Federal jury awards $491M in trial over prepaid funeral scheme
A federal jury in St. Louis on Monday awarded $491 million in damages concerning a failed prepaid funeral operation that has been described by prosecutors as a Ponzi-like scheme.
During the more than 15 years that National Prearranged Services Inc. was in operation, the money paid in for funerals was supposed to be held in trust. But those in charge, including trustee Allegiant Bank, allowed officers of NPS to siphon money out for their own benefit, a civil suit alleged. It was brought by insurance guaranty associations and a receiver, reports the St. Louis Post-Dispatch. The 97,000 victims included not only customers but funeral homes, financial institutions and insurers.
Left holding the bag was PNC Bank, which was not involved with NPS but is a successor to Allegiant. It intends to appeal the jury verdict, which awarded the plaintiffs $355.5 million in compensatory damages and $35.5 million in punitive damages against PNC. Another $100 million was awarded against Forever Enterprises, a defunct company that did not defend itself at trial.
Those who earlier pleaded guilty to related federal criminal charges include the former legal counsel and former chief financial officer for National Prearranged Services, as the St. Louis Post-Dispatch reported at the time.
Another St. Louis Post-Dispatch story provides additional details about the civil case.
