Issue #9 · September 1, 2026
Seven Minutes in Chicago; a $16 Million Lawsuit Over the Wrong Body; Death Claims on the Living; Greiner Points to a January 2027 Jury Trial
City records show Chicago closed a license inquiry into South Chicago Chapel in seven minutes without referring it to state funeral regulators, nearly a year before 56 decomposing bodies were found. A $16 million lawsuit accuses R.G. Ortiz of cremating the wrong man, Tennessee suspended a funeral home over death claims filed on the living, and Gary Greiner's criminal case now points to a January 2027 jury trial.
By Heidi Macomber, Founder, Obitley
The alderman's office called twice in September 2025. The city closed the inquiry in seven minutes and never called the state.
On August 6, 2026, authorities found 56 decomposing bodies at South Chicago Chapel, the day after Illinois regulators suspended Johanna Morgan's license. City records obtained by Illinois Answers Project and Capitol News Illinois show the warnings started nearly a year earlier. The office of Ald. Peter Chico (10th Ward) complained to the city twice within one week in September 2025, after staff learned that the couple operating the chapel, Clark and Johanna Morgan, had run Heights Crematory, the facility the state shut down in 2025 over about 100 improperly stored bodies.
The first complaint came September 17, 2025, when Chico's office submitted a 311 complaint alleging "open burning" at the chapel at 2939 E. 95th St. The system logged it as an air pollution odor or dust complaint. Two days later, a Chicago Department of Environment inspector visited the property. He spent 20 minutes on the scene and took a few photos, including one of an empty gurney in the parking lot. A resident told him the smell came from someone burning his trash can. The inspector dismissed the complaint. His narrative ran 67 words and gave no indication he tried to go inside.
The second complaint became a license inquiry that the Chicago Department of Business Affairs and Consumer Protection marked "Completed" after seven minutes, on September 26, 2025. The city never referred Chico's concern to the Illinois Department of Financial and Professional Regulation, the state agency that licenses funeral directors. Asked whether the city should have made that referral, a BACP spokesperson said: "when the alderman reached out to BACP, we responded."
Illinois Answers Project and Capitol News Illinois obtained the previously unreported records and reported them August 27, 2026, in a collaboration by Casey Toner and Maggie Dougherty. WTTW republished the story the same day. Obitley's own records requests with Illinois regulators remain unresolved: three requests since July 17 have produced zero records, and a request on preneed trust oversight is now before the Attorney General's Public Access Bureau.
Source: Obitley review of city records reporting, August 28, 2026. Illinois Answers Project and Capitol News Illinois records reporting by Casey Toner and Maggie Dougherty, August 27, 2026. Chicago BACP statements. Chicago 311 service request records.
Consumer Protection
A stranger in the coffin: $16 million lawsuit says R.G. Ortiz cremated the wrong Jose Diaz
On May 28, 2026, a family arrived at R.G. Ortiz Funeral Home in Washington Heights for a wake. The man in the coffin was not their father. He had hair; their father was bald. He was much taller than the 5-foot-3 Jose Daniel Diaz Felipe, 84, and his complexion was different. The stranger was dressed in their father's clothes. The family spent four hours trying to persuade staff a mistake had been made, and removed the deceased man's shoes to prove it: Diaz Felipe had lost a toe to diabetes.
What the family learned later, according to the lawsuit, is that their father had already been cremated on May 23, five days before the scheduled wake. The complaint says the funeral home admitted the mistake after the service, telling the family it had two deceased men named "Jose Diaz" at the same time and mixed up the bodies. The summons and verified complaint were filed August 19, 2026, in Bronx County under index number 816374/2026E, demanding $16,396,000 in damages.
The operator was known to city regulators. R.G. Ortiz settled with the New York City Department of Consumer and Worker Protection in 2024 for more than $700,000 over 82 charged violations: $604,000 in restitution and $100,000 in civil penalties. The firm has drawn 74 consumer complaints since 2018 and operates eight locations across the Bronx and Manhattan.
Fraud
The money nobody watched: two funeral fraud cases ran through guardianship programs
When a court decides a person cannot manage their own affairs, a guardian takes over the decisions, including the funeral. Two criminal cases from 2026, one resolved and one pending, show how little checking happens between the payment and the grave. In Michigan, Terry Alvin Kaufman collected prepaid funeral funds through the Huron County Public Guardian, the county office that manages money for people a judge has found cannot manage it themselves. Attorney General Dana Nessel's office said none of it was escrowed, and that over ten years Kaufman used it to pay his own salary.
Kaufman pleaded no contest in March 2026. In May, Judge Gerald M. Prill sentenced him to 7 to 20 years and ordered $1,111,165.77 in restitution to 204 identified victims. Some of those victims were wards of the state whose arrangements were handled through the guardian office. The office created to protect them became the channel he collected through.
In Tennessee, Mundy Funeral Home in Jamestown is accused in a different kind of theft: filing death claims with an insurer for people who were still alive, including individuals in a guardianship program. The board's legal representative said the fraudulent preneed claims exceeded $80,000, including approximately $17,840 tied to the guardianship program. No charges have been filed.
Regulatory
It unraveled when a living customer moved a preneed policy: inside Tennessee's suspension of Mundy Funeral Home
On August 11, 2026, the Tennessee Board of Funeral Directors and Embalmers summarily suspended the license of Mundy Funeral Home in Jamestown and the funeral director license of Chad Mundy. The board's legal representatives said the emergency action was needed "to protect the public's health, safety and welfare." A summary suspension takes effect before complaints are resolved: under it, Mundy cannot work as a funeral director and the funeral home cannot operate.
The case began with a July 22 audit of the funeral home's preneed records covering January 1, 2025 through June 30, 2026. The audit found three case files with no death certificate, 13 with no payment records from the insurance company, and 15 contracts with no documentation at all. Because the records were missing, an auditor asked Homesteaders Life Company, the insurer backing the preneed policies, for its payment documents. Those documents showed at least five policies with confirmed proof the claimed person was still alive. One claim was filed for Mundy's own wife, whom Homesteaders confirmed is alive.
Investigators believe approximately a dozen or more fraudulent death claims were filed, exceeding $80,000 in total: roughly $70,000 in fraudulent funds found by Homesteaders and about $17,840 tied to individuals in a guardianship program. No civil or criminal case had been filed as of August 26. The Tennessee Bureau of Investigation is involved.
Consolidation
Four days out: Selected's merger vote moves to Louisville
Selected Independent Funeral Homes opens its Annual Meeting in Louisville, Kentucky, with the association's future unresolved. Members gather September 2 through 5 at the Omni Louisville, and member voting on the proposed combination with the National Funeral Directors Association will follow later this year, before any official agreement is signed. The boards announced the deal July 29 and have promoted it under the "Better Together" banner. NFDA's own FAQ states the structure in plainer terms: the transaction "would be structured as an acquisition of Selected Independent Funeral Homes by NFDA." If members approve, Selected would operate as a "designation" inside NFDA beginning in 2028, after a 2027 transition year.
The campaign has gone public, and the engagement numbers tell their own story. On August 21, trade publication Connecting Directors posted to Facebook about the two members leading opposition. As of August 29 it had drawn 35 reactions, 9 comments and 1 share. An earlier post that day linking the publication's interview with Selected President Barbara Risher Welch drew 14 reactions. Commenters on the opposition post identified themselves as committed no votes, and one reply described member firms across six states acting together.
Nathanael M. Billow and Paul C. St. Pierre, the sixth-generation members leading the opposition, repeat their central objection: members face a vote on a letter of intent that legal counsel for both organizations says is confidential and cannot be shared with them. Their poll of 70 firms found 85 percent lean no. A members-only town hall is scheduled for September 3.
Courts
Reason listed only as "Other": Greiner's first hearing canceled, and the case points to a January 2027 jury trial
The initial hearing in the criminal case against Gary G. Greiner, set for September 1 at 9:00 a.m. in Vigo Superior Court 1, was canceled on the court's own calendar on August 31, with the reason listed only as "Other." Judge Charles D. Johnson signed an order the same day setting the case for a further-proceedings hearing November 19, a final pretrial conference January 14, and a jury trial January 25, 2027.
The 37 counts, filed August 20 under Cause No. 84D01-2608-F5-003955, enumerate one count of corrupt business influence, a Level 5 felony; 21 counts of theft, each a Level 6 felony; and 15 counts of fraud on a financial institution, each a Level 5 felony. They rest on more than $552,000 in prepaid funeral payments, by the account of Vigo County Prosecutor Terry Modesitt. The docket moved fast in five days: August 27, Johnson set the initial hearing; August 28, defense counsel Michael Thomas Ellis filed a waiver of formal arraignment; August 31, the trial-setting order and the cancellation, the same day.
The counts span July 2014 to April 2025, and that span matters: it decides whether Indiana caps the available prison time at seven years or fourteen.
On the Horizon
Stories and projects in development
- ›November 19, Terre Haute: further-proceedings hearing in the Greiner case, followed by a final pretrial conference January 14 and a jury trial set for January 25, 2027.
- ›September 2-5, Louisville: Selected's Annual Meeting at the Omni Louisville, with a members-only town hall September 3. Member voting on the NFDA deal follows later this year.
- ›October 13, Chicago: first hearing in the proposed class action over South Chicago Chapel in Cook County Circuit Court. The suit counts 57 bodies.
- ›Tennessee: the TBI investigation into Mundy Funeral Home continues. No civil or criminal charges had been filed as of August 26.
- ›Sentencing pending: Gregory Stefan Jr. pleaded guilty to federal wire fraud in June 2026. A sentencing date has not been set. He faces up to 152 years in prison.
- ›November 10, Wheeling, West Virginia: Jeffrey Phares is sentenced for wire fraud after a March guilty plea. Court documents identify 225 victims owed more than $600,000 for grave markers never delivered.
- ›September 17, Tampa: a formal report on options for land adjacent to Marti-Colon Cemetery, where a 2024 radar study identified 16 subsurface anomalies.
- ›September 8: preneed trust records determinations due from California and Kansas. Washington, Louisiana, Kentucky and Connecticut received resubmitted requests August 25 after the originals bounced.
- ›Illinois records: Obitley's three requests since July 17 have produced zero records. The preneed trust oversight request is now before the Attorney General's Public Access Bureau.
By the Numbers
Time Chicago's BACP spent on a September 26, 2025 license inquiry about South Chicago Chapel before marking it "Completed" without referring it to state funeral regulators
Length of the narrative written by a Chicago Environment Department inspector who spent 20 minutes at the chapel on September 19, 2025
Damages demanded in the Bronx County lawsuit against R.G. Ortiz Funeral Home over the cremation of the wrong Jose Diaz
Violations New York City regulators charged R.G. Ortiz with in the 2024 enforcement action that ended in $604,000 restitution and $100,000 in penalties
Consumer complaints filed against R.G. Ortiz with the city's consumer protection agency since 2018
Fraudulent death claims investigators believe Mundy Funeral Home filed against living policyholders in Tennessee
Total fraudulent preneed claims in the Mundy case, including about $17,840 tied to a guardianship program
Victims in the Kaufman Michigan case, sentenced in May to 7 to 20 years with $1,111,165.77 in restitution
Jury trial date set in the Gary Greiner case after the September 1 initial hearing was canceled
Share of 70 Selected firms polled by Billow and St. Pierre that lean against the NFDA deal, one week before Louisville
From Obitley This Week
6 new investigations published on obitley.com:
SEVEN MINUTES
Chicago marked its South Chicago Chapel license inquiry "Completed" and never referred it to Illinois funeral regulators
THE STRANGER IN THE COFFIN
A $16 million lawsuit says R.G. Ortiz cremated the wrong Jose Diaz and dressed another man's body for the wake
DEATH CLAIMS ON THE LIVING
Tennessee suspends Mundy Funeral Home after claims filed on living policyholders, including the director's own wife
THE MONEY NOBODY WATCHED
Two funeral fraud cases targeted guardianship programs and the people they protect
FOUR DAYS OUT
Selected's merger vote moves to Louisville with dueling head counts and a letter of intent members cannot read
REASON "OTHER"
Greiner's first hearing was canceled the day before it was set; a January 25, 2027 jury trial now carries the case
The Weekly Deathcare Briefing is published every Tuesday by Obitley. If you have a tip, story idea, or correction, reply to this email.
Founder, Obitley · obitley.com
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