Fertility Doctors Owe UCI, Auditor Finds

The three UC Irvine doctors who allegedly stole eggs harvested from women undergoing fertility treatments owe the university $2.47 million, mostly from unreported revenue, according to a state audit.

The report released Wednesday concludes that the three once-acclaimed fertility experts, Ricardo Asch, Jose Balmaceda and Sergio Stone, failed to report $7.83 million in revenue from their partnership with the university from 1992 to 1994. The university’s share of that is $1.47 million plus $782,000 interest, the auditor found.

In addition, the doctors owe $216,000 on revenue they did report to UCI, but which the university failed to collect.

Auditor Kurt Sjoberg blamed not just the doctors, whom he said “cheated” the university of money, but the university itself.

“The findings highlight the rather lax administration that existed at UCI with respect to its agreements with physicians who work at the university, so lax that literally millions of dollars are owed to the university by just these three physicians,” Sjoberg said in an interview Wednesday.

“The university needed to have greater accountability and an assurance that the state was receiving the fees that it deserves under its agreements with its physicians.”

Until 1995, the university’s contract with its doctors, called the Clinical Compensation Plan, worked on an honor system. Doctors would report their incomes to UCI. Based on the reports, the doctors would pay UCI a percentage.

In 1995, UCI and the other four University of California campuses with medical schools revised the compensation plan to require that clinic revenue be deposited in bank accounts maintained by the university. Assessments now are deducted by the university and the remainder paid to physicians as salary.

Sjoberg said he has not looked into whether the changes in the university’s collection system are adequate. But he called the revised plan “a positive step.”

UCI officials said they hope the report will make it easier for the university to collect at least part of the money the physicians owe. They said they plan to sue the three doctors for the funds in the next few months.

“It’s an important determination by the state auditor, and it’s quite helpful to the university,” said John Lundberg, UC counsel. Lundberg said UCI officials had long suspected the doctors concealed much of the money they took in, but did not have the power to subpoena records to prove their hunch.

“What we need to do now, and certainly what we will do, is pursue this matter against all three of the doctors.”

Lloyd Charton, attorney for Asch, called the report “poppycock, pure, unadulterated poppycock.”

“This spurious audit is just one more unsavory attempt [by university officials] to shield themselves from the responsibility that they personally bear for outrageous, incompetent management techniques which resulted in tremendous suffering,” Charton said.

“Instead of taking responsibility, they threw my client and others to the wolves.”