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Internal Documents reveal what regulators knew about $450m scam

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(KTVI) - You may soon start paying for a half a billion dollar scam.  New evidence, obtained by Fox 2, shows top politicians could`ve prevented the losses.  It`s revealed in two documents - an FBI interview and a government memorandum.  The documents show a Missouri Insurance Auditor fighting to stop a pre-paid funeral scam, while trying everything he could to get then Attorney General Jay Nixon to listen.

The lavish lifestyles are documented after the warning.  The players spent hundreds of millions on the backs of the dead.  Brent Cassity and his father Doug are now serving prison time after pleading guilty in Federal Court.  They used credit cards to rent yachts ($64,000) and party overseas in fancy hotels ($20,000 at the Four Seasons in China).

The Cassitys and three others, admitted to stealing more than $450 million.

I asked U.S. Attorney Richard Callahan, "Is it possible to get all the money back in a case this massive?"

Callahan responded, "No, not when the fraud`s gone on as long as it did."

Callahan`s office is now working to get money back by seizing bank accounts, like $1.1 million documented in a forfeiture report as being in the bank account of Doug's wife Rhonda Cassity.  The report also shows a Nantucket waterside property that reportedly rents for up to $6,500 a week.

Callahan added, "We do expect the forfeiture proceedings to be completed by sometime this summer."

Nearly 100,000 victims invested in prepaid funerals through National Prearranged Services, or NPS.  Those consumers will get what they paid for because honest funeral homes are picking up some of the tab.  Emergency state insurance funds are picking up the rest.  That means you're paying for this, if you buy insurance.

A Missouri financial examiner predicted it.

The prediction is revealed in documents, obtained from the Federal investigation.  During an FBI interview, Rick Stamper said he "made at least a dozen attempts to meet with (the Attorney General's Office)."  Governor Jay Nixon was Attorney General at the time.  His office failed to respond to my interview request, so we caught up with him at the St. Louis Auto Show.

I asked, "I want your reaction about a financial examiner that told the FBI you knew about problems, but you wouldn`t take action because you were afraid you`d be admitting you dropped the ball."

Gov. Jay Nixon answered, "Well we`ve obviously worked for a number of years on this. It`s been a long time since I`ve been Attorney General so I`m not briefed up on it to know where that is.'"

In 2011, Stamper told the FBI "Nixon would never want to admit this."  A memo he wrote a decade earlier, begged for action.  He wrote, "Sometime down the road (consumers will say) `Hey... you guys knew about this all along and did nothing about it.` and I can only respond with two pathetic words---you`re right.`"

I asked Gov. Nixon, "The financial examiner said that your office refused to meet with him when he said this is a house of cards that will collapse."

Gov. Nixon answered, "I just, I tell you what, it`s been a long time ago, it`s been 5 and a half years since I`ve been Attorney General."

Stamper, who reportedly still works for Missouri`s Department of Insurance, remembered clearly, when asked about it a decade later.  In 2011, just before the indictments, he told the FBI 'we blew it.'

After sentencing, I asked Brent Cassity, "Did you think you were entitled to that money?"  Cassity responded, "I have no comment."

The 46-year-old is now serving five years in prison.  A judge sentenced his 67-year-old father Doug to 9 and a half.

It appears Brent`s family is still living in an upscale Clayton home.  I asked U.S. Attorney Callahan, "Is it possible that the wives are still living high?"

Callahan responded, "You know, that`s always a tough question, the wives and the children obviously didn`t commit the crimes."  He continued, "From a prosecutor stand point, we`re not interested in inflicting punishment on the family.  Our interest is purely in recovering those assets that were a result of the fraud."

He added that it appears Brent`s family is renting the Clayton home with no indication it`s being paid for by the fraud.  Agents are continuing to track down assets.

Though it`s unlikely the Cassitys and the other convicts in this case will be able to pay back everything, the debt will follow them for the rest of their life.  It cannot be discharged in a bankruptcy.

See the report (PDF): Stamper's 2011 FBI interview and 2001 Internal Memorandum

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5 comments

  • R. S.

    Check campaign contributions. Not just of NPS as criminal defendants. But all the defendants in the civil suit AND their spouses and children

  • B. G.

    Classic Ponzi scheme allowed to go on for years, perpetuated by contributions to crooked politicians and NPS having their people appointed to public offices. Director of the Board of Embalmers and Funeral Directors, Randall Singer: Director of Dept. of Finance, Insurance, and Professional Registration, Doug Oldham: and huge contributions to Attorney General Jay Nixon who signed the consent order allowing NPS to take the funds out of trusts and roll the money into insurance companies owned by NPS. How crooked is that? Thanks for looking into this issue put on the backs of Funeral Home owners and all the people in MO by the Insurance protection fund. The mass media wanted nothing to do with this story when it broke before the campaign of 2008.

  • Mike

    It just goes to show everyone that the lobbyists & rich f***s are the ones that actually control our government, not the politicians themselves.

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