updated 4/9/2009 9:49:12 AM ET 2009-04-09T13:49:12

Two women have been charged with staging sham funerals to collect life insurance payments and other money totaling an estimated $1 million.

Hawthorne phlebotomist Faye Schilling, 60, and Los Angeles mortuary worker Jean Crump, 66, were arrested Wednesday on a federal grand jury indictment.

Prosecutors allege the women bought insurance policies, waited for them to mature, then held bogus burials or cremations and arranged for phony death certificates.

"The level of deception is shocking," said Anthony Montero, a special assistant to the U.S. Attorney in Los Angeles.

Montero said the "dead" were likely fictitious people, but said identities of real people may have been stolen.

Authorities allege that in one funeral at a Long Beach mortuary, the women loaded a casket with various items to simulate the weight of a corpse they called "Jim Davis." They purchased a plot in a Compton graveyard, had a funeral and had the casket buried.

Fearing the body-less coffin would be discovered in an investigation, the women then had the coffin exhumed and filed false paperwork with the county saying the remains had been cremated and scattered at sea, according to the indictment.

Allegations denied
Both women were released after posting $10,000 bail. They are scheduled to be arraigned April 23.

Reached Wednesday night by the Los Angeles Times, Schilling said, "That's a lie," in response to the indictment. "That's not my line of work, that's not something I do." She declined to comment further.

Phone numbers listed under Crump's name were disconnected, and an attorney could not be reached.

In addition to the life insurance claims, which included a $250,000 policy, prosecutors allege the women secured payments from financing companies to pay for inflated funeral costs.

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

Montero said two other women — Lydia Eileen Pearce, 37, owner of a mortuary in Long Beach, and Barbara Lynn, 54, a notary from Los Angeles — previously pleaded guilty in the alleged scam, said Montero. He said more arrests were likely.

Federal agents became involved after people approached to join the scam reported it to authorities, Montero said.

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