Fertility Doctor Avoids Jail Term

Dr. Sergio C. Stone, convicted of insurance fraud in connection with UC Irvine’s fertility scandal, was spared jail time and sentenced Monday to three years of probation.

Stone, 56, must serve one year through a home-detention program. He also agreed to pay $50,000 in fines and more than $14,000 in restitution.

“The sentence in this case has nothing to do with the eggs scandal,” U.S. District Court Judge Gary L. Taylor said, referring to the national scandal in which eggs were taken from women undergoing fertility treatment, then implanted in other women without the donors’ permission.

“The government has shown no evidence to tie Dr. Stone to the eggs scandal,” Taylor said. “The sentence is simply for the offense of insurance fraud.”

In a move that surprised even the judge, the defense agreed to pay a higher fine than what the court’s guidelines recommend. William Kopeny, one of Stone’s attorneys, said his client agreed to pay the extra money in return for a more lenient sentence due to Stone’s deteriorating medical condition and the nonviolent nature of the crime. Kopeny would not give details of Stone’s medical condition.

The insurance companies lost less than $3,000, the defense said.

“In some sense, this overstates the seriousness of the offense. . . . This is different from the run-of-the-mill insurance fraud case,” Kopeny said.

Stone, who has been free on a $3-million bond, appeared pale and gaunt. He showed no emotion as he listened to his sentence, but he managed a smile afterward for a phalanx of photographers and reporters awaiting him outside the U.S. District Court in Santa Ana.

“I’m pleased that the judge, in his wisdom, saw the true nature of my actions,” Stone said. “I cannot be happy . . . in my professional life, but at least I have the consolation that the judge saw through the rhetoric to the true nature of the crime.”

Stone, who was convicted in October, had faced up to 63 months in jail. Prosecutors had asked for six months in jail and six months of home confinement in an agreement in which Stone promised not to appeal the case.

“He had participated in a fraudulent scheme,” said Assistant U.S. Atty. Wayne Gross, who helped prosecute the case. “He didn’t do that for the patients. . . . The one and only reason was to get money that he and his partners were not entitled to.”

UCI officials have accused Stone, along with Drs. Ricardo H. Asch and Jose P. Balmaceda, of stealing eggs and embryos from at least 70 patients at the university’s now-defunct Center for Reproductive Health and transplanting them into other women or shipping them to other medical laboratories without the donors’ permission.

Some of the eggs and embryos have produced children, devastating the families involved and resulting in scores of lawsuits, most of which have been settled at a cost of at least $20 million so far.

When the scandal broke in 1994, prosecutors could not press charges against the doctors in connection with the egg-swapping scheme because no law prohibited the practice. Instead, they charged Stone with mail fraud, income tax evasion and insurance fraud. Similar charges have been filed against Asch and Balmaceda, both of whom have left the country. The clinic closed in 1995.

The insurance fraud charges involved reports written by Stone suggesting that there were both a surgeon and an assistant surgeon present during surgery, while records from the operating room indicated only one surgeon was present. Other documents showed that Stone was trying to charge the insurance companies for work done by medical residents and others by stating that the work was performed by his partners.

Stone, who is the only one of the three former partners to have been convicted of any crime in connection with the scandal, had testified that he was merely following a policy used by teaching hospitals across the nation when he dictated reports used by the insurance companies.

But Judge Taylor said in sentencing him: “It was not shown that what Dr. Stone was doing was industry standard. What Dr. Stone was doing is wrong.”

Jurors earlier had rejected Stone’s defense, convicting him of nine mail fraud counts. But they acquitted him of 14 other charges, including tax evasion and conspiracy.

“If it had not been for the eggs scandal, the government would not have investigated this case,” said attorney John D. Barnett, who represented Stone.

On Monday, Stone’s relatives, colleagues and friends packed one side of the courtroom. Many hugged him after the sentencing. Ninety-three letters had been submitted on his behalf to persuade the judge that Stone is a “remarkably good man who finds himself in a serious crime, who has made a moral decision to accept what the court gives,” defense attorney Kopeny said.

Prosecutors had asked the judge not to be “obscured by [Stone’s] wit and charm” and to be fair to all sides. But prosecutor Gross did concede that Stone deserved some leniency for staying in California to face his charges, unlike his two partners.

Asch is in Mexico City, and Balmaceda in his native Chile.

Stone said Monday he is glad he stayed behind to face his “responsibilities.” He hopes to resume practicing fertility medicine.

“I feel that I’m not guilty. There were perhaps mistakes in the billing. I did not know [it] was a crime,” the doctor said. “I feel that that was my only participation--my lack of knowledge that it was a criminal act.”