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Alarming Indictment in South Texas

BROWNSVILLE, Texas (CN) - A phony doctor and two co-defendants were arrested and charged with making $1.5 million from selling stem cells harvested from umbilical cords at a border town maternity clinic, and performing unauthorized stem-cell procedures on patients with incurable diseases, federal prosecutors said.

Francisco Morales, 52, of Brownsville, was arrested by Customs and Border Protection agents on Dec. 22, according to a statement from the FBI and the U.S. Attorney's Office in San Antonio.

Morales made his initial appearance the next morning in Brownsville and is being held without bond.

Alberto Ramon, 48, of Del Rio, and Vincent Dammai, 40, of Mount Pleasant, S.C., were arrested Tuesday, the FBI said in its statement.

Ramon was arrested as he was about to enter his clinic and has already made his initial appearance in Del Rio. Dammai was arrested in Florence, S.C., and is expected to make his initial appearance in Charleston, S.C, today (Thursday).

Lawrence Stowe, 58, of Dallas, is also charged, is considered a fugitive and a warrant was issued for his arrest, the FBI said.

Approval is required from the U.S. Food & Drug Administration before stem cells can be sold to the public and used to treat diseases. But the FDA has yet to approve any stem-cell treatments.

"Beginning in March 2007 and continuing through 2010, the indictment alleges Morales falsely represented to the public that he was a physician licensed to practice medicine in the United States and provided medical advice to individuals regarding the benefits of stem cell treatments," the FBI said. He also is accused of falsely claiming to operate a Brownsville medical clinic called Rio Valley Medical Clinic, to misrepresent to the public that he specialized in using stem cells to treat incurable diseases.

After meeting patients in the United States, Morales performed the stem-cell procedures in Mexico, according to the prosecutors' statement.

It was a nationwide operation, according to the prosecutors' statement.

The indictment claims Stowe marketed, promoted and sold stem cells and other drugs and biological products for treatment of cancer, amytrophic lateral sclerosis, multiple sclerosis and Parkinson's disease, without approval from the FDA.

Stowe is accused of operating several entities, including The Stowe Foundation and Stowe Biotherapy Inc., through which he marketed and sold the products.

Prosecutors say the stem cells were created and manufactured from umbilical cord blood obtained from mothers who were patients of Ramon - a licensed midwife who operated The Maternity Care Clinic in Del Rio.

Ramon allegedly sold the cord blood to a company called Global Laboratories in Scottsdale, Ariz. After obtaining the cord blood from Ramon, the indictment alleges, Global Laboratories sent the tissue to Dammai - a professor of pathology and laboratory medicine in Charleston, S.C. Dammai, without approval from the FDA or university authorities, allegedly used university facilities to create stem cells that were later sold by Global Laboratories.

The defendants allegedly took more than $1.5 million from patients suffering from incurable diseases.

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