Green Acres mess should have been detected sooner

Published 12:00 am Monday, February 9, 2009

Charles Ponzi is dead, but his name lives on.

Globally, the world is abuzz with the Ponzi scheme alleged to have been perpetrated by New Yorker Bernard Madoff, who may have made off with $50 billion that people, including charities and foundations, entrusted to him for investment.

In Vicksburg, the town has been abuzz with the Ponzi scheme alleged to have been perpetuated in the name of Green Acres Memorial Park.

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In both cases, more is unknown than known. In both cases, it’s clear there was a lack of oversight. If alarm bells sounded, they were ignored.

Charles Ponzi came to the United States from Italy in 1903.

In due course, he was arrested for soliciting money from people and promising them something in return. But instead of safeguarding their money as he said he would do, he converted it to other purposes and masked what was going on by continuing to attract new investors to keep a cash flow going.

He didn’t invent this practice. It was widely known to exist. But because the story was widely reported in the American press of the day, “Ponzi scheme” became shorthand for this particular variety of fraud.

When it was started in 1955, Green Acres was part of a national trend. As Americans moved to the suburbs en masse, the notion of neatly ordered, secular cemeteries to replace sprawling church and municipal burial grounds — most of which were at or near capacity — became popular. The old cemeteries with their lichen-covered arrays of tombstones — some reflecting wealth, some reflecting poverty — were in disarrary — having become too much for cities to maintain. In addition to modern designs and landscaping with the requirement of uniform grave markers, the new, commercial cemeteries offered something else: “perpetual care.” A portion of the money paid at or before the time of a burial would be invested, the cemetery owners promised in their sales contracts, and the proceeds would be used to keep the grass cut, keep flowers on all graves, trim hedges and repair roads.

As for Green Acres, just east of the Beechwood Intersection on U.S. 80, the perpetual care funds are reported to be adequate.

It’s all the other money — $373,000 — that Secretary of State Delbert Hosemann says is missing.

It represents prepayments made for grave opening and closing fees, the required vaults in which coffins are placed and bronze markers to place on loved ones’ final resting places.

The money is gone and apparently for at least a couple of years the managers have been using money paid by new customers to pay for services to the old. That’s what makes it a classic Ponzi situation.

For many years, Green Acres prospered under the meticulous management of Joe Varner who owned it almost from the time it was started until almost the time of his own death. Varner attended every funeral at “his” cemetery, watched over every detail. It’s under new absentee owners that things went awry.

Today, no one knows whether goods and services already paid for by at least 80 families will be provided when needed. Money will have to come from somewhere for that to happen. Hosemann is demanding the owners pay it back, but that’s about as likely as Bernard Madoff writing $50 billion worth of checks.

What is clear is that there’s been a lack of basic regulatory oversite.

It’s mundane clerical work, but it’s also essential. Any corporation holding money in trust to provide services to clients should not only be required to provide proof at least annually that the money is reserved and secure, regulators should face equal sanctions if they let things slide — as was apparently the case here.

There was no lack of laws under which Charles Ponzi could be locked up a century ago. There’s no lack of laws that could have headed off what has happened, apparently over several years, with Green Acres.

They just weren’t enforced.

Yes, Hosemann, who took office 13 months ago, is to be commended. But he can’t fix the situation. All he’s done is keep it from getting worse.


Charlie Mitchell is executive editor of The Vicksburg Post. Write to him at Box 821668, Vicksburg, MS 39182, or e-mail