NYPD investigators who responded to a 911 call on Wednesday found that the home had rented four trucks to hold almost 60 corpses, an official said.
Comments made to CNN by another NYPD official claim that fluids were also reported dripping from the trucks parked outside The Andrew Cleckley Funeral Home in Brooklyn.
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Faced with the current coronavirus outbreak, the home appeared to have run out of room for bodies, which were awaiting cremation, and used the trucks for storage.
One law enforcement source told CNN that at least one of the four trucks was not refrigerated, with bodies instead put on ice.
The Andrew Cleckley Funeral Home in Brooklyn was cited for failing to control the odours, but no criminal charges were brought.
City and state officials sent a larger refrigerated truck that afternoon. Workers then filled the new truck with bodies from the other trucks using protective gear.
Funeral homes across New York City have struggled since the pandemic began, with the city setting up temporary morgues and hospitals which have used refrigerated trailers to transport bodies.
Crematoriums have meanwhile been backed up, and funeral directors across the city have pleaded for help as they have run out of space.
"Funeral directors are required to store decedents awaiting burial or other final disposition in appropriate conditions and to follow their routine infection prevention and control precautions," said the state health department regarding the incident on Wednesday.
The NYPD notified the state Department of Health, which oversees funeral homes, about the situation at the Andrew T Cleckley Funeral Home.
Brooklyn Borough president Eric Adams told the Daily News on Wednesday evening: "While this situation is under investigation, we should not have what we have right now, with trucks lining the streets filled with bodies.
"It was people who walked by who saw some leakage and detected an odour coming from a truck."