Despite Tanzler's best efforts, Hoyos died of tuberculosis at her parents' home in Key West on October 25, 1931. Tanzler paid for her funeral, and with the permission of her family he then commissioned the construction of an above ground mausoleum in the Key West Cemetery, which he visited almost every night.
One evening in April 1933, Tanzler crept through the cemetery where Hoyos was buried and removed her body from the mausoleum, carting it through the cemetery after dark on a toy wagon, and transporting it to his home. He reportedly said that Hoyos’ spirit would come to him when he would sit by her grave and serenade her corpse with a favorite Spanish song. He also said that she would often tell him to take her from the grave.
Tanzler attached the corpse's bones together with wire and coat hangers, and fitted the face with glass eyes. As the skin of the corpse decomposed, Tanzler replaced it with silk cloth soaked in wax and plaster of paris. As the hair fell out of the decomposing scalp, Tanzler fashioned a wig from Hoyos' hair that had been collected by her mother and given to Tanzler not long after her burial in 1931. Tanzler filled the corpse's abdominal and chest cavity with rags to keep the original form, dressed Hoyos' remains in stockings, jewelry, and gloves, and kept the body in his bed. Tanzler also used copious amounts of perfume, disinfectants, and preserving agents, to mask the odor and forestall the effects of the corpse's decomposition.
In October 1940, Hoyos' sister Florinda heard rumors of Tanzler sleeping with the disinterred body of her sister, and confronted Tanzler at his home, where Hoyos' body was eventually discovered (he was also caught dancing with her corpse in front of an open window). Florinda notified the authorities, and Tanzler was arrested and detained. Tanzler was psychiatrically examined, and found mentally competent to stand trial on the charge of "wantonly and maliciously destroying a grave and removing a body without authorization." After a preliminary hearing on October 9, 1940 at the Monroe County Courthouse in Key West, Tanzler was held to answer on the charge, but the case was eventually dropped and he was released, as the statute of limitations for the crime had expired.
Shortly after the corpse's discovery by authorities, Hoyos' body was examined by physicians and pathologists, and put on public display at the Dean-Lopez Funeral Home, where it was viewed by as many as 6,800 people. Hoyos' body was eventually returned to the Key West Cemetery where the remains were buried in an unmarked grave, in a secret location, to prevent further tampering.
The facts underlying the case and the preliminary hearing drew much interest from the media at the time (most notably, from the Key West Citizen and Miami Herald), and created a sensation among the public, both regionally and nationwide. The public mood was generally sympathetic to Tanzler, whom many viewed as an eccentric "romantic".
Though not reported contemporaneously, research (most notably by authors Harrison and Swicegood) has revealed evidence of Tanzler's necrophilia with Hoyos' corpse. Two physicians (Dr. DePoo and Dr. Foraker) who attended the 1940 autopsy of Hoyos' remains recalled in 1972 that a paper tube had been inserted in the vaginal area of the corpse that allowed for intercourse. Others contend that since no evidence of necrophilia was presented at the 1940 preliminary hearing, and because the physicians' "proof" surfaced in 1972, over 30 years after the case had been dismissed, the necrophilia allegation is questionable. While no existing contemporary photographs of the autopsy or photographs taken at the public display show a tube, the necrophilia claim was repeated by the HBO Autopsy program in 1999.