Alleged U.S. Stem Cell Fraudsters Shielded by South African Legal Logjam

CAPETOWN, South Africa, April 23, 2007 — -- A former American catwalk model and her South African husband, wanted by the FBI for allegedly administering fraudulent stem cell treatments, have so far managed to avoid being extradited from their current home in South Africa to the United States to face their charges.

A lengthy international investigation by U.S authorities against Laura Vanessa Brown, of Miami Beach, Fla., and Steven van Rooyen of Cape Town, culminated in a 51-count indictment handed down by a federal grand jury in Atlanta in March 2006. But by then Brown and van Rooyen were no longer in the United States.

In a number of interviews the couple maintains the science is real. They say they are not selling false hope, but rather making new science available to people who desparately need it.

Operating as BioMark International in Atlanta, Brown and Van Rooyen are charged with 51 counts of alleged fraud and the distribution of unapproved and misbranded drugs in the form of stem cell injections.

According to the Department of Justice, if convicted they could face a maximum 20-year prison sentence for fraud, plus three years per misbranding of drug count, and a fine of up to $1 million per count.

Tracked Down in Johannesburg

It has been almost a year since the couple were tracked down and arrested by Interpol at OR Tambo Airport in Johannesburg, on their way to their home in the wealthy suburb of Llandudno in Cape Town. But instead of being extradited on an order requested by U.S. Secretary of State Condoleezza Rice, the pair hired an expensive legal team to argue that the extradition treaty between America and South Africa is invalid because it was not correctly signed in South Africa. It doesn't bear the South African President Thabo Mbeki's signature.

Despite pressure from Mbeki to expedite the process, the extradition treaty matter is due to be decided by the Pretoria High Court on April 26, and will most likely have to proceed from there to the Constitutional Court -- a lengthy process in South Africa's overworked justice system -- before its validity can be determined. Only if the agreement is judged valid, can a separate hearing take place to decide on the merits of the crime and whether Brown and van Rooyen should in fact be extradited to face their charges.

To date, operating first as BioMark International and later as Advanced Cell Therapeutics (ACT), they've treated around 800 patients in America and the EU, charging up to $26,000 for each treatment (although the cells cost approximately $1000 per patient). The administering doctor earns 10 percent of the fee. And although it has been reported that a clinic in Rotterdam refused to continue working with ACT in October 2006 after a patient suffered an "acute allergic reaction" to the treatment, it is estimated that, before expenses, the company's income is about $18 million. It is also alleged that ACT is still offering treatments.

Science Versus Politics

Van Rooyen moved from Cape Town to Malibu in the late 1990s where he met Brown, an ex-model turned yoga teacher with an interest in healing and health. Brown's father introduced the couple to Mitchell Ghen, an Atlanta doctor who was offering stem cell treatments at $26,000 each to the critically ill.

Since the discovery that stem cells have the ability to become any tissue, and the isolation of the cells from days-old human embryos by researchers at the University of Wisconsin in 1998, possibilities suddenly seemed endless -- doctors could grow nerve fibres to patch a severed spine, make new organs to replace damaged ones or create brain cells to help patients with Alzheimer's disease. In short, some currently incurable diseases could be cured.

A 2001 attack on President Bush -- after he allotted federal funds for research but not for study that involved cells from human embryos to appease religious conservatives -- by high-profile figures like former first lady Nancy Reagan and the late actor Christopher Reeve made the general public aware of what was once considered exotic science.

Stem cell treatments in the United States are illegal until they have undergone complex clinical trials and been approved by the Food and Drug Administration. Trials are currently under way, primarily in Europe, where the political climate surrounding stem cell research is more favorable than in the United States. But while these trials look promising, scientists agree that the complex biochemistry of humans means successful stem-cell therapies are years, if not decades, away.

Brown and van Rooyen -- neither of whom have a background in science -- relocated to Miami Beach and formed their own company, BioMark International, in 2002. They don't believe they've done anything wrong. According to the couple, science has proven the therapeutic power of stem cells -- they're simply making them available now.

A Legal Loophole

For people with life-threatening or degenerative illnesses for which there is currently no cure, a decade -- or even a few years -- is too long to wait. It's easy for companies who offer hope in the form of untested stem-cell therapies to capitalize.

To get around the problem of FDA approval, Ghen relied on the Access to Medical Treatment Act. The act, applicable only in certain states, makes it lawful for doctors to try untested therapies on people with incurable diseases.

Relying on the same legal loophole, van Rooyen and Brown worked hard to build relationships with doctors who would refer patients and administer the treatment -- a subcutaneous injection of 1.5 million umbilical-cord stem cells for $26,000.

"Over a short period of time, we had miraculous results and more and more physicians started referring patients, especially in the area of multiple sclerosis," said van Rooyen (who sometimes used the alias Mark Dehavillan). "Neurologists were opposed to what we were doing, but there is a lot of arrogance in the medical profession. These stem cells were only discovered in the late 1980s and most doctors didn't know about them."

Along with multiple sclerosis, the conditions Brown and van Rooyen treated were those with the poorest prognosis: spinal-cord injuries, Parkinson's disease, muscular dystrophy and amyotrophic lateral sclerosis (ALS, also known as Lou Gehrig's disease, which gradually paralyzes the muscles and usually kills within two to five years).

"We had 22 doctors in five states," said Brown in January, "and 80 percent of the patients treated in over 80 disease types had significant clinical benefit."

There has been anecdotal evidence on both sides. A damning article in the Los Angeles Times in 2005 told of an ALS sufferer who received treatment from BioMark with no results and died seven months later. But South African Bridget Hall, whose son Matthew suffered a spinal-cord injury at 18 that left him a quadriplegic, told Marie Claire South Africa that after the first injection sensation returned to Matthew's body; after a follow-up injection 18 months later movement returned to his hands and he could walk between parallel bars.

Brown and van Rooyen claim that there hasn't been a single negative side effect, but one former employee who spoke to Marie Claire on condition of her anonymity said that "people would call in all the time saying, 'I can't use my hands, I have a high fever, my doctor doesn't know what it's from.'" She believes that all of these could have been side effects from the injections.

Raised Suspicions; an Undercover Operation

In October 2003, when the family of an ALS sufferer contacted the FDA to raise concerns about what BioMark was doing, an undercover operation was arranged. The FDA brought in the FBI and BioMark's Miami Beach office was raided, its bank accounts were frozen (court records show that they held $264,554.12) and the company shut down. Within 24 hours the doctors the company worked with had severed ties with BioMark.

Van Rooyen claims that they weren't misrepresenting themselves to anyone -- neither patients nor doctors. "Obviously the FBI threatened to revoke their [doctors'] medical licenses," he said. "We were set up in the most horrible, vindictive manner."

According to van Rooyen, BioMark was also under political attack: "The Bush administration supports the pharmaceutical industry, which wants smaller would-be contenders in the multibillion dollar stem cell arena to be put out of business."

Not Fit for Use on Humans

While they were being investigated by the FBI, van Rooyen decided to concentrate on the European market. (Legislation governing stem cell research is more liberal in the EU, though treatments still require complex medical trials and government approval.)

The couple left the United States for van Rooyen's native Cape Town, changed the business's name from BioMark International to Advanced Cell Therapeutics (ACT) and their own names to Sebastian Carlyle and Sean Castle, and hired 20 employees. Cape Town became their administrative center (although patients were told the company's offices were in Switzerland) and treatments allegedly took place in clinics around the world from Holland to Pakistan -- and even on a ferry in international waters off the coast of Ireland.

Following a three year probe by the FBI and the FDA where the couple appeared on the FBI's Most Wanted List, Van Rooyen and Brown were indicted and charged with fraud and the distribution of unapproved and misbranded drugs.

Shortly after the indictment, the BBC program, "Newsnight," reported that the stem cells being used by ACT were meant for laboratory research purposes only, not for use on humans. Purchased from a Californian manufacturer called AllCells, they contained an animal protein called fetal bovine serum. Van Rooyen told Marie Claire magazine in South Africa that he is taking legal action against the BBC, but on what charges exactly remains unclear.

A Marriage of Convenience?

At the time of the indictment van Rooyen and Brown were in the Seychelles, allegedly setting up a clinic. They were arrested on June 10, 2006, on their return to South Africa.

After spending 10 days in jail (where they got engaged), the couple was released on R100,000 (approximately $13,900) bail each. They married in July last year, though it is widely believed that they are no longer romantically involved and this is a marriage with a motive: Brown has been declared an undesirable immigrant by South African Home Affairs and her marriage to a South African citizen may strengthen her position.

Since then, the couple's high-powered defense team has managed to get the extradition hearing postponed, based on the technicality that will be decided on in Pretoria on Wednesday. Further delays while the matter proceeds to the Constitutional Court are likely. In the meantime, they live a charmed life in one of Cape Town's most up-market suburbs.

Business as Usual

The gap has given Brown and van Rooyen time to plan their next move.

It is widely believed that ACT will shortly be offering stem cell treatments in the Seychelles. Van Rooyen asserts that clinical trials have been approved there, and, South African state prosecutor Beverly Edwards believes that at least two of ACT's key employees have relocated to the island. The climate is good, the government friendly and the arms of U.S. or South African law can't reach that far.

As long as there are desperate people, van Rooyen and Brown have a captive market.

Georgia Black is the features editor at Marie Claire magazine in South Africa