The founder and chief executive officer of a California-based company that marketed stem cell-based products linked to multiple hospitalizations pleaded guilty yesterday to a felony violation of the Federal Food, Drug, and Cosmetic Act.
John W. Kosolcharoen, 53, most recently of Orange County, California, pleaded guilty to introducing an unapproved new drug into interstate commerce with the intent to defraud and mislead. Kosolcharoen is currently in custody serving a sentence for a separate, unconnected conviction. U.S. District Judge Otis D. Wright II for the Central District of California presided over the hearing pursuant to a plea agreement with the government. The court set Kosolcharoen’s sentencing for Sept. 23.
According to court documents, beginning in 2016, Kosolcharoen created two companies, Liveyon LLC and Genetech Inc., to manufacture and distribute injectable stem cell products made from human umbilical cord blood. Liveyon marketed the products under different brand names, including “ReGen.” In pleading guilty, Kosolcharoen admitted that he and others misrepresented ReGen as suitable for treating various conditions such as lung and heart diseases, autoimmune disorders, Alzheimer’s disease, Parkinson’s disease and others. Liveyon marketed the products throughout the United States until about April 2019 using advertising materials that contained multiple false and misleading statements about their purported safety and effectiveness.
In recent years, the U.S. Food and Drug Administration (FDA) has warned consumers that patients seeking cures for serious diseases may be misled about unapproved stem cell products that are illegally marketed without being shown to be safe or effective. These products may have significant safety issues that put patients at risk. Stem cell products are regulated by FDA and generally must have FDA approval before being introduced into interstate commerce.
As part of the plea agreement, Kosolcharoen admitted that to mislead FDA about Liveyon’s activities, he directed Liveyon’s purchase orders to falsely state that the stem cell products were being sold “for research purposes only.” In 2018, FDA and the Centers for Disease Control and Prevention (CDC) received reports of patients in multiple states requiring hospitalization for bacterial infections after receiving Liveyon products. Kosolcharoen admitted that he and others fraudulently induced customers into purchasing stem cell-derived Liveyon products by misleading the public about adverse events suffered by Liveyon patients while falsely reporting material facts regarding an FDA inspection of Genetech which documented evidence of significant deviations from good manufacturing practices.
“Unapproved stem cell treatments not only endanger public health but also exploit the hopes of patients who seek relief from serious diseases,” said Principal Deputy Assistant Attorney General Brian Boynton. “The Department of Justice is committed to safeguarding the public from these schemes.”
“This defendant recklessly put people’s lives in danger,” said U.S. Attorney Martin Estrada for the Central District of California. “Today’s guilty plea shows that we will hold accountable corporate executives who put profits over patients.”
“We are grateful for work by DOJ to hold accountable establishments marketing potentially dangerous stem cell products,” said Director Peter Marks of FDA’s Center for Biologics Evaluation and Research.
“When unscrupulous providers offer unapproved umbilical cord blood stem cell treatments they put consumers’ health at risk,” said Special Agent in Charge Robert Iwanicki of FDA Office of Criminal Investigations Los Angeles Field Office.
“This investigation was a joint effort between multiple federal agencies,” said Director Michael Bell of CDC’s Division of Healthcare Quality Promotion.
FDA's Office of Criminal Investigations along with several other federal agencies investigated this case.
Assistant U.S. Attorneys Mark Aveis and David Chao along with Assistant Director Ross S. Goldstein among others are prosecuting this case.
Additional information can be found at www.justice.gov/civil/consumer-protection-branch.