This time it is a cemetery that is unable to pay for pre need goods and services sold to consumers. Apparently letters were sent to about 1,300 customers of  Westlawn Memorial Gardens Cemetery advising consumers that their pre paid purchases will not be honored.  Michael Graham, who died in 2007, was the owner of the property was originally charged with embezzling funds from the trust.

Quite frankly,  I am surprised that there have not been more cases of cemeteries defaulting on their pre need contracts. Cemeteries were in the pre need business long before funeral homes. They began selling pre need cemetery lots in the 1940’s. Of course the land was there and I do not know of any instance that consumers were denied access to their lot.

In the 50’s cemeteries began selling pre need memorials and vaults and trusting some of the funds to provide for future delivery. At the time there was a tremendous backlash from others in the industry eventually leading to trusting laws and to protectionism. Some state legislators were convinced by the funeral lobby to limit sales of vaults and caskets to funeral directors. Eventually these self serving tidbits were overturned. Never the less the cemetery industry has seen a very small number of fraudulent  incidents as compared to the funeral industry.

So far, there has never been a 100 million dollar event as there have been at least two for funeral pre need plans. Unfortunately there are hundreds of millions of dollars of consumers money in trust funds overseen by cemetery companies. So just like the incident in Topeka, it is only a matter of time before greed or need will cause a larger incident.