On July 15, 2015, a former funeral director, William W. Ryder, pleaded not guilty to a single indictment alleging insurance fraud involving final expense and pre-need insurance policies of the Columbian Mutual Life Insurance Company. The insurance fraud indictment was the parting shot of a grand jury that had handed down over 70 different indictments against Mr. Ryder.
On June 24, 2015, Mr. Ryder pleaded not guilty to 61 indictments: 56 indictments charging him with grand larceny and five indictments charging him with improper disposition of a human body. At his July 15 arraignment, he pleaded not guilty to an additional ten grand larceny indictments and the insurance fraud indictment.
The grand larceny indictments arose from allegations that Mr. Ryder converted over $375,000 from 70 persons who funded “pre-need” funeral arrangements through his funeral home. Under the regulations of the State’s Board of Registration in Embalming and Funeral Directing (“Board”) pre-need funeral contracts can only be financed through:
- Funeral trust accounts,
- Pre-need insurance policies, and/or
- Final expense or traditional life insurance policies.
Instead of using the required financing methods that would have secured the pre-need purchaser’s assets, Mr. Ryder allegedly converted the money paid for these pre-need funeral arrangements into his own business account.
Wife indicted with husband for allowing her insurance agency to be used for false applications
In addition to Mr. Ryder, the grand jury also indicted Mr. Ryder’s wife, Susan Ryder, on one count of grand larceny and one count of life insurance fraud. Mrs. Ryder had been a licensed insurance agent for a pre-need and final expense life insurer, Columbian Life Insurance Company (“Columbian”). Mrs. Ryder allegedly allowed her husband to submit over 200 falsified applications for pre-need or final expense life insurance for which she was paid over $100,000 in commissions.
Funeral board inspection results in quick license suspensions and discovery of missing escrows and insurance policies
On May 27, 2014, an investigator with the State’s Board of Registration in Embalming and Funeral Directing (“Board”) received a phone call expressing concerns about how Mr. Ryder’s funeral home was handling bodies. The next day, May 28, 2014, an investigator went to the Ryder Funeral Home in South Hadley and discovered seven human bodies that were not being properly stored and were in varying states of decomposition. Later that day when the investigator returned to the funeral home he found two additional bodies had been delivered to the funeral home that were simply placed in the garage and a back storage room.
The investigator inspected the business office of the funeral home only to find it in disarray. According to his report, relevant paperwork was strewn about the office without any apparent organization at all. Upon reviewing the relevant paperwork associated with the bodies currently in the Ryder Funeral Home, the inspector found these files included missing instructions from the family, missing signatures, missing supplemental identification information, as well as documents appearing to have been altered.
On May 30, 2014, the Board suspended both Mr. Ryder and his funeral home’s licenses based upon findings that he and his funeral home posed an immediate and serious threat to the public’s health, safety, or welfare. Mr. Ryder and his funeral home waived a hearing and agreed to the summary suspension for the eleven different violations of the Board’s rules. Along with the charges regarding “failing to properly handle—including, but not limited to, failing to timely bury or cremate—nine decedents” the Board charged that Mr. Ryder and his funeral home had:
- Fail[ed] to properly maintain funeral pre-need [insurance] contracts and [escrow] arrangements in violation of [the Boards regulations]; and
- Engag[ed] in fraud, deceit, and/or misrepresentation in violation of [the Boards regulations].
Investigation of the funeral home’s handling of insurance premiums and escrow payments results in Attorney General filing suit
After Mr. Ryder and his funeral home surrendered their licenses, the Attorney General and the Board obtained a list from Columbia of all the insureds for whom the Ryder Funeral Home had purchased pre-need insurance policies as well as a list from the funeral home’s bank of all the customers that had pre-need funeral trust accounts.
A follow-up investigation of these lists, resulted in over 60 consumers producing evidence of the funeral home having collected over $340,000 for life insurance policy premiums or deposits for funeral trust accounts.
On September 12, 2014, the Attorney General filed suit against Mr. Ryder and the Ryder Funeral Home, Inc. in Hampshire Superior Court. The suit alleged that Mr. Ryder and his funeral home (“Defendants”) had not accounted for consumers’ missing pre-need deposits, insurance policies, or funeral trust accounts.
The Attorney General’s complaint alleged that the Defendants had received monies from their customers to purchase either pre-need insurance policies or establish funeral trust accounts. However, instead of purchasing these pre-need insurance policies or establishing funeral trust accounts for consumers using consumers’ funds, the Defendants misappropriated the funds for their own benefit and did not establish funeral trust accounts or purchase pre-need insurance policies as required under state regulations.
The complaint also alleged that the Defendants did not take steps to cremate or promptly bury bodies, and did nothing to prevent the decomposition of unembalmed bodies.
Sale of business nets $900,000 for creditors, defrauded consumers and the tax collector
In her suit, the Attorney General also sought and obtained a real estate attachment on the Ryder Funeral Home property and additional restraining orders against the Defendants transferring assets in an attempt to recover the over $340,000 in converted deposits and insurance premiums that the Attorney General at that time believed consumers had lost.
These attachments and restraining orders were successful in capturing an interest in the proceeds of the $900,000 that two Springfield funeral directors, Joseph Curran and Timothy O’Brien, offered to purchase what remained of the Ryder Funeral Home’s business and location.
On December 31, 2014, the Hampshire Superior Court, where the Attorney General’s suit was pending, modified the outstanding attachment or restraining orders to allow the sale of Mr. Ryder’s funeral home to go forward.
At the time of the sale in January, the $900,000 appeared to be sufficient to pay off all Mr. Ryder’s debts and claims, including back taxes, liens, mortgages and the prepaid funeral services. Whether this money will be sufficient to satisfy all the creditors is not clear. Presently there are eight additional lawsuits brought against Mr. Ryder by relatives of deceased whose remains were mishandled by the Ryder Funeral Home, in addition to the Attorney General’s action.
In Mr. Ryder’s case, however, he has no access to the money. The court has appointed him a public defender.
