HOUSTON—Instead of buying peace of mind, scores of Texans lost a piece of their retirement savings after doing business with a Houston man selling affordable pre-paid funeral and cremation services.

“Who can you trust in this world now?” quipped Brian Knowlton. “Don’t trust nobody.”

Knowlton and his wife Sonja didn’t want to burden their children with handling their final affairs, so they looked for a pre-paid cremation plan.

They said a well-dressed, smooth-talking salesman named Larry Payette had all the right answers.

“He talked a really good game, I mean he was very convincing,” Sonja Knowlton said.

“It seemed like it was on the up and up,” added Brian Knowlton.

11 News

Victims say Larry Payette had all the right answers.

The couple signed a $3400 contract with Payette’s company Dignified Affordable Funerals and Cremation, and quickly received official looking photo identification cards bearing the company logo and a toll free number to call for services.

“It all looked good,” Brian Knowlton said.

But looks can be deceiving.

“He told us he was a reverend in the church,” said Dignified customer Richard Szymczyk.

Szymczyk and his wife Dorothy said part of Payette’s sales pitch was that he was a holy man, and that made them more trusting.

They too, signed a $3400 dollar pre-paid cremation contract.

“You think someone who’s a minister would be truthful, and wouldn’t be trying to jip somebody,” Dorothy Szymczyk.

According to state regulators, Payette gypped dozens of Texans, mostly elderly couples on fixed incomes. The Texas Department of Banking, which regulates pre-paid funeral and cremation contracts, has identified at least 124 victims who shelled out anywhere from $1500 to more than $17,000 dollars to Dignified and got nothing in return. The collective loss totals $329,599.

“I think it’s deplorable,” said Russell Reese, Director of Special Audits for the Texas Department of Banking.

Reese equated Payette’s business practices to a Ponzi scheme, in which early cremation contracts were paid for with funds from customers who signed later on. But problems occurred when it came time to pay for those cremations.

“He did not have the funds to take care of those consumers, therefore it all kind of blows up on him,” Reese said.

State auditors also said Dignified was operating without a permit. That’s critical because if it had been, the state could tap into a restitution fund set up to repay consumers should a company go under.

“Without a permit, the consumers that have pre-paid, I’m unable to protect those as we would with a licensed permit holder,” Reese said.

The Texas Banking Commissioner is taking legal action against the so-called reverend and his company to recoup that $329,599 in restitution, plus another $248,000 in civil penalties. But at a recently scheduled hearing, Payette was a no-show. The business store front in the 400 Block of Highway 6 South is locked, dark and empty inside.

11 News: “Do you know where he his?”

Reese: “No sir I do not.”

But we were able to catch up with Payette getting a haircut one day at a salon in West Houston.

11 News: “The State of Texas says you owe a lot of people a lot of money and we’d like to talk to you about that when it comes to prepaid funeral and cremation contracts.”

Payette: “Oh I’m not in that business.”

11 News: “Oh you were in that business sir.”

Payette: “Yeah, but I don’t want to talk to you.”

11 News: “The State of Texas says you owe $329,000, what do you have to say?”

Payette: “I don’t want to talk to you.”

Payette did send 11 News a statement claiming the Banking Commission is wrong and that 90% of client contracts were completed. It also said there were many happy customers because “he gave more than expected.” Payette also blamed a business investor for the company’s downfall.

As for the alleged victims, there’s the sinking realization they may never see a dime of their money.

“It just, it hurt,” said Dorothy Szymczyk.

“If we don’t collect, I’d still like to see the guy in jail,” said Richard Szymczyk.

“They need to put him under the jail,” said Brian Knowlton.

And what would they tell Payette himself?

“I’m not allowed to say that on TV,” said Sonja Knowlton. “That bad, seriously that bad.”

11 News: “You have nothing to say for yourself?”

Payette: “Nothing, nothing .”

11 News: “You took all this money and ...”

Payette: “You need to talk to my attorney, just leave it alone, I’m finished OK, thank you.”

Payette later told us that attorney wouldn’t work on a contingency basis and therefore didn’t represent him. Payette then asked 11 News if we could recommend him a lawyer.

The pre-paid funeral business is a booming industry. Approximately 800,000 Texans currently hold contracts totaling nearly $3 billion according to the Texas Department of Banking. Unfortunately, it’s an industry ripe for fraud given the majority of clients are elderly—some of the most vulnerable of consumers.

There are ways to protect yourself. Any legitimate company must use a state-authorized contract to sell pre-paid funerals and creations. The form includes a space for the company’s permit number. You can check up to see if that number and company are legitimate by calling the State Department of Banking.