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
Counting Down to Number 1 of the Top 100 Funeral News stories of 2009, the last count is 25-1. Several Last minute stories probably should be in the top 100.Some of those posts maybe, Batesville enters the cemetery (vault) business,the almost funerals of Flight 253, returning Iraq Veterans and the Funeral Business ,The Batesville Demise of 09, funerals from the Flight of AF 447, National memorial Services in 2009 , as well as SCI and their special Deals with the FTC.
The most important stories of 2009 are Walmart Selling caskets and the Facebook Memorial. The handling of Digital Assets in a funeral arrangement will be an Important Funeral News Story in the years ahead. I have received threats, threats of lawsuits, website hacks, and been booted out of forums because of my Funeral News stories written from the Consumers perspective.
Here ae the Top 25 Funeral Stories of 2009:2(5.25)
24 . Service Corporation International, mishandled the Kennedy Funeral From a funeral directors perspective Service corporation International totally mishandled the Kennedy Funeral in Front of 4 Living Presidents! They Nation watched and waited in wasted air time because Teddy did not get to the cemetery on time.
13. SCI Denies wrong doing in Veterans Corpse Abuse ScandalService Corporation International seems never to admit wrong doing and finds a way to pay themselves out of any scandal- EvenVeterans Corpse Abuse for those headed to Arlington National Cemetery from National Funeral Home.
11.Brittany Murphy Death and Funeral|has celebrity death gone too far n 2009?The death of this young star near the end of 2009 is the focus many, as the world focused on Celebrities and their funerals in 2009.
10.Service Corporation International’s Burr Oak Cem. ScandalThe Scandal at Service Corporation International outside Los Angeles at Eden Memorial Park. was worse than Burr Oak cemetery Scandal outside Chicago. This Scandal received little National Press.
4.Michael Jackson MemorialThe Michael Jackson Memorial Service may be the most viewed Funeral Of All Time.
3.Sadly|Pics,Places,Logo Virginia SCI Body Desecrations This World’s Largest Funeral Corporation, Service Corporation International is given the Nickname Big Death in 2009 by the company employees. In Houston SCI is known the Enron evil. The Funeral company’s reputation for scandal is known to most Americans.
2. When someone dies setup a Facebook MemorialThe Facebook memorial has awakened the Funeral Industry to the importance of the online obituary, Facebook participation and digital assets.
1 .Walmart Selling caskets online Walmart selling caskets has frightened the Funeral Industry. Industry leadership says no big deal but the fact that caskets are being sold at Walmart has opened the mind of consumers to funeral purchase options beyond the Funeral Director.
Did I miss your funeral story? Please let me know with a comment.
Disagree? Leave a comment.
Funeral Industry|Funeral Blog by Your Funeral Guy.
Roland Burris and Illinois Funeral Directors Association need to give Answers Now in Ponzi Scheme.
The President of the Illinois Funeral Directors Association has resigned. Chris Woodridge resigned the Illinois Funeral Directors Association for Personal Reasons. Merrill Lynch a while back bowed out as trustee. So Now What? The IFDA Preneed trust lost 40 million of the folks preneed money in Illinois before The Market crashed in September 2008. Today the amount has grown to over 100 million.
This has impacted the funeral industry-and Funerals in Illinois and raised the average cost of the Funeral in Illinois.
The Illinois Funeral Directors Association has been hit by key defections in its leadership and administration. First, Merrill Lynch Bank & Trust Co. sent a letter informing the association of its intention to step aside as interim trustee for the association’s beleaguered preneed trust fund. Then, Chris Wooldridge resigned as association president.
Despite the timing between the two resignations, Duane Marsh, Illinois IFDA executive director, said there is no connection between the trust situation and Wooldridge’s resignation. “Chris made a personal decision and it is our job to go on and that is what we will do. We’re going to honor it,” Marsh said.
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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