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
