Growing Cemetery Scandals Also Divide State Agencies : Inquiries: Assembly to begin hearings on gruesome findings. But a conflict among agencies adds to confusion.

What started as gruesome discoveries in two Southern California cemeteries now tops the state’s list of consumer scandals.

State investigators have taken over five California cemeteries and are seeking control of at least four more in an expanding probe that has taken several bizarre turns and pitted two state agencies against each other.

The whole macabre mess will fall before the public’s eye at an Assembly subcommittee hearing today in Sacramento, where legislators are expected to demand an investigation of how the state’s burial grounds were allowed to get so out of hand.

The state’s probe of cemeteries--some of which stand accused of embezzling customers’ money and at times reselling burial plots or committing other morbid misdoings--is the Department of Consumer Affairs’ “No. 1 priority,” agency spokeswoman Maria Chacon Kniestedt said. The hearing, called by Assemblyman Willard H. Murray Jr. (D-Paramount), will be full of unhappy people--regulators who blame each other for confused investigations, and industry leaders who say regulators have been blowing the whole thing out of proportion.

But the saddest statements are likely to come from bereaved relatives of those buried in the troubled graveyards--some of whom have been told they will probably never know what happened to their loved ones’ bodies. Others only recently found out that hundreds of thousands of dollars that were supposed to go into maintaining the cemeteries they chose for their relatives might have gone into the pockets of cemetery owners.

“These things have been going on for years, and nobody caught it,” said Murray, who heads the budget subcommittee on state administration, which funds the state Cemetery Board. “The question is why? Was it too much influence by the industry? Was it a lack of resources? That’s what we’re looking for.”

His search for answers will be made more difficult by warring among state officials, unpaid bills, allegations that a state auditor accepted a loan from a cemetery, and by a reform-minded investigator who is threatening to quit.

The Cemetery Board, which under crusading new Director Ray Giunta had launched the investigations in June, was swallowed almost whole by the bigger state Department of Consumer Affairs this month.

Immediately after taking over, the consumer department raided Giunta’s offices while he was out of town and seized many of his agency’s records, including checkbooks. The Cemetery Board had used the checkbooks to pay for operations at the cemeteries it took under control.

But Consumer Affairs officials admit that they did not realize they had the checks, and when they found out, decided not to pay the bills until they had sorted out their own plans; as a result, relatives who visited some of the cemeteries two weeks ago found themselves locked out. The burial grounds have since been reopened.

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Giunta says he might quit his post, contending that the state no longer wants an aggressive investigator on the job and that it is treating him and his staff “like criminals.” Since he took the position last year, Giunta generally has won praise from families and legislators for the way his overwhelmed three-member staff has moved to regulate the state’s 200 cemeteries after 20 years of inaction under another director.

The scandal tainting the California burial industry began when Giunta seized Paradise Memorial Park in Santa Fe Springs four months ago. Investigators allege that burial plots had been resold numerous times and that $40,000 in funds to care for the park was missing. Dug-up human remains were found piled behind a tool shed.

The owners, Alma Fraction, 68, and her two children, Victor Fortner, 48, and Felicia Fraction, 30, remain under criminal investigation, according to the Los Angeles County Sheriff’s Department.

A few weeks later, the Cemetery Board took control of Lincoln Memorial Park in Carson. Headstones were found piled in dumpsters and being used as roadside curbs, and some caskets were covered by just 2 or 3 inches of soil, investigators said.

Investigators now say about $800,000 is missing from the endowment funds at Lincoln, Hollywood Cemetery and Gold Cross Mortuary, all of them subsidiaries of the Hollywood Cemetery Assn., which is owned by Jules Roth of Los Angeles and Orange County businessman Ray Novelli. Both have repeatedly declined to comment.

Endowment funds, required to keep cemeteries open and maintained, have been the focus of most of the state’s investigations and seizures recently.

After the early revelations, calls poured in with complaints about cemeteries around the state, inundating the tiny Cemetery Board staff and its annual budget of $400,000.

“We were out of resources,” Giunta said.

The Cemetery Board was slated to be dissolved at the end of the year anyway, with its responsibilities going to the Department of Consumer Affairs. Giunta suggested that the department step in early.

Giunta, widely recognized as the most knowledgeable official in the state about cemetery regulation, was to have stayed on as a consultant to the larger department and his staff members were to have been brought on board.

But a rift has developed between the two agencies. While Giunta was in Los Angeles at a meeting about the Paradise and Lincoln cemeteries, Consumer Affairs officials went into the Cemetery Board’s Sacramento offices and seized boxes of records. Cemetery Board staffers have been offered positions not relating to cemeteries, Consumer Affairs officials said, and Giunta believes he is being forced out.

“We are the people who have exposed the problems for 14, 15 months now,” Giunta said. “They have to regulate 200 cemeteries and these two or three guys are the best experts.”

Giunta’s backers are lining up in criticism of Consumer Affairs.

“All of a sudden [Consumer Affairs] decided, well, we’re in charge, so let’s go seize everything,” said Mike Mintz, a private cemetery consultant who has taken over the operation of Paradise on behalf of the state. “They’ve got it all now, and they don’t know what to do with it.”

Assemblywoman Juanita M. McDonald (D-Long Beach) said Giunta not only brought the problems to light but also dealt well with potentially volatile situations when thousands of bereaved relatives showed up at Paradise and Lincoln.

“I told [Consumer Affairs officials] they will not mess over Ray Giunta because he was the one that held down what would have been a riot,” McDonald said.

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Others, however, contend that Giunta’s high-profile crackdown on problem cemeteries has caused unnecessary public fear.

“It was blown out of proportion,” said Steve Doukas, a Colma cemetery manager who is chairman of the Cemetery Board and one of its two industry representatives. The six-member appointed board--which now has two vacant seats--oversees Giunta and his staff. “Any time it hit the paper, people thought their loved one was gone. Even in Paradise, some of the graves were intact. And in Lincoln, I haven’t heard of any proof yet that a body was out of place.”

Ray Saatjian, deputy director of the Department of Consumer Affairs, denied that there was any malicious intent in seizing the records, and said that Giunta is still welcome to join as a consultant.

“We gathered the records so that someone in state government . . . could begin to address the problems in the state’s cemeteries,” Saatjian said. “We didn’t go out of our way to exclude Ray Giunta. We sensed a certain urgency and we wanted to get cracking on it.”

Part of that urgency may have come, Giunta said, from his September request for an internal investigation of one of his own staff members, the Cemetery Board’s only auditor. In defending the quick seizure of records, according to Giunta, Consumer Affairs officials claimed that they wanted to make certain all documents were secure.

Giunta said he asked for the investigation after the auditor for months neglected to turn in a financial report on Angeles Abbey Memorial Park in Compton, which is under investigation for alleged financial inconsistencies. The state also is looking into allegations that the cemetery sold bodies for medical studies, cremated bodies instead of interring them and sold the caskets back to funeral homes.

Angeles Abbey owner Jean Sanders said she was working to get the cemetery’s corporate and financial papers in order, but denied all allegations of mishandling of bodies.

“We follow everything to the letter,” Sanders said.

According to Giunta, the auditor, while denying any wrongdoing, admitted borrowing $100 from a trustee at the cemetery while in town to study its financial records. He then said he had lost his report on Angeles Abbey, Giunta said. Financial inconsistencies at the cemetery surfaced a short time later. Consumer Affairs officials declined to confirm or deny reports that the auditor is under investigation.

With a cemetery “crisis” in the making, spokeswoman Kniestedt said the Department of Consumer Affairs has about 20 of its employees working on the cemetery scandal seven days a week. The state attorney general’s office, the Los Angeles County district attorney’s office and other agencies are helping with the investigation.

Consumer Affairs officials said they are not sure how many cemeteries are under state conservatorship, or which ones are being investigated.

But according to Cemetery Board documents, five graveyards have been brought under state control since Giunta took over in 1994, most of them for alleged financial misdoing: Lincoln; Hollywood; Sunnyside Cemetery in Long Beach; Abbey Funeral Center in Anaheim and Mountain View Memorial Park in Garden Grove.

Conservatorships, officials said, are being sought against four more: Paradise, Angeles Abbey, Woodlawn Memorial Park in Compton and Inglewood Memorial Park.

Several others are under investigation, according to Cemetery Board members.

While criticizing Giunta’s keeping of records, Consumer Affairs officials agreed that his office had been justifiably overwhelmed by a problem left unchecked for 20 years.

“It is clear that a staff of four or five members could not keep up with the crush,” Saatjian said.

Previous Cemetery Board Director John Gill has come under fire from board members and Consumer Affairs for allegedly failing to properly investigate troubled cemeteries during his two-decade tenure. He was fired in 1994 and Giunta was brought in.

Consumer Affairs contends that with the investigation in its hands, the state finally has the funding and manpower to address a serious consumer problem. But some at the Assembly hearing are expected to call for the department’s removal from the case--less than a month after it took over.

“The department is totally incompetent” at regulating cemeteries, said Lilyan (Cuffie) Joslin, an 11-year member of the board. “Everything has just halted--except the anger of the people.”