by Sam Levin
One former officer with a now defunct Clayton funeral service company has pleaded guilty to her role in a massive fraudulent scheme involving the sale of prearranged funeral contracts and the misappropriation of the related insurance premiums. Authorities believe that the company -- National Prearranged Services, Inc. -- may have siphoned off as much as $600 million from customers.
Sharon Nekol Province, a 69-year-old Ballwin woman who admitted to her role in the Ponzi-like scheme yesterday in court, could face up to three years in prison and fines.
Authorities believe this is one of the largest frauds ever prosecuted in the Eastern District of Missouri.
Province was not a leader in this scheme, but still supported it indirectly by turning a blind eye, authorities say.
In the announcement of her plea, the U.S. Attorney's Office of the Eastern District of Missouri says that she is guilty of six counts of mail fraud, wire fraud and misappropriation of insurance premiums:
Province admitted that she was aware that there was a high probability that she was participating in a fraudulent scheme, but she deliberately shut her eyes to the falsity of the representations that NPS made to customers, funeral homes, and state regulators. Province admitted to taking deliberate actions to avoid learning of the fraudulent nature of the scheme, while at the same time acting in furtherance of it.
Province will be sentenced in November and her co-defendants -- James Douglas Cassity, Brent Douglas Cassity, Randall Sutton, Howard Wittner and David R. Wulf -- are scheduled to go to trial in August. They are from Chesterfield, Clayton and St. Louis counties.
How'd the scheme work?
Authorities say that between 1992 and 2008, NPS sold these prearranged funeral contracts in several states, including Missouri, Illinois and Ohio. During this time, the companies affiliated with NPS issued life insurance policies intended for those contracts.
Customers entering into these contracts would usually pay a single sum of money up-front and NPS told their clients that the funds would be kept secure in a trust or insurance policy -- as is required by law.
Instead, court documents say, NPS operated a fraudulent scheme "where customer funds were neither kept safe in bank trusts or insurance policies but instead were utilized for unauthorized purposes and the personal enrichment of NPS's officers and others."
And new business for NPS then became the source of funding for funerals that prior customers had previously paid for in advance.
With the loss to purchasers, funeral homes and state insurance guarantee associations ranging from $450,000,000 to $600,000,000, it's safe to say that this scheme spiraled out of control.
Province started out as an administrative secretary and rose to various corporate offices, including president, vice-president and secretary, officials say. She was also a vice-president of an affiliate business called Lincoln Memorial Life Insurance Company. She had a wide range of responsibilities during her time, including notary work, signing authorizations, hiring and firing, reconciling bank accounts, making wire transfers and more.
"Although Province held these titles during the course of her employment with these companies, she did not hold primary decision-making authority over the operations of those businesses," the announcement notes.
Province faces up to a $1 million fine for her role.