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Authorities make arrests in alleged stem cell scheme


This news story was published on January 4, 2012.
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By Molly Hennessy-Fiske, Los Angeles Times –

HOUSTON — Three men were arrested and a fourth was being sought by the FBI in connection with what investigators said was a $1.5 million, Texas-based scheme to illegally market and sell stem cell treatments to patients with terminal diseases.

“Protecting the public from unproven and potentially dangerous drug and medical procedures is very important,” Kenneth Magidson, U.S. Attorney for the Houston-based Southern District of Texas, said in a statement Tuesday. “This office will continue to prosecute violations involving threats to the public health.”

The men were arrested during the past 10 days, based on two November indictments charging all four with 39 counts of mail fraud and unlawfully manufacturing, distributing, and selling stem cells and stem cell procedures not approved by the Food and Drug Administration.

One of the four, Vincent Dammai, 40, of Mount Pleasant, S.C., was a researcher at the Medical University of South Carolina who created stem cells without obtaining permission from the FDA, according to the statement.

Francisco Morales, 52, of Brownsville, Texas, is charged with falsely saying that he was a medical doctor and operating an illicit clinic at his house in the border town, using stem cells to treat “incurable diseases” from 2007 into 2010, according to the federal indictment. Morales would allegedly take patients across the border into Mexico for stem cell treatments that had not been approved by the FDA, falsely claiming that he was involved in stem cell research at Duke, Harvard and UCLA, according to the indictment.

Also charged is Alberto Ramon, 48, of Del Rio, Texas, a licensed midwife who obtained umbilical cord blood to create stem cells from his patients at a local maternity clinic, according to the indictment. A warrant has been issued for the arrest of a fourth man, Lawrence Stowe, 58, of Fort Worth, Texas, in connection with the scheme, officials said.

The indictments charged that Stowe, who sometimes referred to himself as Dr. Larry Stowe, “marketed, promoted, and sold stem cells” for the treatment of several diseases through front companies, including Stowe Biotherapy Inc.

The indictments describe two cases in which patients, identified only as M.E. and M.M., paid Morales $10,000 and Stowe $47,000 for stem cell and vitamin treatments to cure multiple sclerosis, treatments that were not FDA approved.

Officials at the U.S. Attorney’s Office in Houston and the FBI’s field office in San Antonio declined to comment about how many individuals were allegedly defrauded by the stem cell scheme, or whether any of them were harmed by the treatments.

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