The founder and chief executive officer of a California-based company that marketed stem cell-based products allegedly linked to 19 hospitalizations was sentenced today to 36 months in prison following his conviction under the Federal Food, Drug, and Cosmetic Act.
John W. Kosolcharoen, 53, most recently of Orange County, California, pleaded guilty last month in the U.S. District Court for the Central District of California to one count of introducing an unapproved new drug into interstate commerce with the intent to defraud and mislead. Kosolcharoen is currently in federal custody on a separate, unconnected conviction. The court set a restitution hearing for Dec. 3.
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 among 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. At sentencing, the government alleged that sales of Liveyon products generated approximately $21.6 million in revenue between 2017 and 2018.
“Misleading the public about the safety and effectiveness of purported cures and treatments is illegal,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department will work with its law enforcement partners to prosecute individuals who market potentially dangerous products for personal gain.”
“Exploiting the hopes of patients suffering from serious illnesses is not merely greedy; it’s cruel,” said U.S. Attorney Martin Estrada for the Central District of California. “My office will continue to aggressively prosecute those who take advantage of victims’ fears and anxieties to line their pockets.”
In recent years, the 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 safe or effective—and may have significant safety issues putting patients at risk. Stem cell products are regulated by FDA; generally they must have FDA approval before being introduced into interstate commerce.
In 2018, FDA and Centers for Disease Control (CDC) received reports of patients requiring hospitalization for bacterial infections after receiving Liveyon products across multiple states. Kosolcharoen admitted he fraudulently induced customers into purchasing stem cell-derived Liveyon products by misleading them about adverse events suffered by patients while falsely reporting material facts regarding an FDA inspection outcome at Genetech Inc.. The government alleged CDC's investigation found these stem cell products were linked directly causing hospitalization in eight different states affecting nineteen patients overall.
The case was investigated by multiple agencies including FDA’s Office Of Criminal Investigations FBI Amtrak Office Inspector General Defense Criminal Investigative Service Department Health Human Services Office Inspector General Department Labor Employment Benefits Security Administration California Department Health Care Services
Assistant U.S Attorneys Mark Aveis David Chao handled prosecution alongside Assistant Director Ross S Goldstein Trial Attorneys Meredith B Healy Kathryn A Schmidt Peter J Leininger from Civil Division Consumer Protection Branch Additional information can be found at www.justice.gov/civil/consumer-protection-branch