Former CFO, lawyer plead in St. Louis pre-arranged funeral fraud case
ST. LOUIS • Two more defendants accused of a role in what prosecutors have called a “Ponzi-like” pre-arranged funeral scam that could cost as much as $600 million pleaded guilty Tuesday to federal charges.
National Prearranged Services' former CFO, Randall K. Sutton, 67, of Chesterfield, pleaded guilty of bank fraud, mail fraud, money laundering and insurance fraud charges. The company's former lawyer, Howard A. Wittner, 76, of Chesterfield, pleaded guilty a few hours later to two counts of making false statements intended to deceive insurance regulators and willfully permitting a felon to engage in the business of insurance.
Under a plea deal with prosecutors, Sutton faces up to seven years in prison and Wittner faces up to five years in prison. Both men are scheduled to be sentenced Nov. 7.
The pleas leave only one remaining defendant, former investment adviser David R. Wulf, 60, of St. Louis County, who has pleaded not guilty and is said to be committed to a trial.
Prosecutors offered six defendants plea deals that carried potential maximum prison sentences that ranged from three years in prison to more than nine. Going to trial and losing, prosecutors said, could have meant 30 years to life.
Last week, the defunct company's former owner, James “Doug” Cassity, 67, of Clayton, and his son, Brent Cassity, 46, of Clayton, pleaded guilty pleaded guilty in U.S. District Court here to mail fraud, wire fraud, money laundering and other charges.
Doug Cassity’s deal means he risks no more than 115 months in federal prison and his son faces no more than five years. Both are scheduled to be sentenced Nov. 7.
Former company official Sharon Nekol Province, 69, of Ballwin, pleaded guilty last month to six counts of mail fraud, wire fraud and misappropriation of insurance premiums in a deal that should net her three years or less in prison.
National Prearranged Services sold pre-arranged funeral policies which promised customers that they could prepay for their funerals and prevent their heirs from being burdened by high funeral costs. The money was supposed to be held in trust or in an insurance policy.
In court, Assistant U.S. Attorney Charles Birmingham has called National Prearranged Services a “Ponzi-like scheme.” He said the company and its affiliated insurance companies looted trust accounts and took unauthorized loans on customers' insurance policies, contrary to their promises to those customers and state law. They lied to regulators and employees were told to alter documents. The company used those customer funds to enrich company officers and others and pay business expenses.
Sutton had been with the company since 1981, and also held a variety of titles with the affiliated insurance companies, including director, president and CEO. Prosecutors say his duties operations and finances.
Prosecutors have said that the scam affected up to 150,000 customers in Missouri, Illinois and at least eight other states who paid up to $10,000. The scheme could eventually cost $450 million to $600 million as customers die and the costs for funerals pile up.
The company stopped selling funeral policies in 2008 after Missouri and other states began scrutinizing its business practices, and Texas forced the company’s liquidation later that year.
The plea agreements have been sealed.
