October 12, 2011: Las Vegas Pediatrician Charged with Fraud in Stem Cell Case
Food and Drug Administration
Office of Criminal Investigations
U.S. Department of Justice Press Release
For Immediate Release
October 12, 2011
United States Attorney
District of Nevada
Contact: Natalie Collins
LAS VEGAS - A local pediatrician has been charged with participating in a scheme to defraud investors and chronically ill patients of large amounts of money through the use of experimental stem cell implant procedures that were not approved by the FDA and would not benefit the patients, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Ralph M. Conti, M.D, 50, of Henderson, is charged in a superseding indictment with conspiracy to commit mail fraud and wire fraud, eight counts of mail fraud, 15 counts of wire fraud, and criminal forfeiture. Also named in the superseding indictment and previously indicted, is Alfred T. Sapse, 85, of Las Vegas.
According to the superseding indictment, from about January 2005 to current, Sapse, who purports to be a retired foreign physician but who has never been licensed to practice medicine in Nevada or any other state, convinced chronically ill patients to undergo experimental implant procedures and convinced investors to pay him large amounts of money without knowing the short- or long-term effects of the implant procedures he promoted. The procedures involved the implantation of portions of placental tissue into the abdomen of the patients for the treatment of their diseases. Sapse allegedly targeted extremely sick patients, by claiming that his "proprietary" procedure was especially effective for patients with multiple sclerosis, cerebral palsy and retinitis pigmentosa (a disease of the retina which can cause blindness.)
In the fall of 2005, Sapse hired Conti, a pediatrician in Henderson who had no prior stem cell training, to perform the procedures. At Sapse's direction, between approximately February 2006 and November 2006, Conti allegedly performed the implant procedure on approximately 34 patients in Las Vegas, knowing that it would not benefit the patients. In November 2006, procedures performed by Dr. Conti allegedly resulted in the infection of several patients. In November 2006, the FDA sent Sapse and Conti a warning letter explaining that their procedure violated federal law, but after that date Conti performed at least one more implant and Sapse coordinated the implantation of a least two more patients.
In order to convince patients to undergo the procedures, Sapse falsely claimed that he studied at the Filatov Institute of Eye Diseases and Tissue Therapy, a prestigious clinic in Odessa, Ukraine. Sapse also created a corporation in Nevada to give the impression that he operated a pharmaceutical company, and he used websites and press releases to advertise to patients and investors that he had developed a novel medical procedure involving stem cells that would cure or ameliorate severe, incurable diseases such as multiple sclerosis and cerebral palsy.
Sapse allegedly made a number of misrepresentations to prospective patients and investors, including that the placental tissue used in the procedures was obtained only from Caesarian section births, so as to reduce the risk of passing infection, or otherwise to prevent "damage" to the placenta; that he had achieved "considerable success" with a procedure that was going to "revolutionize medicine as it is known today"; that wheelchair bound patients would "definitely walk again"; and that he subjected the placental tissue he obtained to a "proprietary process," such that the stem cells in that tissue would express a special enzyme that would cause the stem cells to replicate indefinitely.
Sapse also allegedly failed to obtain any approvals from the FDA, as he knew he was required to do, prior to coordinating the implantation of placental cells in patients by Conti. Sapse and Conti made false representations to FDA regulatory investigators regarding their involvement in the scheme, conducted no meaningful follow-up with the patients who underwent the implant procedures, and concealed from patients and prospective patients the adverse effects suffered by previous patients.
In about February 2007, Sapse relocated his fraudulent scheme to Mexico and entered into an arrangement with a Mexican physician ("Physician G") with an office in Nuevo Progresso, Mexico, to perform his implant procedure. At Sapse's direction, Physician G performed the implant procedure on approximately 100 patients between approximately February 2007 and May 2010 in Mexico.
Sapse allegedly received approximately $1 million from patients and investors, approximately $700,000 of which he spent on personal expenditures and for gambling at local casinos. Sapse did not use any of the money for laboratory research, animal studies or human clinical studies relating to the short- and long-term effects of the implant procedure he was promoting.
If convicted, both men face up to five years in prison on the conspiracy charge, up to 20 years in prison on each fraud charge, up to a $250,000 fine on each charge, and forfeiture of money or property up to $913,748. Dr. Conti is scheduled for an arraignment on Thursday, October 13, 2011, at 3:00 p.m. before U.S. Magistrate Judge Carl W. Hoffman.
This case is being investigated by the FDA Office of Criminal Investigations and prosecuted by Assistant U.S. Attorneys Crane M. Pomerantz and Patrick M. Walsh.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.