Stone Part of a Fraud ‘Conspiracy,’ Jury Is Told

Federal prosecutors charged Tuesday that Dr. Sergio Stone and his two partners at UC Irvine’s Center for Reproductive Health were “partners in crime” who lied on medical documents to dupe insurance companies and reap extra profits.

But Stone’s defense attorney told a U.S. District Court jury that “the wrong person is on trial” and insisted that his client has broken no laws.

The opening statements in Stone’s trial for alleged mail fraud and income tax evasion provided a preview of what is to come in a case that marks the first time one of the three partners blamed for the UCI fertility scandal has been brought to trial.

Stone’s former partners, Ricardo H. Asch and Jose P. Balmaceda, fled the country shortly after the scandal broke in the fall of 1994, eventually shutting down the university’s Center for Reproductive Health.

But the trial is not about the controversy involving human reproductive eggs and embryos that were stolen and then transplanted into other women or shipped to medical research laboratories.

Instead, it focuses on the center’s financial dealings.

Stone and his partners were each indicted on 23 federal charges, including 20 counts of mail fraud, two counts of filing false income tax returns and one count of conspiracy to commit tax fraud.

Lead prosecutor Thomas Bienert Jr. on Tuesday used poster-sized reproductions of insurance forms and medical documents to outline the government’s case.

“These documents will prove to you Dr. Stone and his partners engaged in tax fraud,” Bienert said. “We have a scheme and we have a conspiracy.”

Bienert alleges that Stone, Asch and Balmaceda took in more than $250,000 in additional income that was not declared on their tax forms.

Bienert also charged that the doctors routinely used unlicensed personnel, including students, to help perform medical procedures and then billed the insurance company as if they had performed the work themselves.

He said that Balmaceda, for example, was listed as an assistant during one procedure when records show he was performing surgery at the same time at another facility.

The prosecutor also told jurors that the doctors would lie to the insurance companies about what types of procedures they were performing because some--such as artificial insemination and embryo transfers--were not covered.

Norbert Giltner, a former nurse at the center, was the prosecution’s first witness.

He said he had heard all three doctors give instruction to staff to not write “infertility” on certain documents and that Asch once explained it was because “we don’t get paid.”

Defense attorney John D. Barnett dismissed the contention that Stone was out to make money from the insurers.

He said that of the nine cases in which his client is alleged to have falsified documents, only $1,344 was paid by insurers.

“Dr. Stone didn’t throw his career away for $1,344 over three years,” Barnett said.

Barnett also said that for every medical procedure involving his client, an assistant surgeon was present. He also told jurors that Stone believed his income tax records were accurate when he signed the documents.

“There’s no crime,” the defense attorney insisted.

Barnett charged that the government’s case was put together with the help of a witness who falsely implicated Stone in order to avoid prosecution herself.

The trial is expected to last about six weeks and is separate from the civil cases filed by couples who allege they were victimized by the doctors.

“When this case is over with, all the lights will be on.” Bienert said. “You’ll see Stone for what he is: Someone who constantly and purposely schemed to get as much money as he could put in his pockets.”

* MORE EGG CASES SETTLED: An O.C. judge has approved $4.4 million to settle 21 of the claims against UCI clinic. B4