ST. LOUIS (CN) – “The Cassity family of St. Louis preyed on consumers and funeral homes” in a multimillion-dollar prepaid funeral scheme, according to a 138-page RICO claim in Federal Court. The plaintiffs are nationwide life and health insurance guaranty associations who say they were left with a $600 million tab from the Cassitys’ scheme.
The receiver for Texas-based Lincoln Memorial Life Insurance Company says the Cassitys sold prearranged funerals through their St. Louis-based National Prearranged Services, backed their life insurance policies through Lincoln, and spent the money on themselves.
The long list of plaintiffs claim the Cassitys systematically looted accounts in a variety of way:
by listing National Prearranged Services improperly as the owner of the whole life insurance policies issued by Lincoln to take over $130 million of policy loans against the policies;
by replacing whole life policies with term policies;
by allowing National Prearranged Services to stop paying premiums on whole life and term policies that allowed the Cassitys to keep more money for themselves;
by taking tens of millions of dollars out of prearranged funeral funds and replacing them with promissory notes;
and by paying commissions to themselves through National Prearranged Services for insurance policies bought from their own affiliated companies.
National Prearranged Services, Lincoln and Memorial Service Life Insurance ran out of money last year. An estimated 150,000 prepaid funeral contracts throughout the country were left in limbo.
Forty-four defendants are accused of RICO conspiracy. Defendants include Bremen Bank, National City Bank, Marshall & Ilsley, Southwest Bank, U.S. Bank, Bank of America, American Stock Transfer and Comerica Bank and Trust, who served as trustees of National Prearranged trusts and allegedly failed to supervise the trusts’ assets.
The law firm of Wittner, Spewak & Maylack is also a defendant, accused of legal malpractice for allegedly providing legal advice helping the Cassitys find ways to siphon money in the scheme.
Plaintiffs are represented by Wendy Fisher with Reilly Pozner of Denver, Colo.