March 9, 2006  -- In the early morning of Nov. 21, 2005, New York City police officers exhumed a body from the Maple Grove Cemetery in Queens. What they found in the casket was horrifying -- the bones in the lower half of the body were gone -- replaced with plastic PVC pipe.

Brooklyn Assistant District Attorney Josh Hanshaft took the body to the medical examiner's office to confirm the results.

"The first thing they did was take an X-ray of the whole body and you know, I'm ... not being facetious, it looked like the underneath of a person's sink," Hanshaft said. "You had the elbow pipes, you had the leg pipes, you had screws that screwed the feet into the piping."

In what police say is one of the strangest cases they've ever seen, a New Jersey-based company called Biomedical Tissue Services is accused of illegally harvesting body parts from funeral homes across the city and selling them for big profits.

Physical and Spiritual Theft, Say Relatives

Authorities began their investigation when the new owner of the Daniel George funeral home in Brooklyn called the police to complain about the previous owner in an unrelated matter . In a visit to the funeral home, police found an upstairs room outfitted like a surgical suite.

Police say they also found cut-up cadavers, bones harvested, human hearts excised from chests -- all taken without permission of the deceased's families.

The police and district attorney say they had stumbled onto a renegade tissue procurement operation, catering to one of the most important and fastest-growing businesses in modern medicine -- supplying new tissue for transplants -- such as skin for burn victims, new heart valves for patients with faulty ones, and ligaments and tendons for sports injuries.

To procure tissue legally, permission is needed from the donor (for example, in a living will) or the donor's next of kin before a company can harvest body parts. Under those circumstances, replacing bone with PVC pipe would be fine.

But investigators believed they had found the first signs of a criminal enterprise that they say will ultimately be tied to dozens of funeral homes.

Authorities needed to determine how the ring was acquiring bodies. After contacting funeral homes and subpoenaing records, the district attorney's office finally hit pay dirt. They found a signature on a next-of-kin consent form had clearly been forged, say prosecutors.

"It was almost the perfect crime. Who was going to complain? Families didn't know it was happening. The people or the deceased who it was happening to, obviously could not speak," said First Deputy District Attorney Michael Vecchione.

Investigators had to ask families of the deceased if they had donated the bodies of their loved ones. "Some of them were just devastated," said an investigator. "Some of them were even taking the position of, 'Where was the other half of my mother or father? How can I get it back?'"

Members of the alleged operation even took tissue from Alistair Cooke, the host of "Masterpiece Theater," say authorities.

His daughter, Susan, said it wasn't just a material theft, but a spiritual one. "To the families of people whose loved ones have been stolen, it is a desecration not only to the body of their loved ones but to their grief," she said.

Body Parts Are Big Business

It was a crime of appalling dimensions, with 1,077 bodies harvested, say prosecutors.

"Of all of the cases I've been involved with, child abuse and -- and then bias attacks and the like, I mean this, this stands right at the top of the line for the debasement of humanity," said Brooklyn District Attorney Charles J. Hynes.

Investigators say Michael Mastromarino, a former dentist who lives in a multimillion-dollar home, is the man behind the operation.

Prosecutors say Mastromarino formed a tissue procurement company called Biomedical Tissue Services and started visiting scores of funeral directors all over the Northeast looking for bodies.

And some funeral directors signed up. Mastromarino was offering up to $1,000 a body -- and in turn selling them for $7,000. While it is technically illegal to sell a human body, fees to prepare, transport and process them are allowed.

Biomedical was considered one of the hottest procurement companies in the country, raking in close to $5 million. Tissue from Biotech was being snapped up by some of the biggest names in the tissue regeneration business.

Processing tissue for transplant is a billion-dollar business, said Annie Cheney, the author of the book, "Body Brokers." A single donation can be sold for as much as $100,000.

When the first warning came that something could be wrong, it would come too late for the hundreds of people who had already been harvested.

A doctor hired to check records for tissue processing company Life Cell had a small question about one of Mastromarino's forms. Every phone number he called on the forms was incorrect.

"I went through about 10 charts," said Dr. Michael Bauer. "That's when I was certain of only one thing. Those charts for those donors could not be trusted. And LifeCell needed to immediately quarantine whatever they had and issue a recall."

How Many Patients Affected?

The investigation eventually led police to Rochester, N.Y., where Mastromarino had had another office. Inside the office, they found a freezer with tissue in it, surgical tools and drawers and drawers of files.

Police say Mastromarino wasn't just forging the consent forms of next of kin. He was forging the vital medical records tissue banks rely on -- changing the age, the cause of death and more.

Prosecutors say when the cause of death, such as cancer, would have ruled out tissue donation, often it was changed.

"They were all changed to cardiac attack. Bladder cancer was coronary arrest. So they all changed to be mostly heart attacks," said Hanshaft.

The tissue companies all say they have proprietary washes that are supposed to kill any disease. And there was another built-in failsafe: Each tissue was supposed to come with a blood sample that would be tested for infectious disease.

But the FDA has now announced that at least in some cases, Biomedical sent blood that didn't come from the donor. The FDA had already announced a massive recall of tissue, and thousands of people all across the country have received letters warning that they should get tested for potentially fatal diseases, including HIV and hepatitis.

The FDA says it is aware that there have been media reports of potential disease transmission in recipients of tissue recovered by Biomedical Tissue Services and is investigating.

There is no way to tell how many transplant patients could be affected. A single body can supply tissue to 50 or more patients. In this case, that's more than 50,000 possibly tainted tissue grafts, and no one knows exactly how many have already been implanted in healthy patients.

On Feb. 23, the Brooklyn district attorney indicted Mastromarino and three others in the operation. They are charged with 122 felony counts, including forgery and bodysnatching. Each of them has pleaded not guilty.

Days before the indictment, "Primetime" sat down for an exclusive interview Mastromarino, who denied he had done anything illegal. He says he believed consents had been obtained by the funeral directors.

"Who better than the funeral director to talk to the family, because they're already talking to the family about the arrangements?" Mastromarino said.

Assistant District Attorney Josh Hanshaft said he has no doubt Mastromarino knew the consent forms weren't legitimate. "You can look at the documents, and his name's on every, single document, in hundreds of places," Hanshaft said.

In the end, a jury will decide Mastromarino's fate. But what about the big tissue companies that accepted those documents and phony medical records for several years?

"It seems to me that if you continuously receive from a fellow like Mastromarino, bones and tissue with either the same or very similar causes of death...time and time and time again, that that has to raise some sort of red flag," said First Deputy District Attorney Michael Vecchione.

And Hanshaft said those companies complied by the regulations that are required of them. "We can say you know, 'Well, shouldn't they have looked into it a little further? Shouldn't they have done more here and more there?'" he said. "And it's everybody's opinion. It's individual."