Brownsville man arrested in cross-border stem cells scheme

Francisco Morales Mugshot

He oversaw a scheme to harvest stem cells from a border maternity clinic and used them as a cure for cancer and other incurable diseases in Mexico.

But now, Francisco "Frank" Morales is behind bars without bond.

FBI agents arrested 52-year-old Morales in Brownsville early Friday morning.

A federal judge unsealed records filed against him on Tuesday.

The Brownsville man is accused of running a stem cell scheme where he made more than $1.5 million dollars in sales between January 2007 and April 2010.

Court records show that Morales falsely represented himself as a doctor and a stem cell researcher.

According to a 19-page indictment filed in Houston TMs federal courthouse in November, Morales oversaw the purchase umbilical cords and placentas from a maternity clinic in Del Rio, Texas.

Morales allegedly had the genetic materials shipped to a lab in Arizona where they were forwarded into the hands of a South Carolina pathologist who harvested the stem cells.

According to the 15-count indictment, Morales would use the stem cells in Mexico as medical treatments for cancer, multiple sclerosis and procedures that are not approved by the U.S. Food & Drug Administration.

Also named in the indictment are medical professionals Del Rio clinic owner Jesus Alberto Ramon and South Carolina professor Vincent Dammai.

The Maternity Care Center

The process all started at the Maternity Care Center off Las Vacas Street in the Texas border town of Del Rio.

The clinic uses midwives to deliver babies to expecting mothers.

According to the indictment, owner Jose Alberto Ramon would tell women from Mexico that the tissues were being used for research.

Prosecutors allege that Ramon got Mexican mothers to donate the tissue but turned around and sold it Global Laboratories in Scottsdale, Arizona.

Ramon, a licensed doctor in Mexico but not in the United States, spoke to Action 4 News via telephone. He denies the allegations.

The clinic owner said he doesn TMt know Morales and thought that the umbilical cord blood he sent was being used for legitimate research.

Ramon claims he thought he was making donations and actually lost money after deducting employee time and shipping.

The clinic owner said he was compensated $75 dollars per shipment but stopped sending them after being interviewed by FBI agents in 2010.

We thought we were doing something good for good reasons, Ramon said via telephone.

Ramon is expected to be arraigned on conspiracy charges at a court in Houston on January 5th.

The clinic owner said he TMs looking to clear his name.

All this time, I suffered, Ramon said. I TMm very mad with these people. They don TMt care how dangerous it could be to do what they did.

Global Laboratories

The indictment show that the tissues were sent from Del Rio to Global Laboratories in Scottsdale, Arizona.

At least 10 shipments of stem cells were documented as being sent from the lab to Morales TM home off Hackberry Lane in Brownsville between April 2009 and February 2010.

According to the indictment, Medical University of South Carolina Pathology Professor Vincent Dammai worked as a consultant for Global Laboratories.

Prosecutors allege that Dammai took the materials from Del Rio, used a university lab to harvest the stem cells and sold them to Morales.

Court records show that all the genetic materials were through the mail.

Dammai has not made a court appearance in the case

According to the university website, Dammai is still listed as an assistant professor.

Stem Cell Scam

Records show Morales was busy traveling across the United States where he falsely claimed to be a doctor and involved in stem cell research at Harvard, Duke and UCLA.

The indictment shows he used a post office box at a United Parcel Service (UPS) office off West Price Road in Brownsville to run the bogus Rio Grande Valley Medical Clinic.

Morales allegedly made more than $1.5 million dollars by giving stem cell injections to patients with incurable diseases such as cancer and multiple sclerosis.

The indictments show that the treatments cost as much as $10,000 dollars and took place across the border in Mexico.

Morales and another man were both featured on the CBS News program "60 Minutes" during a report named "21st Century Snake Oil" back in September 2010.

Court Hearing

Morales is facing conspiracy, mail fraud, wire fraud, making a false statement to federal agents, introduction of an unpparoved new drug and misbranded drug charges.

Ramon is facing conspiracy and introduction of an unpparoved new drug charges while Dammai is facing conspiracy charges.

Morales appeared before U.S. Magistrate Judge Ronald Morgan in Brownsville on Friday.

Judge Morgan ordered that Morales be held without bond and taken to Houston where his arraignment is expected to take place.

Neither attorney information nor a court date for Morales TM arraignment were immediately available.

If convicted, Morales could face from three to 20 years in federal prison based on the different charges.