January 11, 2018 / 3:41 PM / 8 days ago

Special Report: FBI scrutinizes funeral home with side business: selling body parts

MONTROSE, Colorado (Reuters) - The Federal Bureau of Investigation is interviewing former employees of a funeral home whose owner runs a side business on the same premises selling human body parts.

An agent with the FBI has interviewed at least four former employees who worked for funeral director and body broker Megan Hess, seeking information about how she operates her businesses, the former workers told Reuters.

The federal inquiry began several months ago, shortly after Reuters interviewed a half-dozen workers who formerly worked for Hess.

One ex-employee, Kari Escher, said she was especially troubled by the practices of Hess’s mother, Shirley Koch, who works at the facility. Escher said Koch, who embalmed and dismembered bodies, pulled teeth from some of the corpses to extract the gold in crowns or fillings.

“She showed me her collection of gold teeth one day,” said Escher, who helped manage a former cremation-marketing business owned by Hess.

Koch said “she had sold a different batch a year prior, and they took the whole family to Disneyland in California on the gold that they cashed in,” Escher said.

Reached by phone at Sunset Mesa, Koch said she did not wish to talk with a Reuters reporter. “I’m not interested. Thank you,” she said before ending the call.

The news agency had also sent written questions to Hess and her attorney about Koch’s alleged handling of gold teeth. Neither addressed the issue about the teeth.

No federal law prohibits the buying and selling of human body parts to be used in research and education.

In Colorado and most other states, it also is legal for funeral homes to sell items recovered from dead bodies, such as gold dental work. And it is not against the law to operate a so-called body broker firm from the same facility that houses a funeral home and crematory.

But the business arrangement is highly unusual. Reuters could find no other operation active in the United States that houses a funeral home, crematory and body broker in the same facility and under the same ownership.

Such multipurpose operations raise ethical concerns, several funeral industry veterans said. A funeral director who also works as a body broker could have a financial incentive to sell a body for its valuable parts rather than provide an inexpensive burial, for instance.

“The conflict of interest of having a side business in body parts just leads to problems,” said Steve Palmer, a funeral director in Cottonwood, Arizona, and former member of the policy board at the National Funeral Directors Association. “There are no ethics there when you do that. You are not looking at the full disposition (of a body). You are looking at how to make money.”

Hess runs Sunset Mesa, a funeral home, and Donor Services, a body broker operation from the same building in Montrose. Some former staff members of Sunset Mesa said they never heard Hess disclose to donors that the bodies would be sold for profit.

“The fact that now the business is also making money from the sale of body parts – if that is not being told to the family, it is unethical and probably illegal, if only as deception,” said Robert Fells, general counsel of the International Cemetery, Cremation and Funeral Association, an industry trade group. Fells called running such a multifaceted operation “a new frontier.”

Through the attorney, Hess declined to comment for this story and didn’t address questions about the FBI probe, her business practices, and the allegations by former employees. The attorney, Carol Viner, asked Reuters to “refrain from contacting” Hess employees “for any reason.”

The focus and extent of the federal probe into the Hess operation is unclear, and the FBI also declined to comment.

Separate from the FBI inquiry, Reuters has learned that Colorado state funeral regulators are investigating Hess’s funeral home, Sunset Mesa. The state’s Department of Regulatory Agencies said it has nine open complaints about Sunset Mesa – “higher than average” for funeral homes in the state, said spokesman Lee Rasizer. He would not discuss the nature of those complaints or any action it may be taking.

Reuters began examining the Hess companies more than a year ago as part of the news agency’s exploration of the human body trade, a virtually unregulated industry that largely operates in the shadows.

“ADD TO CART”

Before referring questions to a lawyer, Hess spoke extensively with Reuters about her body broker company. In an interview in 2016, she described Donor Services as a small, family business. She took orders for body parts via Hotmail, email records show. She said she and her mother, Koch, handled about 10 cadavers a month in the back room. Her father, Alan Koch, ran the crematory, Hess said.

Hess made donating a body online easy. On her cremation marketing website, a donor could simply select from a drop-down menu, fill out a few forms, click “Add to Cart,” and enter a credit card number. Her funeral home site listed her credentials, including a PhD in mortuary science.

After a reporter asked questions about the website and her background, Hess removed the “Add to Cart” donation pages from her cremation website and cut the mention of the mortuary science degree from her online biography. No such degree exists in the United States for morticians, veteran funeral directors say. Her revised online biography cited her high school degree and “a love of veterinary medicine.”

When Reuters visited her facility in 2016, Hess said Donor Services represented just 15 percent or so of her total business. But it provided an important public service, she said.

“It’s for the good of the world, and I like to help people,” Hess said.

Body brokers like Donor Services are also known as non-transplant tissue banks. They are distinct from the organ and tissue transplant industry, which the U.S. government closely regulates. Suppliers of transplant tissue must obtain federal recognition and operate as charities. It is illegal to buy or sell organs such as hearts, kidneys and tendons for transplant.

But no federal law governs the sale of cadavers or body parts for use in research or education. Few state laws provide any oversight. That means almost anyone, regardless of expertise, can dissect and sell human remains.

Reuters identified 34 body brokers that have been active across the United States during the past five years. Twenty-five of the brokers were for-profit corporations. The other nine were structured as nonprofits, including Donor Services – the only broker Reuters could find that still doubles as a funeral home.

Colorado does not regulate body brokers. It is also the only state that doesn’t license funeral directors. Funeral homes are required to register with the state, but spokesman Rasizer said the regulatory affairs department is not authorized to inspect mortuaries. It only investigates a funeral home if a complaint is filed, he said.

At Sunset Mesa, Hess charged $1,995 for a simple burial and $695 for a basic cremation, according to price lists reviewed by Reuters. Extra charges are assessed if a body is embalmed or a funeral director is involved.

Kari Escher, former manager at Sunset Funeral Directors, poses for a portrait in Montrose, Colorado, U.S., December 17, 2017. REUTERS/Rick Wilking

At Donor Services, her body parts business, Hess can generate a greater return on the dead, a different price list reviewed by Reuters showed.

Most brokers who sell body parts offer to cremate part of the donor’s body for free. Hess, however, charged families to donate their bodies – $195, plus $300 more if relatives want cremated remains returned. The charges defray the cost of picking up the deceased, she said in the 2016 interview.

There is even more money to be made in dissecting those bodies and selling the parts. A price quote Hess sent to an Arizona medical training lab in 2016 offered torsos for $1,000 each. A pelvis with upper legs went for $1,200, heads for $500, a knee for $250, and a foot for $125, according to a 2013 Donor Services price list reviewed by Reuters.

None of the former employees or associates Reuters interviewed worked directly for the body broker business. They were affiliated with her funeral business. But two said Hess sometimes bragged about how lucrative it was to sell bodies and body parts.

“She mentioned on several occasions about how much money she would be getting per month, which blew my mind,” said Jennifer Henderson, a former floral designer for Sunset Mesa. “She said that one month she got about $40,000” from selling donated bodies.

Reuters could not independently verify this figure.

“HERE’S LOOKING AT YOU”

One of Hess’s donors was Rex Dunlap, a frugal Coloradan battling brain cancer. Before he died in 2016, the 78-year-old retired contractor saved $200 on cremation by agreeing to pledge parts of his body to Donor Services. Instead of paying the standard $695 cremation fee to Colorado Cremation, Hess’s former cremation marketing business, Dunlap paid Hess $495 to take his body.

Dunlap left one specific instruction: The glass eye that he’d worn since a childhood accident should be removed and sent to his best friend. The friend would then place the glass eye in an urn containing half of Dunlap’s ashes and bury the urn atop the grave of Dunlap’s father in Telluride, Colorado. Along with it would be a note reading: “Here’s looking at you.” The rest of his ashes would be buried with Dunlap’s mother in Denver.

The plan went awry.

Slideshow (4 Images)

Meme Eberspacher, Dunlap’s niece, was at his bedside the night that Dunlap died. She says Shirley Koch came to pick up his body. At the nursing home, Eberspacher said she reminded Koch that the glass eye was supposed to be returned and suggested it be popped out there.

“She said, ‘No, no, we’ll take care of that first thing in the morning,’” recalled Eberspacher.

The eye was never returned, said Eberspacher and Dunlap’s friend, Ron Mabry.

When Mabry and Eberspacher went to Sunset Mesa the morning after Dunlap died, Hess and Koch said they could not locate the eye, Eberspacher said.

Though Koch dissected bodies in the back room at Sunset Mesa, “they claimed that the body had to be sent out for harvesting,” Eberspacher said.

Mabry said Koch told him the glass eye couldn’t be removed after Dunlap’s head was severed, embalmed and shipped to researchers.

Weeks passed before Hess told him that Donor Services couldn’t retrieve the glass eye because the company couldn’t locate the researcher who received Dunlap’s head, Mabry said. Why Donor Services was unable to trace Dunlap’s head remains unclear.

“I told them it didn’t make sense,” Mabry said. “I just had the impression that something wasn’t right all along.” He said neither Hess nor Koch told him that his friend’s body parts would be sold.

After Mabry threatened to sue Hess for losing the eye, he said Hess wrote him a check: $500, a refund of the money Dunlap had paid to donate – plus $5.

“BE A HERO”

Body brokers sometimes market their services using language that could mislead prospective donors into believing the broker handles organ donations.

Donor Services has circulated a brochure that reads: “Be a hero. Be an organ donor,” a slogan often used by organ transplant advocates. The back of the brochure featured the logo Donate Life, the national brand that promotes organ donation and is managed by Donate Life America, a nonprofit group.

The brochure, provided to Reuters by Hess during the 2016 interview, continued this way: “Every year, organ, eye and tissue transplants provide hope to tens of thousands of people suffering from disease, injury, trauma or blindness. … Thousands more patients could benefit from life saving and healing eye and tissue donations.”

The Donor Services brochure was criticized as deceptive by two major U.S. organ donation groups after Reuters shared it with them.

A spokeswoman for Donate Life America said in an email that Hess’s firm “is not a federally designated organ procurement organization” and has no permission to use the Donate Life brand.

In Colorado, the state’s organ donation program, Donor Alliance, said Hess’s marketing language “could be confusing to people.”

“We did not provide our messaging to be repurposed in this brochure, and are following up,” said spokeswoman Erin Dolin.

After contacting Hess in December about the content of the brochure, Dolin said Hess told the organ transplant group that “the brochure in question was old and has not been used for some time.”

Hess continues running a dual operation. In mid-November, she wrote an email to a surgical training company saying that she could supply a human torso, according to messages reviewed by Reuters.

“Torsos are a popular specimen these days,” she wrote. “Thank you for thinking of me.”

Reporting By Brian Grow. Edited by Blake Morrison.

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