ST. LOUIS (AP) -- The owner of a now-defunct prearranged funerals company in suburban St. Louis has admitted his role in what prosecutors called a giant Ponzi scheme.
Sixty-seven-year-old James Douglas Cassity, of Clayton, pleaded guilty Wednesday in U.S. District Court to fraud, money laundering and misappropriation of funds. His 46-year-old son, Brent Cassity, pleaded guilty earlier Wednesday.
Prosecutors said their company, National Prearranged Services Inc., sold prearranged funeral contracts from 1992 until 2008 for up to $10,000 each. But the company used the money instead for its own benefit and to pay for previous customers’ funerals.
Investigators say the scheme bilked customers of as much as $600 million.
Another employee pleaded guilty in June. Three others await trial.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
A son of the owner of a prearranged funerals company that prosecutors say was actually a giant Ponzi scheme pleaded guilty to federal fraud and other charges Wednesday.
Brent Douglas Cassity, 46, could face up to five years in prison when he’s sentenced Nov. 7 for mail fraud, wire fraud and money laundering. He’s the second former employee of now-defunct National Prearranged Services Inc. to plead guilty in the case, joining 69-year-old Sharon Nekol Province, of Ballwin, who admitted her role last month and is due to be sentenced the same day as Cassity.
Cassity’s plea agreement is sealed, so it wasn’t clear if he had agreed to testify against others implicated in the case. His father, James Douglas Cassity, and three other defendants have pleaded not guilty and are scheduled to stand trial starting Aug. 5.
According to prosecutors, the company sold policies in several states from 1992 until 2008 under which customers typically paid a single sum of up to $10,000 to cover the cost of future funeral services and related expenses.
The law required the company to keep the customers’ money in a secure trust or insurance policy. Federal prosecutors say money from as many as 150,000 customers was used to enrich the company’s officers and others, and that new business provided the money needed to pay for funerals that previous customers had paid for in advance.
The St. Louis Post-Dispatch reported last month that defendants in the case had been offered plea deals requiring 5-10 years in prison in exchange for guilty pleas. Without the deals, they risk life sentences if convicted.
In explaining the plea deal effort, U.S. Attorney Richard Callahan cited the high cost of trials that could last three months.