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Final resting place: Cemeteries lack oversight

(CBS News) Roxie Williams' family struggled to pay for a proper burial for her father, but years later when she went to find his grave, the headstone was missing. She has no idea where her father is. An investigation found that cemetery workers dug up hundreds of bodies and dumped them in mass graves so they could resell the plots. This Sunday on 60 Minutes, Anderson Cooper investigates big profits and big problems in the burial business.

The following script is from "Final Resting Places" which originally aired on May 20, 2012. Anderson Cooper is the correspondent. Andy Court, producer.

Everyday in this country, grieving families spend thousands and sometimes tens of thousands of dollars on funerals, cremations and burials. They often have to make decisions quickly, at a difficult time, without doing much research or reading the fine print on contracts. And while the bereaved may believe they're dealing with mom-and-pop operations that have been in the community for many years, a lot of funeral homes and cemeteries these days are owned by big corporations, part of a multibillion dollar industry known as the "death-care" business.

The nation's graveyards are a lucrative and little-noticed part of the industry. Most of the time they're every bit as orderly and peaceful as they seem. But when things go wrong, they can go very wrong, for many years, without anyone noticing. And for the families involved, it can be a nightmare.

There are more than 40,000 active cemeteries in this country, from small churchyards to sprawling memorial parks owned by big corporations. We think of them as spiritual places, sacred ground. But in the cemetery where Roxie Williams' family buried her father, she can find no peace. She has no idea where her father's body is.

[Roxie Williams: It's row one, and it's lot 16.]

She was 11 when her father was laid to rest here at Burr Oak, an historic African-American cemetery in Cook County, Illinois. Her mother, a nurse, struggled to pay for the burial.

Roxie Williams: It's traditional in our culture to give that last rite. My brother and I ate beans, I mean, we didn't eat because she was so committed to making sure her husband was put down in a decent fashion.

Anderson Cooper: So, buying that headstone was, financially, a big deal.

Roxie Williams: A burden. I mean, a burden.

That was in 1978. Years later, when she came back to visit her father's grave, she couldn't find his headstone. When she demanded an explanation from cemetery staff, she says they acted like she was confused or crazy and threatened to call police if she didn't leave. Roxie Williams, however, wasn't crazy.

In 2009, acting on an insider's tip, the sheriff's department discovered workers at Burr Oak had been removing headstones, digging up coffins and dumping remains in mass graves so they could resell the plots. It soon became apparent an entire community had been deceived. Hundreds of bodies were thrown out over a period of many years - without anybody figuring out what was going on.

Tom Dart: We first came out here we found femurs, skulls, parts of jaws, just laying out in the open.

Anderson Cooper: Laying out on the ground?

Tom Dart: Oh yeah. I mean, we found one right over here.

Cook County Sheriff Tom Dart led the investigation at Burr Oak.

Anderson Cooper: And this was all about greed?

Tom Dart: Oh, absolutely. This was all about greed and overarching that is the fact that these areas are so horribly unregulated it allows for that to happen.

Anderson Cooper: When you say it's unregulated, what do you mean?

Tom Dart: There was no records of anything. There was no records of how many people are supposed to be buried here. We couldn't even find a blueprint of the place. And truly, in any cemetery, do you know underneath the ground who is under there? You really don't know.

What happened at Burr Oak is unusual, but the conditions that enabled it to go on for so long without being detected are quite common. Most states have few licensing requirements, no on-the-ground inspections, not even a hotline consumers can call with complaints.

Josh Slocum: It's sort of the Wild West out there.

Josh Slocum is executive director of the Funeral Consumers Alliance, a nonprofit watchdog group.

Josh Slocum: There isn't much regulation at all. And what is there, is a patchwork.

Anderson Cooper: Aren't cemeteries regulated by the Federal Trade Commission?

Josh Slocum: No. And that is a goal that we have been trying to get achieved for a long time. Since 1984, funeral homes have been regulated by the Federal Trade Commission's funeral rule. You can think of that as a consumer bill of rights at the funeral home. But those rights stop at the cemeteries.

Under that consumer bill of rights, funeral homes are required to provide their customers with a clear price list and other disclosures. Those rules, however, generally don't apply to cemeteries.

In 2004, when Lucy Perez pre-purchased a burial plot at Mt. Olive Cemetery in Chicago for $2,500, she says the salesman told her she'd paid for everything and she believed him. But when her grandson died unexpectedly six years later, she was told the cemetery would not bury him unless she paid an additional $2,550 fee for digging the grave and covering it back up. That was a month's pay for Lucy, and more than she paid for the plot itself.

Anderson Cooper: So, they were charging you $2,500 or about $2,500 for--

Lucy Perez: $2,500 to take out dirt and put it back in.

Anderson Cooper: Did you think about not paying?

Lucy Perez: We did, we started thinking about maybe going to see a lawyer and stuff because it didn't sound right. But we were grieving. You know, we had to get my grandson buried.

Anderson Cooper: So even though you sensed you were being ripped off--

Lucy Perez: Right.

Anderson Cooper: You had--

Lucy Perez: We had no choice.

Mt. Olive Cemetery may look like a local operation, but since 2006 it's been owned by Service Corporation International, or SCI, the largest provider of funeral homes and cemeteries in North America. SCI is known by the brand "Dignity Memorial." Last year the company reported an operating profit of $363 million.

Anderson Cooper: What's your experience been with SCI?

Josh Slocum: They generate a disproportionately large number of the complaints that we get from consumers.

Anderson Cooper: Is that just because they're one of the biggest organizations out there?

Josh Slocum: I don't think so because the complaints are so similar. High pressure sales tactics, misleading or outright dishonest information given to consumers, double-sold plots.

A "double-sold plot" is when the same grave is sold to two different people. That's what happened to Julie Ramirez's family after her father was buried at SCI's Mont Meta Memorial Park in Texas in 2001. The manager wanted to move him over to a different spot.

Julie Ramirez: They wanted--

Anderson Cooper: --exhume your father.

Julie Ramirez: --to exhume Daddy right away. They wanted us to--

Anderson Cooper: In order to give the plots to--

Julie Ramirez: Uh-huh (affirm).

Anderson Cooper: --somebody else.

Julie Ramirez: Yeah, absolutely.

Anderson Cooper: Why not just tell the people who hadn't yet buried their loved one that, "We're gonna have to give you a different plot"?

Julie Ramirez: That was our suggestion. We said, "Look, do not move Dad. Just leave him alone."

The cemetery, however, dug him up and moved him anyway - without the family's permission.

Julie Ramirez: It just didn't seem fair. That was his final resting place. I can see a person making a mistake but it's the way they handled it afterwards.

Anderson Cooper: Moving the body without your permission.

Julie Ramirez: Moving the body without our permission like thieves.

Michael Avenatti: I think that this company is driven by profits above all else.

Attorney Michael Avenatti has been investigating SCI-owned facilities all over the country. One of his biggest cases involves Eden Memorial Park, a large Jewish cemetery north of Los Angeles.

Anderson Cooper: How much does one plot cost, or can it cost?

Michael Avenatti: One plot at Eden Memorial Park Cemetery may cost upwards of $25,000, on a per square foot--

Anderson Cooper: Twenty-five thousand? To bury one person?

Michael Avenatti: Twenty-five thousand dollars. The average plot is approximately $8,000. But when you look at this on a per-square-foot basis, this is some of the most expensive property in California, if not in the country.

With prices that high, Avenatti says SCI had an incentive to squeeze as many customers in as possible. In a Los Angeles court, he's presented the testimony of groundskeepers who say they were ordered to cram new graves so close to old ones they had to break existing burial containers and throw human remains into the cemetery dump.

[Sands vs. SCI Courtroom preliminary hearing, Elias Medina: About 200 graves are missing bones.]

The case is still being litigated. It's not the first involving the company. In 2003, SCI agreed to pay more than a $100 million for the desecration of graves at the Menorah Gardens cemeteries in Florida. In April, Avenatti was busy gathering evidence against another SCI cemetery in Florida. Acting on a tip, he put divers in a pond at the edge of the Star of David Cemetery in North Lauderdale. They found engraved stones and what appear to be parts of concrete containers used to line graves.

SCI declined to give us an interview. Off-camera, its executives told us the problems that led to the $100 million settlement at Menorah Gardens began before the SCI purchased the cemetery, and since then the company has improved its training and procedures. At Star of David, which SCI acquired six years ago, the company says it's taking the new allegations seriously but does not believe human remains were dumped in the pond.

At Eden Memorial, where a groundskeeper testified 200 graves are missing bones, the company says it discovered potential problems with only four graves, and took steps to notify the families. As for moving Julie Ramirez's father without permission, SCI says that was against its policy, and it has reached a confidential settlement with the family.

In a statement SCI told us it's "dedicated to providing the highest quality funeral and cemetery services" and added, "while not perfect...we have consistently raised standards in this evolving industry.''

Paul Elvig: Obviously, as a corporation, they're not gonna have a policy of somehow, "Work the public over," or, "Screw the public over." They'd be foolish to do that.

Paul Elvig is a former cemetery operator and regulator and a leading spokesman for the industry.

Anderson Cooper: When you look at what's gone on just over the last two years in a number of places across the country, I mean, do you ever just say to yourself, "What is goin' on here?"

Paul Elvig: Well, I put it in perspective to the volume. When you talk about 6,500 burials and cremations a day, in over 45,000 possibly active cemeteries, when we look at that, it is very uncommon.

Josh Slocum: I have no problem conceding that most cemeteries aren't digging up bodies. But there are everyday, ongoing abuses that happen to funeral and cemetery consumers that are not headline-grabbing, and that desperately need attention. Financial exploitation, misrepresentations of legal requirements. Pressuring emotionally vulnerable people into believing that the more they spend the more love and respect that they're showing for somebody.

Anderson Cooper: Industry representatives say, look, those are isolated incidents.

Josh Slocum: Oh, nonsense. It's not a few bad apples. It's not isolated incidents. It's-- it is embedded in the fabric of the death business in this country.

Paul Elvig: I think any scenario you want to say probably has happened. I don't think it happens on a broad scale, I really don't.

Anderson Cooper: Is there a lack of oversight of cemeteries?

Paul Elvig: No. I can't buy into that general notion there's a lack of oversight. No.

Anderson Cooper: I just don't understand how you can say that. For instance, again, at Burr Oak, hundreds of bodies were dug up and tossed away for years and years and years. If there had been a regulator who came by, any inspector who'd come by, they could've actually found bones.

Paul Elvig: If they knew where to look.

Anderson Cooper: I've been to Burr Oak. And it's not that hard to find if you're walking around.

Paul Elvig: I'm aware of the Burr Oak situation. I do know that inspection in that state seemed to be lax. And I don't think it is now. It's got their undivided attention.

Nearly three years after the Burr Oak scandal, the state of Illinois has adopted new laws, but has yet to hire its first cemetery inspector. The scandal did prompt Illinois Congressman Bobby Rush to introduce federal legislation that would apply the same consumer protections to cemeteries that already exist at funeral homes. But so far, Rush has been unable to find a co-sponsor in the Senate.

[Sheriff: This is the approximate location of the grave.]

With the help of the sheriff's department, Roxie Williams was able to locate the spot at Burr Oak where her father's grave is supposed to be. But she has no idea if he's still in it.

Roxie Williams: If I had the money, I'd exhume this durn body and they'd have to prove my dad was my dad, you know? But sometimes, you just let it go.

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