Former officer of national prearranged services, inc. and lincoln memorial life insurance company sharon nekol province pleads guilty to fraud charges
St. Louis, MO - SHARON NEKOL PROVINCE pled guilty today before United States District Judge Jean C. Hamilton to participating in a fraudulent scheme involving the sale of prearranged funeral contracts and the misappropriation of insurance premiums that were intended to fund those contracts. Province faces up to three years in prison for her role in one of the largest frauds ever prosecuted in the Eastern District of Missouri.
According to court documents, beginning as early as 1992 and continuing until 2008, National Prearranged Services, Inc. (“NPS”) sold prearranged funeral contracts in several states, including Missouri, Illinois and Ohio. During that time, insurance companies affiliated with NPS issued life insurance policies related to those prearranged funeral contacts. As part of the contracts, the total price for funeral services and merchandise for an individual was agreed upon, and that price would remain constant regardless of when the funeral services and merchandise would be needed. Customers entering into prearranged funeral contracts would usually pay a single sum of money up-front to NPS either directly or through a funeral home that was also a party to the contract. NPS represented to individual customers, funeral homes and state regulators that funds paid by customers under the prearranged funeral contracts would be kept in a secure trust or insurance policy as required under state law.
Court documents disclose, however, that NPS made use of funds paid by customers in ways that were inconsistent both with its prior and continuing representations and with the applicable state laws and regulations. Instead, NPS operated as a fraudulent Ponzi-like 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’ officers and others. In turn, new business became the source of funding for funerals that prior customers had previously paid for in advance.
Province, who started out as an administrative secretary, rose to hold at various times the corporate offices of President, Vice-President and Secretary of NPS and Vice-President of its affiliate Lincoln Memorial Life Insurance Company. 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. At different times Province’s duties included: notary work; signing authorizations; hiring and firing personnel; reconciling bank accounts; writing checks; making wire transfers and conveying procedures and operations from corporate officers or legal counsel to employees and contractors of the various companies.
Province pled guilty to 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 November 7, 2013. Province’s co-defendants, James Douglas Cassity, Brent Douglas Cassity, Randall K. Sutton, Howard A. Wittner and David R. Wulf, are scheduled for trial starting on August 5, 2013.Province’s case was investigated by the Federal Bureau of Investigation, Internal Revenue Service Criminal Investigation and the Postal Inspection Service. Assistant United States Attorneys Steven Muchnick, Charles Birmingham and Richard Finneran are handling the case for the U.S. Attorney’s Office.