By Gus Burns
BAD AXE, MI—Terry Kaufman was a trusted small-town funeral director who helped families prepare for the inevitable.
That trust came at a steep cost.
For
years, Kaufman accepted money for prepaid funerals that families
believed would ensure their loved ones were buried with dignity and
spare relatives from future financial hardship. Instead, authorities
say, he kept much of the money for himself, fueling a scheme that
ultimately victimized 204 people and cost more than $1 million.
The
case rattled Michigan’s Thumb region and exposed vulnerabilities in a
system designed to protect some of society’s most vulnerable residents.
It also prompted warnings from the Michigan Attorney General’s Office,
renewed scrutiny of prepaid funeral arrangements and reviews of
procedures used by public guardians around the state.
Behind
the dollar figures were real people trying to settle their affairs,
care for aging parents or ensure a loved one would be buried when the
time came.
“There
were many people who trusted him,” said Huron County Public Guardian
Jacilyn Braun. “He was an upstanding member of the community, and he
abused his respect from the people and his respect from our office.”
Kaufman
helped establish Kaufman and Company Funeral Home in 1994 and sold his
remaining ownership stake in 2011, though he continued working there as
an employee.
‘TWO-FACED’
Grace Baker, 87, lives with dementia in a nursing home in Bad Axe, a small town of 3,000 and the Huron County seat.
After
paying for her care, she has about $60 a month left for personal
expenses. Her favorite pastime is looking through old family
photographs, her daughter, Traci Baker, said.
One of Grace Baker’s few remaining assets was a $2,150 prepaid funeral plan.
The policy had been purchased with her money through the Huron County Public Guardian’s Office and arranged through Kaufman.
Prepaid
funeral arrangements are designed to lock in costs and protect families
from financial uncertainty after a death. They are typically funded
through escrow accounts or specialized insurance policies.
Kaufman sold both.
But Grace Baker’s funeral plan never existed.
The money was gone.
And she wasn’t alone.
Kaufman
is now serving a sentence of at least seven years in prison after
pleading no contest to felony charges stemming from a decade-long scheme
that prosecutors said victimized 204 people, including 55 wards under
Huron County guardianships.
“He was very kind to people,” said Larry Brown, a former coworker. “And was two-faced about that, too.”
An
MLive review of probate court files, licensing complaints, more than
100 pages of attorney general records obtained through the Freedom of
Information Act and interviews with victims, officials and attorneys
found that many of Kaufman’s victims were elderly residents whose
finances were supposed to be protected through guardianship
arrangements.
EXPOSED
The
fraud began to unravel in March 2025 when a Huron County ward died and
was taken to Champagne Funeral Chapel in Pigeon at the direction of
family members.
Relatives produced records showing the Huron County Public Guardian had paid Kaufman $4,500 for the deceased ward’s funeral.
By
law, the money should have been deposited into an approved escrow
account or used to purchase a valid preneed insurance policy that could
be transferred to another funeral home.
When officials tried to locate the funds, they discovered they did not exist.
A
complaint was filed with the Michigan Department of Licensing and
Regulatory Affairs, triggering an investigation that uncovered a broader
pattern.
State
regulators found Kaufman received $218,019.98 from the Huron County
Public Guardian’s Office on behalf of wards but failed to properly
deposit the money or create legitimate insurance policies.
The findings prompted a criminal investigation by the Michigan Attorney General’s Office in June 2025.
Investigators found no evidence that Braun’s office or its employees conspired with Kaufman.
But the case exposed a critical oversight problem.
Braun
acknowledged her office relied largely on documentation provided by
Kaufman and did not independently verify that prepaid funds had been
placed into escrow accounts or that insurance policies had actually been
issued.
The lack of verification allowed the scheme to continue undetected for years.
HOW IT WORKED
According
to probate court records reviewed by MLive, Kaufman sometimes
represented himself as an agent for Forethought Insurance, a subsidiary
of Global Atlantic Financial Group that sells preneed insurance
products.
Contracts
listed items such as burials, vaults, headstones and other funeral
services. Some customers added services over time, increasing the value
of their plans.
On paper, everything appeared legitimate.
In reality, investigators found many policies were never established or properly funded.
Some
records also raised questions about signatures. In several cases, wards
appeared to have personally signed contracts despite lacking the legal
authority to do so.
“I don’t really know,” Braun said when asked how those signatures ended up on documents. “Typically, guardians would sign.”
Kaufman’s former defense attorney, Elizabeth Weisenbach, said the scheme functioned much like a Ponzi operation.
Money
from new customers was used to satisfy obligations owed to older
customers, creating the appearance that prepaid arrangements were
working as intended.
“People would come in to do a pre-arrangement and he was using part of their money to pay somebody else’s funeral,” Brown said.
Some funerals were paid for, despite not being backed by escrow accounts or insurance policies.
Weisenbach said such schemes often begin with relatively small financial shortcuts.
“He’d
take that money, pay the light bill and pay staff and write himself a
payroll check,” she said. “They start small and then it just snowballs.”
The attorney general’s office alleged Kaufman embezzled funds for his own benefit over roughly a decade.
Coworkers
and others familiar with the case said he frequently purchased lottery
scratch-off tickets, though authorities did not publicly tie the thefts
to gambling. The criminal case focused on embezzlement and funeral
contract violations.
WORD SPREADS
As
news of the investigation spread, customers throughout Huron County
began wondering whether their own prepaid funeral plans existed.
Many learned they did not.
Victims ultimately numbered 204, including nearly 150 private customers who were not under guardianships or conservatorships.
Among them was Brown.
After
Kaufman’s arrest, Brown contacted an insurance company to verify a
$9,995 prepaid funeral policy he had purchased in 2019.
What he learned stunned him.
“They informed me that I was deceased,” Brown wrote in a complaint. “Which, I am still alive.”
According
to Brown, records showed a death claim had been submitted using forged
paperwork bearing his wife’s signature. A settlement check was then
issued and cashed.
Brown later discovered similar issues involving additional family members.
One
complaint after another filed with the attorney general told similar
stories: elderly customers paid thousands of dollars believing their
funeral expenses had been secured, only to discover the money was gone.
Attorney General records showed average losses exceeded $5,400 per victim.
CHARGED
In November 2025, the Attorney General’s Office charged Kaufman with embezzlement involving county wards.
He
later pleaded no contest to 39 felony counts, including funeral
contract conversion, embezzlement and conducting a criminal enterprise.
A no-contest plea does not admit guilt but acknowledges that sufficient evidence exists for conviction.
A judge ordered Kaufman to pay approximately $1.1 million in restitution.
Victims, however, may never recover most of the money.
Attorney
General spokesman Danny Wimmer said there are no state compensation
funds available for victims of this type of financial crime.
While
some people may be able to pursue reimbursement through insurance
companies Kaufman claimed to represent, officials cautioned that
significant recovery is unlikely.
BROADER QUESTIONS
The case has sparked reviews of prepaid funeral practices both locally and around Michigan.
Following
the criminal case, Braun said her office began verifying the existence
of prepaid funeral funds and auditing existing contracts.
Other
counties employ stricter verification practices. Midland County Public
Guardian Steve Wixson said his office conducts annual audits and
maintains both contract records and independently issued policy
documentation.
Wimmer
said the Attorney General’s Office has uncovered several prepaid
funeral embezzlement cases through the years and is working more closely
with state regulators to identify and prosecute offenders.
He
advised guardians, family members and consumers to independently verify
that prepaid funeral money has been deposited into escrow accounts or
used to purchase legitimate insurance policies. State law requires
funeral homes to transfer prepaid funds into approved escrow accounts
within 30 days of receiving them.
Michigan
Funeral Directors Association Executive Director Phil Douma said
additional reforms should be considered, including requiring prepaid
funds to be sent directly to escrow agents rather than passing through
funeral home accounts.
The
Attorney General’s Elder Abuse Task Force has also identified stronger
oversight of public and private guardians as a legislative priority.
Meanwhile,
civil litigation continues. Lawsuits filed by Kaufman’s former funeral
home and other victims allege hundreds of thousands of dollars in
additional losses.
For Traci Baker, however, the consequences remain deeply personal.
Her mother believed her funeral plans were in place.
Now they are not.
“Obviously
they didn’t do a very good job protecting my mother’s money because
it’s gone,” Baker said. “If she died tomorrow, I don’t have the money to
do anything.”
Braun said she hopes the scandal ultimately encourages vigilance rather than discouraging people from planning ahead.
“Mr.
Kaufman broke a lot of trust within this community,” she said. “I hope
going forward those in our community still consider planning for their
future.”
Full Article & Source:
How a trusted funeral director stole $1.1 million from Michigan’s most vulnerable residents
