On Your Side Investigators: Thieves steal funeral money - WECT TV6-WECT.com:News, weather & sports Wilmington, NC

On Your Side Investigators: Thieves steal funeral money


Millions do it without a problem; pre-arrange their own funerals and pay for it in advance. But, in this instance thousands fell victim to an elaborate ponzi scheme.

It's tragic what happened to these people but it's another reason why you should do your due diligence and check out the company's background with the Better Business Bureau before you sign a contract. Thousands of people paid hundreds of millions of dollars for pre-paid funerals and thieves stole their money.

"Our suspect took the money that was supposedly for the pre-arranged funeral services and used it for his own personal gain," said U.S. Postal Inspector Donald Washington.

Doug Cassity and his partners were charged with defrauding people out of millions of dollars while running a prepaid funeral services company called NPS. 

Investigators say nationwide losses were almost $500-million. While the financial toll is extensive, the emotional toll was heartbreaking.

"When our victims came in to claim the pre-arranged services that they paid for to bury their loved one, there was no money available. This was very difficult for them to deal with," Washington said.

Inspectors say the long-term scam was run like a ponzi scheme - new clients were paying off old claims.

"For a long time the payments were made by people and you heard funeral homes saying 'they are paying me right on time' and again, that is not unusual in a scheme as proven by the U.S. Prosecutors Office," said Donald Otto Jr. with the Funeral Directors Association.

Until the money began running out and NPS starting making desperate offers.

"Then just before things began to collapse the NPS announced a new program. Instead of giving you the growth on your money you were supposed to get, instead you get a new casket," Donald Otto Jr. explained.

By then, NPS was under federal investigation. Total number of victims: four thousand.

"They misappropriated those funds by using those funds to buy expensive gifts for their own personal gain such as cars, homes, and trips. When the victims needed that money during a time when their loved ones need to be buried, those funds were no longer available," said Washington.

Doug Cassity received a nine year prison sentence, his son got five years. The two men along with other partners were also ordered to pay more than $400-million in restitution.

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