19 Hospitalized After OC Businessman Lied About Stem Cell Drug: Authorities

ORANGE COUNTY, CA — The founder and CEO of a California company was sentenced this week to three years in prison after he lied to customers about the safety and effectiveness of stem cell-based products linked to 19 hospitalizations in eight states, authorities said.

John W. Kosolcharoen, 53, of Orange County, pleaded guilty earlier this year to introducing an unapproved new drug to interstate commerce with intent to defraud and mislead, according to the U.S. Department of Justice, which announced the plea Monday.

“Exploiting the hopes of patients suffering from serious illnesses is not merely greedy, it’s cruel,” U.S. Attorney Martin Estrada said in a news release. “My office will continue to aggressively prosecute those who take advantage of victims’ fears and anxieties to line their pockets.”

Kosolcharoen created two companies — Liveyon LLC and Genetech Inc. — to make and distribute injectable stem cell products made from human umbilical cord blood, marketing the products under brand names including ReGen, according to the department.

Kosolcharoen and others misrepresented ReGen as suitable for the treatment of conditions such as lung and heart diseases, autoimmune disorders, and Alzheimer’s and Parkinson’s diseases, authorities said, adding the products were marketed with false and misleading statements about safety and effectiveness.

Sales of Liveyon products generated about $21.6 million in revenue between 2017 and 2018, according to the department.

In 2018, the U.S. Food and Drug Administration and the Centers for Disease Control and Prevention received reports of patients needing to be hospitalized for bacterial infections after receiving Liveyon products, authorities said.

Kosolcharoen convinced customers to buy Liveyon products by misleading them about the cause and severity of adverse events suffered by patients as well as by falsely reporting and hiding information about the outcome of an FDA inspection of Genetech, according to the department.

Kosolcharoen was in federal custody on a separate conviction, authorities said, adding a restitution hearing was set for Dec. 3.