MADISON (WSAU) Investigators are trying to determine if a pre-paid funeral plan violated state securities’ laws. About 500 funeral homes in the Wisconsin Funeral Directors Association offered the pre-paid plans to their local residents – and their money was then invested in a single trust account.
On Friday a judge in Madison ordered a receiver to take control of the account, after it was found to have a $21-million shortfall. The receiver is a Milwaukee lawyer who will protect the more than 10,000 customers of the pre-paid funerals. Officials said the fund was supposed to have around $70-million in it – and the state Justice Department is helping the Financial Institutions agency determine where the money went.
The agencies filed court records which said neither the customers nor the funeral homes had any input over the way the funds were invested. The officials compared the trust to a Ponzi scheme, which endangered the ability of current investors to get their original funds back, much less the returns they were promised. A group called Fiduciary Partners held the money.
The Milwaukee Journal Sentinel said two brothers – Michael and Patrick Hull – were advisers to the fund since it began. Michael Hull said Friday that he and his brother broke no laws. But on Saturday, Hull declined further comment and said a New York law firm was working with him.