The former head of UCLA's cadaver program and a businessman were indicted Friday on eight felony counts involving black market sales of donated human body parts in a scheme that allegedly cheated the university out of more than $1 million.

Henry Reid, the former director of UCLA's willed body program, allegedly sold body parts to businessman Ernest Nelson, who then resold them to medical, pharmaceutical and hospital research companies.

"As a result, Ernest Nelson was able to supply over 20 of his clients with hundreds of body parts and received over $1 million for the supplied body parts," according to the indictment.

Reid, 58, of Anaheim, and Nelson, 50, of Rancho Cucamonga pleaded not guilty in Los Angeles County Superior Court to single counts of conspiracy to commit a crime, grand theft and grand theft of personal property.

The charges were similar to those brought more than a year ago, but the indictments allowed prosecutors to avoid a preliminary hearing scheduled Friday.

Both men were released on their own recognizance pending a May 30 bail hearing. Defense attorneys said they expected to prevail at trial.

The illegal sales ran from 1999 until 2004 with Reid using his position to cover up the scheme, authorities said.

During that time, Nelson, who owned the Empire Anatomical Company, wrote several checks to Reid ranging from $5,000 to $9,000 for body parts. Reid deposited them into his personal bank account.

Nelson also pleaded not guilty to four counts of filing false income tax returns and one count of failing to file an income tax return.

Deputy District Attorney Marisa Zarate said prosecutors decided to go to the grand jury after defense attorneys delayed the case with more than a year of postponements. The D.A.'s office originally brought charges against the men in March 2007.

"This case is a significant matter to many people and it's very serious and it has been continued to the detriment of many witnesses for over a year," she said.

The move eliminated the requirement for a preliminary hearing, at which a judge would have determined whether there was sufficient evidence to proceed to trial after hearing testimony by both sides.

"The D.A. took the chicken way out by not having a preliminary hearing and going to the grand jury," Reid's attorney, Melvyn Sacks, said outside court. "You can get a grand jury to do anything."

Reid has already posted bail of $500,000 and Nelson posted $350,000. Their attorneys said they would argue May 30 that those amounts remain in place.

The case will likely go to trial 90 days after the bail hearing, Superior Court Judge Peter Espinoza said.