates, generous trips and other incentives.

The quickest way to spot a fraud is to recognize that if it falls outside of industry norm and sounds too good to be true – it likely is – an many times is a clear indication that a scam or fraud is in play.

Examples of how the fraud took place are featured in an article in the “White Collar Crime News Blog” shown in full here with excerpts to follow:

For example, at the time they purchased prearranged funeral services, many customers completed applications for life insurance policies indicating they were making payment in full for insurance policies that would fund their funerals. Employees at National Prearranged Services, with the knowledge and under the direction of Sutton, simply whited-out the indications that payments had been made in full and altered the documents to make it appear as though the customers had made partial payments. The altered documents were forwarded to life insurance companies such as Lincoln Memorial Life, who adopted the policies and assumed the obligation to pay a lump sum at the time of the customer’s death. National Prearranged Services, meanwhile, diverted the difference between the true full payments and the falsified partial payments from the customer’s insurance policy, thus retaining the vast majority of the customer’s lump-sum payment while transferring the obligation of future pay.

As another example, National Prearranged Services’ employees used white-out or cross-outs to change the names of beneficiaries on insurance applications in order to extract money. Customers completed applications for life insurance policies naming themselves or their funeral homes as a beneficiary. With Sutton’s knowledge, employees at National Prearranged Services simply whited-out or crossed-out other beneficiaries named in the applications and made National Prearranged Services the sole beneficiary. Once National Prearranged Services was listed as the sole beneficiary on policies, it was able to extract money from customers’ policies in at least two separate ways:

First, customers’ insurance policies were pledged as collateral for loans to National Prearranged Services without the customers’ knowledge. Typically, the loans were made by insurance companies within the same family of corporate entities, such as Lincoln Memorial Life, allowing Sutton and others to extract funds from these insurance entities under false premises. In total, as alleged in the indictment, National Prearranged Services received in excess of $65 million from such policy loans. Often, the proceeds of these policy loans were immediately turned around and used to pay outstanding premiums due from other customers.

Second, once it had altered applications to name itself as sole beneficiary, National Prearranged Services then converted customers’ whole life insurance policies to monthly renewable term polices, extracting from the insurance company the difference between the cash surrender value of the whole life policy and the first monthly premium of the renewable term policy. By doing so, National Prearranged Services extracted more than $40 million from the customers’ policies at Lincoln Memorial Life without their knowledge.

In addition to the fraud charges, upon a finding of guilt, the defendants will be subject to a forfeiture allegation, which will require them to forfeit to the government all money derived from their illegal activity.

Indicted:

Randall K. Sutton, 65, Chesterfield, MO;
Sharon Nekol Province, 66, Ballwin, MO;
Doug Cassity, 64, Clayton, MO;
Brent Douglas Cassity, 43, Clayton, MO;
Howard A. Wittner, 73, Chesterfield, MO; and
David R. Wulf, 58, St. Louis County.

If convicted, the maximum penalty ranges for each of these charges range from five to 30 years in prison and/or from $250,000 to $1,000,000.

As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.

Today NPS policies are in the hands of a Receiver and subject to limited payout of the face amount of the policy.

IF YOU HAVE DIRECT KNOWLEDGE OF THE NPS SCAM – YOUR COMMENTS ARE WELCOME.