Doctor in UC Irvine Fertility Case Faces Mail Fraud Trial
In the court of public opinion, Dr. Sergio C. Stone is accused of playing God at UC Irvine’s Center for Reproductive Health.
Backed now by scores of civil lawsuits, exhaustive news coverage and even a television movie, UC Irvine officials charge that Stone and his two medical partners at the now-defunct UC Irvine fertility clinic stole human eggs and embryos and transplanted them into other women.
But today in U.S. District Court in Santa Ana, Stone begins trial for nothing remotely connected to those allegations of “Brave New World” medicine. Instead, in the first criminal trial stemming from the internationally publicized scandal, the 54-year-old Villa Park resident will defend himself against mail fraud--a crime some observers view as a legal technicality.
“Obviously, we appreciate the effort being made by the U.S. attorneys,” said Walter Koontz, a Newport Beach attorney representing seven clients who have filed fertility scandal-related lawsuits. “But the bottom line is that they are not touching on the core issues of the case. The victims are not the insurance companies, but the women who were used as human guinea pigs and human egg farms.”
After more than half a dozen investigations, some of which are still ongoing, all federal authorities could charge Stone and his partners--Ricardo H. Asch and Jose P. Balmaceda--with was devising a scheme to defraud insurance companies by overbilling for fertility procedures.
While tight-lipped about their trial strategy, prosecutors say they can prove that Stone falsely billed insurance companies from 1991 to 1995 by claiming he was assisted by other licensed physicians while fertility procedures were being performed.
Most of the alleged overcharging of insurance companies involved bills of about $1,500, according to court documents.
The trio, who have denied knowingly engaging in any wrongdoing, were indicted by a federal grand jury in Los Angeles last year on 35 counts of mail fraud.
Stone, an endocrinologist generally regarded as having little or nothing to do with the actual purported egg thefts, may be the only one of the three partners to ever stand trial.
Asch left the country almost two years ago, about the time that investigators raided his Newport Beach home and Santa Ana office. He is now living and practicing in Mexico City.
Likewise, Balmaceda left the United States and now practices in his native Chile. Neither Asch nor Balmaceda are likely to be extradited, according to legal experts.
Meanwhile, after posting a $3-million bond, Stone has remained under house arrest to face the federal charges. One of Stone’s two defense attorneys explained their client’s decision to remain in the United States this way.
“Dr. Stone is not the kind of person to run away from an accusation that is false,” said Irvine attorney William J. Kopeny of the Chilean native. “He made a moral decision that if this is where I live and this is where the problem has arisen, then this is where I will deal with it.”
As far as the egg theft allegations go, federal prosecutors say they are irrelevant to this trial. But authorities hasten to add that a federal investigation continues into the egg stealing allegations, and that additional charges against Stone and his partners could still be forthcoming.
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.
At least 80 patients may have been victimized at the clinics at UC Irvine and affiliates at UC San Diego and in Garden Grove, officials allege. More than 85 civil lawsuits have been filed against UC Irvine and the three doctors at the fertility clinic.
Nevertheless, a mail fraud conviction is nothing to take lightly, legal experts say. For Stone, a conviction could mean a penalty of up to five years in prison for each of the 35 counts and fines of up to $250,000 on each count.
A broad and flexible law, mail fraud is one of federal prosecutors’ most effective and common tools in combating white-collar crime, said UCLA law professor John Shepard Wiley Jr. Though unfamiliar with the case against Stone, Wiley said mail fraud is famous for helping authorities triumph in otherwise impossible cases.
But the defense team has vowed to beat the mail fraud case against Stone. The defense will argue that Stone did bill for medical procedures that he may not have performed or for others at which he may not have been present the entire time, Kopeny said. This practice, Kopeny contends, was acceptable and common at teaching institutions like UC Irvine--although subsequent university rules now call for stricter supervision.
Beyond that, legal experts say the prosecution also has the demanding burden of demonstrating that Stone not only committed the fraud but also knew he was doing it.
“The state of mind is always the big issue in a fraud case,” said Wiley. “And the problem is we have no window into the defendant’s mind.”
Though shot down during pretrial motions, the defense is also holding out some hope that Judge Gary L. Taylor will dismiss the case on grounds of selective prosecution. The defense claims that Stone’s billing practice was the same as other UC doctors, who have not been charged similarly.
“Nobody in the entire country has ever been singled out for criminal prosecution of this kind,” said Kopeny. “[Stone] stands accused simply because there’s political capital to be made. . . . People love to hate these doctors.”
But prosecutors counter that the defense strategy for dismissal has little chance of success.
“These people were indicted,” said Tom Bienert Jr., the federal government’s lead prosecutor.
Attorneys estimate that the trial will last about five to six weeks. Jury selection begins today, with opening arguments expected either late Wednesday or Thursday.
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