Fertility Doctor Tied to Scandal Is Indicted

Sergio C. Stone, one of three doctors implicated in a scandal at UC Irvine that rocked the infertility industry, was indicted Thursday on 10 counts of federal mail fraud alleging that he carried out an unlawful billing scheme against insurance companies.

Stone, 54, who was arrested at his Villa Park home and brought to U.S. District Court in handcuffs, is accused of filing false claims stating that he was assisted by other licensed physicians while performing medical procedures when he actually was working alone or with trainees.

The indictment--the first to be announced in the year-old fertility scandal at UC Irvine’s Center for Reproductive Health--targets the least well-known of the three physicians, and, some patients’ attorneys and university critics say, the least culpable. Stone is the only one of the three doctors still living in the United States. His two former partners, Drs. Ricardo H. Asch and Jose P. Balmaceda, left last year for Latin America.

The indictment, returned by a federal grand jury after months of investigation, makes no mention of human egg-stealing, the core issue in the scandal. UC Irvine officials have accused Stone, Asch and Balmaceda of stealing eggs and embryos from scores of women and implanting them in others, some of whom gave birth.

Attorneys involved in about 50 lawsuits against the three doctors speculated that the indictment was a strategic move by a federal task force to force Stone’s cooperation.

“I’ve seen it happen where they pick off lesser people and then ultimately hope to indict the true targets,” said Larry Feldman, an attorney representing five patients who have sued or filed claims against the university.

“I would imagine Dr. Stone knows an awful lot,” said Melanie Blum, another patients’ attorney.

Others said they would be dismayed if the federal action stopped with the Stone indictment.

“It’s a heck of an indirect way to address a problem where human beings were ripped off at a much more basic emotional level,” said state Sen. Tom Hayden, chairman of the Senate Select Committee on Higher Education, who has introduced a bill to make human egg-stealing a crime. “I would be disappointed if the federal government has no plans to go father, but fully expect it will bring more serious charges in weeks to come.”

Federal prosecutors were tight-lipped about their strategy, saying the investigation is ongoing. They said, however, that Stone’s indictment had been sealed for some time, raising the possibility that other indictments could be under seal as well.

“Dr. Stone . . . has been arrested and arraigned first,” Assistant U.S. Atty. Thomas Bienert said. “As to what else is going on, I can’t comment.”

Outside federal court Thursday in Santa Ana, Stone’s criminal attorney, Allan H. Stokke, said defense lawyers were still reviewing the indictment.

“The allegations involve insurance irregularities and has nothing to do with the egg and embryo investigation,” Stokke said. “It seems to be rather strange to start to focus on one thing and end up with” another.

The allegations cover a period between July 1991 and November 1993.

Stokke said Stone was never been called as a witness in the grand jury investigation.

Asked how his client felt about the charges, Stokke said: “I think his feeling is, he has done nothing wrong. He wants to remain here to clear his name.”

Stone’s civil attorney, Karen Taillon, has said the doctor did not regularly perform egg transfers. Asch, the former director of the fertility clinic, has said Stone “has zero responsibility” for any egg misappropriation.

Attorneys representing some of the 50 former patients who have sued the doctors and the university say no evidence has emerged thus far linking Stone to illicit egg transfers. The doctor has attended most of the depositions thus far in the cases, often chatting amiably with attorneys--even those suing him--in the hallways.

Asch left the country last fall after his home was searched by federal agents; he is working in Mexico. Balmaceda has returned to his native Chile to practice at a Santiago clinic.

In federal court Thursday, Stone clenched his jaw and propped his chin on his left hand as U.S. Magistrate Elgin Edwards told him about his rights to have an attorney at all stages of his defense.

Asked if he had an opportunity to review the 10-count indictment against him, Stone replied, “No, sir.”

A bail hearing was postponed until today. Arraignment is scheduled for Monday.

Each count carries a maximum of five years in prison and a $250,000 fine.