In St. Louis a federal jury awarded $491 million in damages for a failed prepaid funeral scheme that is not unlike a Ponzi scheme. The company, National Prearranged Services Inc. (NPS) was siphoning money that was supposed to be held in a trust. Those individuals in charge, including trustee Allegiant Bank, allowed officers of NPS to siphon money for their own benefit.
The 97,000 victims including not only customers, but funeral houses, financial institutions, and insurers will receive a significant settlement. The jury awarded plaintiffs $355 million in compensatory damages, $35.5 million in punitive damages against PNC. Another $100 million was awarded against Forever Enterprises, a defunct company that did not appear in trial. Many of the company’s top executives, including CFO and CLO pleaded guilty to federal criminal charges. Six NPC officials were sentenced to prison terms, spanning from 18 months to ten years.
NPS was in business from 1992 to 2008. The company sold funeral plans that promised to keep the buyers money safe, and increase its value through investments until the time of the funeral. Typically, a deposit of $10,000 cash was given to NPS. This money was supposed to be held in a trust with the potential to increase threefold. Instead, it went into the pockets of company officers. Plaintiffs showed that liabilities had exceeded trust assets since 1990, and NPS was paying for funerals using cash from new customers.
The suit against NPS is a victory for justice. These customers trusted NPS to live up to their end of the bargain and they did not. Moreover, the fact that they took advantage of the dead is an absolute embarrassment and moral atrocity. NPS exploited the most vulnerable people possible. These grave robbers deserve to sit in jail.