The West Virginia Legislature’s Audit Office has given that state’s Funeral Board a failing grade.   The audit report was covered in detail in the September 25th editions of the Memorial Business Journal and the Funeral Service Insider, and we recommend both newsletters to our readers.  Hyperlinks to the newsletters are below.  In a nutshell, a former president of the Funeral Board made fraudulent death claims on about $1 million of Homesteaders insurance policies.  Homesteaders sued the funeral director, and won a judgment.  With help from a local businessman, the funeral director settled with Homesteaders.  The West Virginia Attorney General’s Office brought a separate lawsuit, and the former Board president reached a settlement with the Attorney General.   Watching the funeral director wiggling from the hook of responsibility, the West Virginia Funeral Directors Association pressed the State Board to take action against the funeral director.

Eventually, the WVFDA became frustrated with the lack of action taken by the Funeral Board, and reached out to the West Virginia Legislature.  Then two years after first receiving notice of the fraudulent conduct, the State Board accepted a ‘plea bargain’ agreement prepared by the funeral director’s attorney.  Per the plea bargain, the former Board president received a 6 month license suspension.  This outraged some of the State Board members, and the West Virginia Funeral Directors Association.

The Legislature responded quickly, and within a few weeks, their auditor went calling upon the State Board with his findings.  The Board’s Executive Director responded in writing, citing the advice given by their attorneys that the Board’s hands were tied until a complaint was received.  The letter also attempts to justify the plea bargain by explaining the legal costs avoided by the State Board.  But the letter only served as fodder for the auditor in lambasting the State Board for favoring one of their own over the duty to protect consumers.

In actuality, the Board and its staff did probably perceive the plea bargain as an expedient resolution.  But in doing so, the Board members failed their industry and consumers.  For the three new members that voted to approve the plea bargain, their credibility is ruined.  Sunsetting the State Board is not the appropriate answer.  As the auditor suggests, the State Board needs to be reconstituted, and with industry members with strong ethical track records.

*Reprinted from the Funeral Service Insider – September 25, 2017

**Reprinted from the Memorial Business Journal – September 25, 2017

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