For almost as long as people have been dying, con artists have been trying to make a living off of it, but Doug Cassity's scam was among the most diabolical of all.

Based outside St. Louis but operating nationwide, Cassity's business, National Pre-Arranged Services or NPS, targeted a basic human anxiety.

"What is being exploited is Grandma's fear of death, Grandma's fear of what her death will do to the family," Joshua Slocum of the Funeral Consumers Alliance tells American Greed.

It was a winning strategy for Cassity, who played those fears to the tune of $450 million. But the money came from grieving families, and from small, family-owned funeral homes across the country.

NPS sold pre-paid funeral contracts that functioned like insurance policies, allowing Grandma or anyone else to arrange their funerals in advance and pay upfront. The contracts were sold as a way to provide peace of mind. But it turned out Cassity was skimming millions of dollars, hiding his crimes by simply having employees white out the payment information on the contracts and fill in different numbers.

By the time Grandma died and the family sought to cash in the contract, the money was long gone, leaving funeral directors like Carmen Hughey-Deichman of Mount Vernon, Illinois, on the hook. She says she is still honoring NPS contracts to this day, at a huge loss to her small family business.

"It'll be maybe five million before it's over. I mean, that's a rough estimate, but I would say it would be close, and I will probably not be here when the last one goes through the office," she tells American Greed.

Cassity, now 70, is serving a nine-and-a-half year sentence at a federal prison in Southern Illinois after pleading guilty to seven felony counts in 2013. His son Brent, 49, is serving a five-year sentence after pleading guilty to his role in the scam.

Still, funeral fraud lives on, despite a federal crackdown that dates back more than 30 years.

Know Your Rights

Alarmed by the prevalence of fraud, the Federal Trade Commission enacted its Funeral Rule in 1984.

"The core of the rule is really to make sure that people have accurate price information and know exactly what they are buying when they make funeral arrangements for a loved one which can be an incredible stressful and trying thing to do," says Lois Greisman, Associate Director in the FTC's Marketing Practices Division.

The rule includes a bill of rights for consumers, guaranteeing your rights to, among other things:

• Buy only the funeral arrangements you want.
• Get price information on the telephone.
• Get a written, itemized price list when you visit a funeral home.
• See a written casket price list before you see the actual casket.

The FTC has been known to conduct sting operations, "test shopping" funeral homes to see if they comply with the law. Penalties for violators can be stiff.

"They can be subject to a civil penalty in a federal district court action. And civil penalties can range as high as $16,000 dollars per violation," Greisman says.

Pay Now, Die Later?

Just outside Chicago, the Simkins Funeral Home in Morton Grove, Illinois takes pains to comply with the law, not just out of fear of getting in trouble with authorities, but to protect a reputation built over more than 75 years in operation.

"I would certainly recommend going to a family-owned funeral home. An independent family owned funeral home," Michael Simkins, part of the third generation of his family in the funeral business, tells American Greed.

"The way we run our operations here, were going to be in front of you the whole time," he says. "Whether that's from the removal, through the arrangement conference, through the service where everything concludes. We like to have that family feel here and families seem to appreciate that."

Simkins encourages families to plan for funeral expenses so there are no surprises later. A reputable funeral director will walk you through the expenses with no obligation.

"My advice would be if you've ever thought about burial or cremation, or where you might want to be buried, that you've already started your funeral arrangements," he says. "And I would just suggest that when it's convenient for you, come and see me. Come and see a local funeral director. Finish those arrangements."

But he says while pre-planning is a good idea, pre-paying rarely is, because the savings vehicle—typically limited by law to a trust or insurance company—normally offers very low returns. About the only time it does make sense, he says, is when a person is trying to spend down assets in order to qualify for public assistance such as Medicaid—a frequent scenario when someone is going into a nursing home.

Simkins says his funeral home did some business with Doug Cassity's NPS, but realized fairly quickly that something wasn't quite right.

"As their contracts were coming in and people had an NPS-funded funeral, I was consistently getting underfunded. And underfunded by a good deal," he recalls. "So before I committed more contracts with that company, I simply stopped using them and explored other companies that would better serve our purpose."

Hundreds of other funeral homes and grieving families were not so lucky.

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