Former Executive at Irvine-Based Company That Marketed Faulty Stem Cell Products Sentenced to 3 Years in Federal Prison

LOS ANGELES - The imprisoned founder and CEO of an Orange County-based company that marketed stem cell-based products linked to multiple hospitalizations was sentenced today to 36 months in federal prison - consecutive to his current prison sentence.

John Warrington Kosolcharoen, 53, most recently of Rancho Santa Margarita, was sentenced by United States District Judge Otis D. Wright II, who also scheduled a December 3 restitution hearing in this case.

Kosolcharoen pleaded guilty on August 26 to one count of 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.

"Exploiting the hopes of patients suffering from serious illnesses is not merely greedy, it's cruel," said United States Attorney Martin Estrada. "My office will continue to aggressively prosecute those who take advantage of victims' fears and anxieties to line their pockets."

"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."

Beginning in 2016, Kosolcharoen created two companies, the Irvine-based Liveyon LLC and the San Diego-based 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."

Kosolcharoen and others misrepresented ReGen as suitable for the treatment of a variety of 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 consumersLinks to other government and non-government sites will typically appear with the "external link" icon to indicate that you are leaving the Department of Justice website when you click the link. that patients seeking cures and remedies for serious diseases and conditions may be misled about unapproved stem cell products that are illegally marketed, have not been shown to be safe or effective, and, in some cases, may have significant safety issues that put patients at risk. Stem cell products are regulated by FDA, and generally they must have FDA approval before being introduced into interstate commerce.

Kosolcharoen misled the FDA about Liveyon's activities by directing 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 reportsLinks to other government and non-government sites will typically appear with the "external link" icon to indicate that you are leaving the Department of Justice website when you click the link. 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, among other things, misleading the public about the cause and severity of adverse events suffered by Liveyon patients, and falsely reporting and concealing material facts regarding the outcome of an FDA inspection of Genetech. According to FDA records, that inspection documented evidenceLinks to other government and non-government sites will typically appear with the "external link" icon to indicate that you are leaving the Department of Justice website when you click the link. of significant deviations from good manufacturing and tissue practices.

FDA's Office of Criminal Investigations; the FBI; Amtrak Office of Inspector General; Defense Criminal Investigative Service; the U.S. Department of Health and Human Services Office of Inspector General; the U.S. Department of Labor Employment Benefits Security Administration; and the California Department of Health Care Services investigated this matter.

Assistant United States Attorneys Mark Aveis of the Major Frauds Section and David H. Chao of the General Crimes Section, Assistant Director Ross S. Goldstein and Trial Attorneys Meredith B. Healy, Kathryn A. Schmidt and Peter J. Leininger of the Justice Department's Consumer Protection Branch prosecuted this case.

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