Cemetery Fraud: Uncovering Schemes and Scams Against Consumers and the Cemetery Paul G. German, Jr., CPA. Introduction. Consumer fraud committed in the death care industry – infrequent but each instance is troublesome
Cemetery Fraud: Uncovering Schemes and Scams Against Consumers and the Cemetery
Paul G. German, Jr., CPA
1-2 Consumers and the CemeteryFraud Triangle
(Weak Internal Controls)
(justification or “owed”)
“The vital few and the trivial many”
1. Consumer funds are stolen or diverted.
2. Deposits not made to trust as required – in the proper amount and/or proper time.
3. Improper withdrawals from trusts are made.
4. Annual reports filed with state agencies are proper and timely.
5. Misrepresentations or pressure is applied to consumers in order to obtain a sale.
7-5 Consumers and the CemeteryCommon Control Failures
No business is foolproof to a thief who is determined.
The goal is to prevent this from harming consumers.
Lack of pre-numbered sales contracts to prevent them
Lack of accountability over those pre-numbered sales contracts.
Lack of follow up program after cooling off period
Strong chance that they would not turn in the contract in this situation.
They can print their own contracts that would fool a customer
IMPACT – cemetery would not be collecting the funds and would not be able to set aside the appropriate amounts into trust.Consumer funds (actual dollars) are stolen or diverted – how might this happen?