2 arrested in alleged bogus funeral scheme

Federal agents arrested two women Wednesday -- including one who worked at a mortuary -- on charges of staging phony funerals to collect an estimated $1 million in life insurance and other payments.

The women bought insurance policies on fictitious people and, after the policies matured, arranged for bogus death certificates and burials or cremations for their nonexistent corpses, according to a federal grand jury indictment.

In one sham funeral for a “Jim Davis” at a Long Beach mortuary, authorities allege, the casket was loaded with various items to simulate the weight of a corpse. A grave plot was purchased in Compton and the casket buried, according to court records.

After the staged funeral and burial, the women, working with others, filed false paperwork with the county indicating that the remains had been cremated and scattered at sea, according to court records.

Besides collecting life insurance payments, advance payments secured by the policies were collected from financing companies to pay inflated funeral costs, authorities say. Fake billings totaling tens of thousands of dollars were created, the indictment says.

“The level of deception is shocking,” said Special Assistant U.S. Atty. Anthony Montero. “You’d like to think that funerals happening in funeral homes . . . are legitimate and real.”

The women, Faye Schilling, 60, a Hawthorne phlebotomist, and Jean Crump, 66, of Los Angeles, a mortuary worker, allegedly had accomplices, and more arrests could be made, officials said.

“I do think it’s a larger scheme,” Montero said.

Two other women, Lydia Eileen Pearce, 37, who owned Steward-Pearce Mortuary in Long Beach, and notary Barbara Lynn, 54, of Los Angeles previously pleaded guilty in connection with the alleged scam, Montero said.

Reached Wednesday evening, Schilling, who was freed on bail, denied the charges. “That’s a lie,” she said. “That’s not my line of work, that’s not something I do. . . . That’s not true.” She declined to comment further. Crump and her attorney could not be reached immediately.

Investigators are still trying to determine if the identities of actual people were stolen or if fake decedents were made up, Montero said. “Ultimately, I believe they are going to end up being purely fictitious,” he said.

The insurance polices were purchased in amounts ranging from $50,000 to $450,000, Montero said. The defendants collected on polices as large as $250,000, he said.

In one instance, Crump offered a doctor $50,000 to fabricate medical records to support the cause of death listed on the phony death certificate, the indictment says.

In another case, the defendants are accused of faking the cremation of a “Laura Urich” and collecting $5,000 in funeral expenses and $50,000 in insurance death benefits through two purported beneficiaries, according to court records.

The scheme continued from 2004 to early 2007, Montero said. Federal agents began investigating after people who were approached by the women to join the scam reported it to authorities, he said.

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rich.connell@latimes.com