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The court-appointed receiver of the Wisconsin Funeral Trust, which state investigators say was mismanaged to the toll of millions of dollars for people who paid for funerals in advance, said Friday that "there was substantial wrongdoing in operating the trust, and litigation is likely to occur in the near future to recover lost assets."

John Wirth, in submitting a status report in to Dane County Circuit Court, said his office has issued 39 subpoenas and reviewed more than 100,000 pages of emails and documents.

The "several hundred" people who held investments through Wisconsin's funeral homes and have died since the problems were exposed have, for the most part, had those funerals paid for, Wirth said. However, the funeral homes providing the services are getting about 60 cents on the dollar in reimbursement.

He also reported that he will ask for some changes to the way the reimbursements are made, as some consumers were not able to get their money or wanted to move the money to another trust or funeral home.

Since the news broke last fall that the Wisconsin Funeral Trust was worth considerably less than expected — there were assets of $48 million and obligations of $70.7 million — Wirth has fired executive director of the Wisconsin Funeral Directors Association, Scott Peterson, and moved the trust's assets from Bluepoint Investment Counsel, which had been managing the investments.

Even without the excluded interest obligations, the trust has $6 million less than what consumers actually deposited, the report said.

Investigating how that money came to be lost has taken up the "most significant amount of time" of the receiver's staff.

"Litigation to recover damages is contemplated," Wirth said in the report. He declined to elaborate on what kind of action he is considering because "strategically, neither I nor my attorneys believe that it would be prudent to detail those findings at this time."

Some 10,000 investors

Investigators from the state departments of Financial Institutions and Justice have described years of risky investments made by the Wisconsin Funeral Directors Association's financial advisers. This was contrary to promises made when funeral directors sold the trust agreements to customers, who were told the investments would be safe, and would pay for their funerals.

There were 10,835 "consumer-depositers" in the trust through 159 funeral homes across Wisconsin, with account balances from about $20 to more than $28,000. More than 30 of those funeral homes had more than 100 accounts, and one had 413 accounts worth more than $2.4 million.

Wirth said he is also close to selling Requia Life Insurance, the WFDA's money-losing life insurance company that is owned by the trust and which has a stated value of $4.2 million. In all, Wirth estimated the trust has a "deficiency of probably $23 million or more."

Ziegler Lotsoff Capital Management, chosen by Wirth to take over the trust's investments, liquidated all the trust's assets except private equities and the life insurance company after concluding that "the investments held by the trust were totally inappropriate for this type of investor."

An audit of the trust is expected to be complete in the next 30 days, Wirth said. In the meantime, those remaining funeral trusts are being credited with 1.85 percent interest.

Wirth recently testified at a hearing at the Department of Workforce Development in opposition to former executive director Peterson's application for unemployment insurance payments.