The owner of a biomedical supply house and three others were charged with selling body parts for use in transplants in a scheme a district attorney called “something out of a cheap horror movie.”

Prosecutors said Thursday the defendants made millions of dollars obtaining bodies from funeral parlors in three states and forging death certificates and organ donor consent forms to make it look as if the bones, skin, tendons, heart valves and other tissue were legally removed.

The indictment was the first set of charges to come out of a widening scandal involving scores of funeral homes and hundreds of bodies, including that of “Masterpiece Theatre” host Alistair Cooke, who died in 2004. The investigation has raised fears that some of the body parts could spread disease to transplant recipients.

“I think we can agree that the conduct uncovered in this case is among the most ghastly imaginable,” said Rose Gill Hearn, commissioner of the city Department of Investigation. “It was shockingly callous in its disregard for the sanctity of human remains.”

Michael Mastromarino, owner of Biomedical Tissue Services of Fort Lee, N.J., was charged along with Brooklyn funeral home owner Joseph Nicelli.

Mastromarino was an oral surgeon who went into the tissue business after losing his dentist license, prosecutors said. Nicelli was a partner in the business, they said. The other defendants were Lee Crucetta and Christopher Aldorasi.

All four pleaded not guilty to charges of enterprise corruption, body stealing and opening graves, unlawful dissection, forgery and other counts.

Prosecutors said the defendants took organs from people who had not given consent or were too old or too sick to donate. The defendants forged consent forms and altered the death certificates to indicate the victims had been younger and healthier, authorities said.

X-rays and photos of recently exhumed cadavers show that where leg bones should have been, someone had inserted white plastic pipes—the kind used for home plumbing projects, available at any hardware store. The pipes were crudely reconnected to hip and ankle bones with screws before the legs were sewn back up.

Brooklyn District Attorney Charles Hynes called it “something out of a cheap horror movie.”

Prosecutors said the body parts were sold to tissue suppliers and ultimately used in disk replacements, knee operations, dental implants and a variety of other surgical procedures performed by unsuspecting doctors across the United States and in Canada.

The bodies came from funeral homes in New York City, Rochester, Philadelphia and New Jersey that contracted with the Brooklyn funeral parlor for embalming. Prosecutors said more arrests were possible.

Nicelli was paid up to $1,000 per body to deliver corpses to a secret operating room at his funeral parlor, where Mastromarino would remove body parts, authorities said. Crucetta, a nurse, and Aldorasi allegedly helped Mastromarino.

Mastromarino made up to $7,000 a body by selling the tissue, authorities said, and the corpses were then returned to unsuspecting funeral directors for burial.

The scheme began to unravel in late 2004, when a detective responded to a report from the new owner of Nicelli’s funeral home that he allegedly cheated customers out of funeral deposits. The detective grew suspicious when she saw the hidden operating room, NYPD Commissioner Raymond Kelly said.

Mastromarino “vehemently denies doing anything illegal or wrong,” defense attorney Mario Gallucci said. Mastromarino contends he “was not responsible for interacting with the families of the deceased nor in obtaining the documentation needed to harvest the tissue.”

Earlier this month, the Food and Drug Administration closed Biomedical Tissue Services, saying it had evidence the company failed to screen for contaminated tissue. The agency warned that patients who received the company’s products could have been exposed to diseases, although the FDA insisted the risk was minimal