Funeral Service & Cremation 
Alliance of Wisconsin

Receiver appointed to take over funeral directors association

14 Sep 2012 3:52 PM | Anonymous

A Dane County judge on Friday appointed a receiver to take over the operations of the Wisconsin Funeral Directors Association after questions were raised about the solvency of a fund for prepaid funerals that may be $21 million short.

The decision by Dane County Circuit Judge C. William Foust came after officials representing the state Department of Justice and the Department of Financial Institutions informed the court of problems with the fund financed by prepaid contracts of 10,500 people.

Justice officials said the customers had purchased prepaid funeral policy plans and that the trust fund has lost millions of dollars in high-risk investments.

At the same time, the Depart ment of Financial Institutions said it had ordered a securities enforcement action after it determined the funds, which had been held in a trust, had been invested in violation of state law.

The receiver, Milwaukee attorney John Wirth, said he had ordered that the sale of prepaid funeral plans cease until "a better understanding of the group's financial position can be determined."

In a court document, state officials said the trust had been presented "as an extremely safe, conservative means by which people could set aside funds to pay for future funeral expenses." Buyers of the prepaid plans were told the money would be invested in government bonds, CDs and other low-risk investments and that they would receive a modest, guaranteed rate of return, the document states.

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