Deceased and bad loan

I paid for the funeral of a now deceased individual whom stated, I would be repaid from the insurance settlement. After the funeral it was discovered the individual had no insurance. I am not related to the individual and his children are not financially fit to repay same. Does this legally qualify as an IRS deduction?

It is possible that you may be able to deduct this as a theft loss. “Theft” includes theft by fraud, and from the facts you give, this could very well be fraud.

If the decedent had any estate at all, you should have a claim against the estate to recover your expenses. Did the decedent have any assets at all?