The Justice Department is investigating the mishandling of remains at Arlington National Cemetery in a broad criminal inquiry that is also seeking evidence of possible contracting fraud and falsification of records, people familiar with the investigation said Tuesday.

A federal grand jury in Alexandria has been subpoenaing witnesses and records relating to the scandal at the nation’s most venerated military burial ground, sources said. The investigation, conducted by the FBI and the Army’s Criminal Investigation Command, has been underway for at least six months, according to sources who spoke on the condition of anonymity because they were not authorized to speak publicly.

The Justice Department’s investigation significantly escalates the level of scrutiny faced by the cemetery, and the probe joins several ongoing inquiries by Congress, which last year passed a law mandating that the cemetery verify that remains are properly accounted for at every one of its 330,000 graves. The law also requires the Government Accountability Office to look into the cemetery’s contract management procedures, and whether the Army-run cemetery should be turned over to the Department of Veterans Affairs, which oversees 131 national cemeteries.

At a news conference at the cemetery Wednesday afternoon, Chris Grey, a spokesman for the Criminal Investigation Command, said that in addition to contracting fraud, investigators are looking into whether some grave sites were reserved against Army regulations. He also said the investigation is focused on a mass grave, discovered in October, that held eight sets of cremated remains.

In a report released last June, the Army inspector general found widespread problems at the cemetery: a dysfunctional management system, millions wasted on information technology contracts that produced useless results, misplaced and misidentified remains, and at least four cases in which crematory urns had been dug up and dumped in a dirt pile.

As a result, the cemetery’s top officials — Superintendent John C. Metzler Jr. and Deputy Superintendent Thurman Higginbotham — were forced out, though they remained eligible for full retirement benefits. The cemetery has been under new management for a year, but officials have continued to discover burial problems, including the mass grave.

Peter Carr, a spokesman for Neil H. MacBride, the U.S. attorney in Alexandria, declined to comment on the probe, as did an FBI spokeswoman. No charges are imminent, according to people familiar with the investigation, and it is unclear whether any will be filed.

Investigators are said to be seeking information about who knew about the cemetery’s burial problems and whether fraud or falsification of records was involved.

The Army inspector general’s report found that cemetery officials with virtually no contracting experience and little supervision improperly paid companies in a failed attempt to digitize the cemetery’s paper records. As a result, the cemetery for years used an antiquated paper record system that it is only now beginning to upgrade to computers.

Officials estimated that at least $8 million was wasted in the effort. At a Senate hearing last year, an Army procurement official testified that more than half of the 30 information technology contracts could not be located.

During that hearing, Higginbotham asserted his Fifth Amendment right against self-incrimination and refused to answer senators’ questions about his role in awarding the contracts. He has denied wrongdoing, and his attorney said recently that Higginbotham has not been contacted by federal investigators. Metzler also has denied wrongdoing.

The IG investigation found that the cemetery had “no acquisition strategy, no integrated IT system and a series of IT regulatory violations.” And the cemetery’s use of outside contractors had not been reviewed by outside Army officials for more than 10 years.

One contract was so flawed that a handwritten note attached to a legal review of it said, “This is probably not the best way to do business,” according to the IG. But the note said that the “contract is not illegal.”

Six of the early IT contracts at Arlington were awarded to a then-new Manassas company called Offise Solutions, the only company mentioned by name in the IG report. Between March 2004 and June 2005, the business, which had never previously won a government contract, was paid more than $700,000 by the cemetery, according to federal contracting records.

The company delivered approximately 60 CDs of scanned burial files, according to the Army’s report. But “these records were not delivered in a standardized format and were not stored as part of a database,” the report said.

Company officials have previously said they fulfilled all obligations, and they have denied wrongdoing. Company officials could not be reached Tuesday.

The company that obtained the most lucrative contracts for IT work was Alpha Technology Group of Waldorf, which was paid about $2.5 million from 2004 to 2007, according to federal records. Calls to the company were not returned.

Grey, the Criminal Investigation Command spokesman, said Wednesday that the practice of reserved grave sites is also part of the probe. The cemetery stopped formally taking reservations in 1962, but the practice of reserving choice grave sites continued, unofficially, under Raymond J. Costanzo, who was superintendent from 1972 to 1990, an Army investigation found. Metzler, his successor, who ran the cemetery until he was forced to retire last year, also apparently allowed people to pick areas of the cemetery where they wanted to be buried, Army officials have said.

The Army, which investigated the matter two decades ago, has a list from 1990 with “senior officials” who have plots that “were de facto reserved in violation of Army policy,” according to a memo obtained by The Post under the Freedom of Information Act. Some of those officials were driven around the cemetery by Costanzo, who told investigators that he had allowed them to pick their spots.

Previously, the Criminal Investigation Command had looked into allegations of a conflict of interest between Arlington personnel and a contractor. Investigators referred their findings to the U.S. Attorney’s Office, which declined to prosecute, citing lack of evidence. It also found that a cemetery employee’s e-mail account had been illegally accessed, but investigators could not determine by whom.

The cemetery, known for its perfectly aligned rows of white headstones, also has been plagued by a series of embarrassing revelations that several veterans and their family members were in the wrong graves. In one instance, officials found one grave site that was empty, another that had the wrong set of remains and a third that contained two sets of remains, only one of which belonged there. In October, cemetery officials, acting on a tip from an employee, discovered the mass grave of cremated remains.

Three of the eight sets of remains were identified, and so far two have been reburied, officials said. They are still working to identify one other. Four were certified as unidentifiable — and for the first time in decades, the cemetery will have to bury multiple sets of remains under a headstone that reads “Unknown.”

Staff writer Aaron C. Davis contributed to this report.