Ex-Lincoln Memorial Life director guilty of fraud, money laundering

Brent Douglas Cassity, who had served as a director of Lincoln Memorial Life Insurance Company, has pleaded guilty before U.S. District Judge Jean C. Hamilton to participating in a fraudulent scheme involving the sale of prearranged funeral contracts and monetary transactions involving the proceeds of that scheme. 

Cassity, 46, faces up to five years in prison. 

In court, Cassity admitted that beginning as early as 1992 and continuing until 2008, National Prearranged Services Inc. (NPS), a general agent of Lincoln Memorial, sold prearranged funeral contracts in several states, including Tennessee 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. Cassity admitted, 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.

Cassity was employed at various times by NPS and served as a director of Lincoln Memorial. He also held titles with affiliated companies, including chief executive officer, chairman, president, and director of Forever Enterprises Inc. and president and director of National Heritage Enterprises. 

Cassity pleaded guilty to one count of mail fraud (count 31), one count of wire fraud (count 21), and one count of money laundering (count 38). He also pleaded guilty to willfully permitting James Douglas Cassity, whom he knew to have been convicted of a felony involving fraud or dishonesty, to exercise significant control over NPS’ affiliated insurance companies (count 50).

Cassity will be sentenced on Nov. 7. Cassity’s co-defendant and fellow NPS executive Sharon Nekol Province previously pleaded guilty to six counts of mail fraud, wire fraud and misappropriation of insurance premiums arising out of the same alleged scheme. Cassity’s other co-defendants — James Douglas Cassity, Randall K. Sutton, Howard A. Wittner and David R. Wulf — have entered pleas of not guilty and are scheduled to appear for trial starting on Aug. 5.