Now-Defunct For-Profit Stem Cell Clinic Ordered to Pay $5.1 Million for Scamming Patients Through False Advertising

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Photo of New York Attorney General Letitia James courtesy Wikimedia commons

A now-defunct New York City for-profit stem cell clinic — Park Avenue Stem Cell — was order by court to pay $5.1 million in potential consumer restitution, penalties, and costs for fraudulently and illegally advertising their stem cell procedures. The judgment resolves a 2019 lawsuit by New York State Attorney General Letitia James which claimed the defendants’ scammed patients out of thousands of dollars each for unproven and potentially harmful medical treatments involving stem cells. 

According to the lawsuit, the clinic falsely advertised on their website, social media, television, and foreign language newspapers that they could treat a variety of serious medical conditions — including erectile dysfunction and Parkinson’s disease — using patients’ own stem cells. Consumers paid the clinic nearly $4,000 per procedure, with some consumers paying more than $20,000 for multiple procedures. Most of the procedures involved adipose stem cells, which are derived from a patient’s own fat tissues.   

The court says the defendants misrepresented that their procedures were approved by the U.S. Food and Drug Administration (FDA), that their patients were participating in an established research study, and that their procedures had been endorsed by several scientific and medical organizations.   

As a state agency, CIRM’s duty is to educate the public about the concerns over “stem cell tourism” and the growing number of predatory clinics that advertise unproven stem cell therapies at great cost to the patient.  

In addition to hosting public forums on stem cell tourism concerns and resources for patients seeking stem cell treatments, CIRM partnered with California State Senator Ed Hernandez (D-West Covina) to create a new law that attempts to address the issue. The bill, SB 512, was passed in 2017 and now requires medical clinics whose stem cell treatments are not FDA approved to post notices and provide handouts to patients warning them about the potential risk.  

Read more about this lawsuit at the New York Attorney general’s website. 

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