Funeral Manager charged with racketeering, embezzlement

LANSING, MI--Michigan Attorney General Bill Schuette and Licensing and Regulatory Affairs (LARA) Director Steven H. Hilfinger today announced the Attorney General's Criminal Division has charged a former Bay City business manager for her alleged embezzlement of at least $436,000 in pre-paid funeral funds and insurance premiums. The charges result from a joint investigation by the State Bureau of Commercial Services within the Department of Licensing and Regulatory Affairs (LARA) and the Attorney General, of the Stapish-Cederberg Funeral Homes in Bay City and Essexville. Investigation began in July 2011 after the funeral homes continued operating despite allowing their licenses to expire. ''Conscientious citizens who purchase funeral services should not have to worry about whether the money will be there when their loved ones need it most,'' said Schuette. ''We will hold accountable anyone who abuses their position of trust for personal enrichment.'' It is alleged that from January 2005 through June 2011 Erica Cederberg Kaznowski, 41, of Bay City, embezzled approximately $436,000 in prepaid funeral funds and insurance premiums for prepaid funeral expenses received while she managed two Stapish-Cederberg funeral homes in Bay City and Essexville. Instead of properly escrowing the funds and sending premiums to the insurance companies, Kaznowski allegedly embezzled the funds paid by 89 victims. In one case, it is alleged that families of victims were denied access to the funds to which they were entitled when funeral expenses were incurred. ''While our focus remains on assisting our customers who work in good faith to comply with the funeral laws and regulations, our Bureau of Commercial Services will not hesitate to take enforcement action against those operators who flaunt the laws and regulations, as in this case,'' said Hilfinger. The alleged embezzlement of funds was uncovered by an audit performed by the Bureau of Commercial Services, the state agency charged with regulating funeral homes. On September 7, 2011, Stapish-Cederberg Funeral Home West, Stapish-Cederberg Funeral Home East, and Erica Cederberg Kaznowski were served with Cease and Desist Orders that demanded the halt of funeral home operations. Additionally, the Prepaid Funeral and Cemetery Sales Act registration utilized by the funeral homes and Kaznowski has been summarily suspended. ''It is important for consumers to know that the law protects their pre-need investments, and that law enforcement officials will take action against those that violate that trust,'' said Phil Douma, Executive Director of the Michigan Funeral Directors Association. ''Funeral directors across the state take this responsibility very seriously and we appreciate Attorney General Schuette and local law enforcement standing strong with us in that effort.'' The following charges against Kaznowski have been filed by Schuette with the 74th District Court in Bay City: * One count of Conducting Criminal Enterprises (Racketeering), a felony punishable by up to 20 years in prison and/or a $100,000 fine; and * Seven counts of Embezzlement by Trustee ($1,000 - $20,000), a felony punishable by up to 5 years in prison and/or a $10,000 fine or three times the amount embezzled. Schuette encourages consumers considering the purchase of pre-paid funeral services to take time to evaluate both the seller and the products. Consumers can find helpful advice and a list of questions to consider in Attorney General's Consumer Alert for Pre-Paid Funeral Contracts, available on the Schuette's website at http:// 1.usa.gov/snhQzB. A criminal charge is merely an accusation and the defendants are presumed innocent unless proven guilty. Copyright © 2011 State of Michigan Published: Thu, Dec 15, 2011