Opening Arguments Set in UC Fertility Clinic Case

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

But although opening statements in Stone’s trial are scheduled to be made today in U.S. District Court in Santa Ana, jurors won’t hear about the nationwide scandal in which human reproductive eggs and embryos were allegedly stolen and then transplanted into other women or shipped off to medical research laboratories.

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

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

Prosecutors have remained tight-lipped about their trial strategy and have declined to comment on the case beyond what is in court documents that charge 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, says 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 said. “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 left 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 that the government’s probe 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.”

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

“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 that led to exhaustive news coverage and a television movie.

But few knew the nature of the criminal charges 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 said to prospective jurors last week. “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 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 scandal at the UC Irvine fertility clinic has resulted in the filing of more than 100 civil lawsuits since the case broke in fall 1994, and eventually closed the center’s doors.

More than half of the lawsuits have been settled.

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