There has been another Preneed Funeral Directors Scandal. This time it involves the California Funeral Directors Association.(CDFA) Again we have an instance of the theft(misuse, misappropriation of Preneed Funds.
It is not quite on the scale of the Illinois Funeral Directors Association(IFDA) Preneed Fraud. It does consist of theft and misuse of peoples funeral money. It does involve Preneed, or the money people have prepaid for funerals.
This is just another example of funeral preneed, contributing to additional funeral cost for the consumer.
Snippet from the SanFrncisco Chronicle
A state audit says one of California’s largest prepaid funeral trusts misspent millions of dollars set aside by consumers to pay for cemetery plots, caskets and services.
The Department of Consumer Affairs is ordering more than 300 funeral homes that participate in the California Master Trust to repay at least $6 million. The audit, released this week, says the money was spent improperly on administrative fees, political lobbying, conventions and other activities.
The trust holds about $70 million that has been paid in advance for funeral services by 27,000 consumers.”via www.sfgate.com
Funeral Industry|Funeral News|Funeral Blog by R.Brian Burkhardt-yourfuneralguy
The great Illinois Funeral Directors Association Preneed Scandal is an issue in the Race for governor of the State of Illinois. The Preneed Trust Scandal has forced Financial hardship on many Funeral Directors in the State. Many will have to work into retirement. Some funeral homes have closed. 100 million dollars is gone! Bankruptcy is being considered by some Funeral Directors.
THe Illinois Funeral directors Association Ponzi scheme my disqualify Comptroller Dan Hynes from becoming Governor.
The situation is still unresolved, tied up in the Courts. The Association is in need of a trustee because Merrill Lynch has pulled out. The political question is-Has the way Comptroller Dan Hynes handled the (IFDA)matter disqualified him to be Governor of the State of Illinois?
Summary:
In 1980, the Comptroller’s office licensed Illinois Funeral Directors Association to administer a “pre-need” funeral trust fund. Using these funds, consumers can plan and pay for funerals in advance. In this case, the funeral costs were paid to local funeral directors, who then invested the consumers’ deposits in the IFDA trust fund. Over time, about 50,000 consumers paid $300 million into the fund.
Normally, these pre-need funeral trust funds – which by law are supervised by the Comptroller’s office – are conservatively invested. That way, the funds generate a modest but reliable profit, so funeral home directors do not lose money when they provide a funeral in 2010 that was bought at 1995 prices.
100 million dollars is gone from the trust fund
However, in the mid-1980s, IFDA Services embarked on a risky investment scheme, using the bulk of consumers’ money to buy expensive “variable universal life” (VUL) insurance policies on funeral home directors.
VUL policies do not provide a specified death benefit; instead, the actual payout depends on the ups and downs of the stock market. They carry hefty management fees, and they can trigger huge tax penalties on payout. These policies also have low cash values, so fund managers can’t readily bail out and find better investments if the stock market tanks.
The entire scheme depended on receiving frequent cash injections from these insurance policies. That meant the insured funeral home directors had to die on schedule – which, not surprisingly, they failed to do.
These VUL insurance policies do have one huge advantage – for the agents who sell them. The premiums on these policies are very high. A lawsuit against the IFDA states that the fund paid $90 million in premiums on insurance policies with total death benefits estimated at $357 million. Since the scheme’s final collapse in 2009, the majority of those policies are being cashed in – for about $100 million.
The IFDA trust fund apparently used money from new investors to pay a modest but steady stream of “profits” to previous investors. That is the “Ponzi scheme” system made infamous, most recently, by Bernard Madoff.
The Illinois Funeral Directors Scheme was like that of Bernie Madoff
As a result, an estimated $100 million in consumer dollars vanished from the fund, and hundreds of family-owned funeral homes throughout Illinois are facing serious financial losses – even bankruptcy.
Dan Hynes the Comptroller Now candidate for Illinois Governor
“We all know that Dan Hynes waited far too long to act on disturbing reports about conditions at the Burr Oak Cemetery,” Austin said. “The IFDA scandal shows that Comptroller Hynes has a decade-long history of ignoring serious problems – with disastrous consequences for 50,000 Illinois consumers.”
Austin noted that Hynes has refused to provide documents requested by Bruce Rushton, a reporter for the Springfield State Journal-Register, that might shed light on the Comptroller’s delay in acting to end the fraud and protect consumers.
“When well-respected journalists file legitimate requests for information from his own office, Comptroller Hynes loses his enthusiasm for transparency, accountability, and the public’s right to know,” Austin said.-summaryvia davidormsby.wordpress.com
Funeral Industry|Funeral News | Funeral Blog by Your Funeral Guy
Illinois funeral leaders may be facing felony charges
Leaders of the Illinois Funeral directors Association may be facing felony charges. This according to recent statements made by the Illinois Comptrollers office to a Springfield, IL Newspaper.
A court deposition by the former Illinois funeral Directors Association’s Trust Administrator revealed the same thing.
Some specific people are involved.
The Former IFDA trust administrator, Karen Blankenship stated in a deposition in April That IFDA Leaders disobeyed the law.
“In response to questions during an April 1 deposition, Blankenship said she believes that if Hynes’ accusations are true, then association officials committed crimes.
“(Y)ou would agree with me this is a pretty simple statement?” asked Robert Foote, an attorney in a class-action lawsuit filed last year in Kane County on behalf of consumers who bought pre-need funeral contracts. “You can’t violate the act, it’s a felony if you do. Correct?”
“Yes,” Blankenship answered.
Hynes has said IFDA, which is not a licensed fiduciary, never should have had a license from the comptroller to administer the trust. That contention also was addressed in Blankenship’s deposition.
“And so if Hynes is right and the trust never — if IFDA Services Inc. never was a trust company, they violated the act,” Foote asked. “Correct?”
“If he’s right, yes,” Blankenship agreed.
“And they committed a felony,” Foote continued. “Correct?”
“I have to say yes,” Blankenship answered.
Dan Hynes is the Comptroller of the State of Illinois responsible for enforcing the applicable funeral law.
The integrity of the National Funeral Directors Association is being questioned over its executive secretary Randall L Earl.
The Funeral Industry is questioning the the National Funeral Directors Association on (NFDA) about whether they should keep there Executive Secretary Randall Earl. Earl is the subject of multiple lawsuits in the Illinois Funeral Directors association preneed ponzi Scheme. Last week it was revealed that there is a criminal investigation into IFDA leaders.
The premier Funeral Industry Website, ConnectingDirectors.com made a post questioning the NFDA and its retention of Randall L Earl.
“I was just wondering that if with the news that federal prosecutors have begun a CRIMINAL investigation into a preneed funeral trust fund formerly run by the Illinois Funeral Directors Association, if anyone is questioning whether or not NFDA should reconsider its decision to keep Randall Earle as a member of its executive leadership and in line to assume the NFDA presidency in 2011. It must be noted that potential targets are not clear from a subpoena issued to the state comptroller’s office demanding records.”
Earl is a former president of IFDA and also served of IFDA Services’ Board of Directors, the arm that managed the preneed trust. In early June, losses in the trust were believed to be approaching $100 million.
It does appear that the NFDA is closed to the idea of dumping Randall L Earl. This is contrary to the mission of NFDA The NFDA says it exists to preserve integrity in Funeral Service. Many of the problems with the IFDA Trust Fund began under Earl’s watch as IFDA Trust Fund. He also as executive director of the IFDA sponsored Museum of Funeral Customs. Funds for the Trust Fund were transfered out and directed to the Museum of Funeral Customs.
A Senator Roland Burris Investigator died in a car crash. Burris Pictured
A State of Illinois Investigator investigating the perjuries of Roland Burris has died in a car crash. There has been no comment from the Senator Roland Burris.. Burris is under state investigation in “pay for play” lying, perjury in his appointment by the now impeached Illinois Governor Rod Blagojevich.
Senator Roland Burris is also under investigation by the US Senate Ethics Commitee and others for lying, on Blago, and his lobbying for and licensing of the Illinois Funeral Directors Association.
It is clear by his own admission that he was hired as a lobbyist for the organization he licensed to manage the IFDA Preneed trust.
The State Funeral Directors Association lost, stole, misappropriated nearly 100 million dollars of the good folks funeral money in the State of Illinois.
When funeral preneed funds are misappropiated funeral costs are raised and consumers suffer.
“John Ruff, a key figure in the perjury investigation of U.S. Sen. Roland Burris was killed in an automobile accident Monday in Kendall County. He was 42-years-old”
A State of Illinois investigator of Roland Burris perjuries dead in an auto accident, no witnessed.
It is unclear how the Car crash death of the investigator will set the Burris investigations back.
Funeral Industry|Funeral Blog by Your Funeral Guy.
Burris Picture from Flickr under the Creative Commons licence from
It is not quite on the scale of the Illinois Funeral Directors Association(IFDA) Preneed Fraud. It does consist of theft and misuse of peoples funeral money. It does involve Preneed, or the money people have prepaid for funerals.
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