LANSING (WWJ) - Michigan Attorney General Bill Schuette and Licensing and Regulatory Affairs Director Steven H. Hilfinger announced charges against 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 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.
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.
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.
Kaznowski is charged with one count of racketeering and seven counts of embezzlement, and is expecting arraignment on Dec. 7.
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 online.