Fertility Doctor Goes on Trial Today

SANTA ANA —  Dr. Sergio C. Stone, one of three partners blamed for the UC Irvine fertility scandal, is the first--and may remain the only--to be brought to trial on criminal charges.

But when opening statements are made in the trial, scheduled to open today in U.S. District Court in Santa Ana, jurors will hear nothing of the nationwide scandal in which human reproductive eggs and embryos were stolen and then transplanted into other women or shipped off to medical research laboratories.

Instead, the panel of six men and six women will decide a case of alleged mail fraud and income tax evasion.

The federal government contends that Stone and his former partners schemed to bill insurance companies illegally for services they did not perform.

Prosecutors have remained tight-lipped about their trial strategy, declining comment beyond court documents alleging that Stone and his partners at the university’s Center for Reproductive Health “routinely skimmed cash from the fertility clinics by using deceptive internal accounting practices.”

Stone’s attorney, John D. Barnett, believes his client is being made “a scapegoat for the emotion-laden eggs and embryo inquiry” and contends that his client’s billing practices were legal.

“If there wasn’t any eggs-and-embryo investigation, there wouldn’t have been any criminal prosecution of Dr. Stone,” Barnett said. “The government has indicated time and again that there’s no evidence to tie him to any eggs and embryo problem. It’s a cruel irony. The events that drive this investigation have nothing to do with Dr. Sergio Stone. But he is the only one who is facing trial.

“What Dr. Stone did was lawful,” Barnett added. “He billed only for work that was done.”

Stone faces 20 counts of mail fraud. Each count carries a maximum penalty of five years in federal prison and a $250,000 fine.

Additional charges include two counts of filing false income tax returns--each punishable by three years in prison and a $100,000 fine--and one count of conspiracy to commit tax fraud, which carries a maximum penalty of five years in prison and a $250,000 fine.

Stone has denied any wrongdoing. He was indicted last year by a federal grand jury in Los Angeles along with his former partners, Ricardo H. Asch and Jose P. Balmaceda.

Asch and Balmaceda fled the country more than two years ago. Asch is now living and practicing in Mexico City and Balmaceda practices in his native Chile.

No extradition hearings are underway for either man. Both Asch and Balmaceda have denied wrongdoing.

Stone’s attorney said the 55-year-old endocrinologist is “very anxious” to get the federal trial underway. He remains under house arrest at his home in Villa Park after posting a $3-million bond. The trial is expected to last about six weeks.

Lead prosecutor Thomas Bienert Jr. said the government’s investigation into the fertility clinic is not over and that Asch and Balmaceda could face additional charges. But he added that “the government does not anticipate further charging of Dr. Stone.”

While Stone is considered by some to be the least culpable of the three partners, it is not surprising that he is facing criminal charges, Laurie Levenson, assistant dean of Loyola Law School, said.

“I think there had been frustration in the community that nothing had been done about the scandal,” Levenson said. “It’s not unusual if [investigators] are brought in and don’t find a specific violation, they’ll use the general statute of fraud and tax evasion. This is very common.”

Many of the 80 prospective jurors interviewed last week in federal court were aware of the fertility scandal, which received exhaustive news coverage and was the subject of a television movie.

But few knew the nature of the criminal charges pending against Stone.

“This case is not the case that some of you have read about in the publicity about eggs and embryos,” U.S. District Judge Gary L. Taylor told prospective jurors. “It’s a totally neutral factor and must not be considered as evidence in our case.”

But some wonder if the jury will be able to completely block the fertility scandal from their minds.

“I think they will try but people are human beings,” Levenson said. “To the extent that they already have in their mind that the defendant is a bad guy, that may influence how they view the evidence in the fraud case. On the other hand, it’s my personal experience that jurors really do bend over backward to give a fair trial.”

In addition to the federal trial, the fertility scandal at the UCI fertility clinic has resulted in more than 100 civil lawsuits filed since the scandal broke in the fall of 1994, eventually closing the center’s doors.

More than half of suits have been settled.

Stone’s trial will provide little solace for families victimized when they went to the clinic for help with fertility problems. In some cases, couples were devastated to learn that their eggs and embryos had been used to produce children for others.

Newport Beach-based attorney Walter Koontz, who is representing six couples in suits relating to the fertility misdeeds, said that although he doesn’t believe Stone was involved in the theft of eggs and embryos, he believes Stone “knew about it.”

“To the extent that he is being prosecuted because he refuses to cooperate and tell the truth about what happened, then the prosecution is absolutely necessary,” Koontz said. “But it doesn’t address the main issue of concern for our clients, which is what happened to their eggs and embryos.”