AUSA VICKIE E. LEDUC or MARCIA MURPHY at 410-209-4885

OCTOBER 9, 2007

BALTIMORE FUNERAL HOME OWNER PLEADS GUILTY TO DEFRAUDING CUSTOMERS AND BANK OF OVER $900,000 IN PREPAID FUNERAL EXPENSES

Defendant Paul Stella Stole Prepaid Funeral Funds of More than 175 Customers

Baltimore, Maryland - Paul Stella, age 43, of Forest Hill, Maryland, pleaded guilty today to bank fraud arising from two fraudulent schemes to obtain over $900,000 in prepaid funeral expenses for his gambling and other personal and business expenses, announced United States Attorney for the District of Maryland Rod J. Rosenstein.

U.S. Attorney Rod J. Rosenstein stated, “More than 175 victims were defrauded when Paul Stella stole over $900,000 in prepaid funeral funds. In an outrageous abuse of trust, he stole from people who took steps to plan and pay for their own funerals.”

William D. Chase, Special Agent in Charge of the Baltimore Division of the Federal Bureau of Investigation said, “The actions of Mr. Stella in stealing monies designated for funerals was an egregious breach of trust.” Mr. Chase also thanked the FBI’s Bel Air Office for their hard work on this case.

According to the plea agreement, Stella owned and operated Paul Stella Funeral Home PA (SFH) located at 7527 Harford Road, Baltimore. Customers who wanted to pay in advance for the cost of their funeral entered into contracts with Stella and SFH. Stella then executed two schemes to defraud customers.

In the first scheme, Stella and SFH agreed with some of the customers to deposit the prepaid funeral expenses in accounts at a bank and act as a trustee to preserve the money for the customers’ funerals. After receiving money from some customers, SFH employees opened prepaid funeral expense accounts at Madison & Bradford Savings and Loan and its successor, Madison Bohemiam Savings Bank (collectively, MBSB).

Thereafter, from June 2004 to January 2005, Stella improperly closed 111 MBSB accounts that were in the name of SFH customers. Stella forged and caused to be forged customers’ signatures on letters to MBSB purporting to authorize the closing of the prepaid funeral expense accounts. As a result, MBSB closed the accounts and issued checks payable to SFH customers. Stella then fraudulently endorsed the MBSB bank checks, which totaled approximately $530,000, and deposited the proceeds in bank accounts he controlled. He then withdrew the monies to gamble in Atlantic City, New Jersey and Las Vegas, Nevada, and for personal expenses.

In the second fraud scheme, which took place from July 2003 to December 2006, Stella made false representations to approximately 75 additional customers that he would safeguard their money and hold it in trust so the money would be available to pay for the customers’ funerals when they died. Stella cashed and/or deposited over $370,000 of the customers’ monies into his personal and business bank accounts, using the money in part to gamble and pay for his personal expenses.

Eventually, SFH customers started to ask questions about their money and complained to the State Board of Morticians (Board). When the Board initiated an investigation, Stella asked one of his employees to take SFH files home, and falsely claimed that all prepaid funeral expense account monies in the MBSB accounts had been reinvested in life insurance products. The Board suspended his license on November 30, 2006.

Stella faces a maximum sentence of 30 years in prison followed by five years of supervised release and a $1 million fine. Stella agrees to the entry of a restitution order for the full amount of the victims’ losses. U.S. District Chief Judge Benson E. Legg has scheduled sentencing for January 10, 2008 at 10:00 a.m.

United States Attorney Rod J. Rosenstein praised the Federal Bureau of Investigation and U.S. Postal Inspection Service for their investigative work. Mr. Rosenstein thanked Assistant U.S. Attorney Harry Gruber, who is prosecuting the case.