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Bilked patients by offering a bogus stem-cell treatment

Posted on Fri, Mar. 31, 2006

Doctor is charged with therapy scam
The Atlantic County physician allegedly bilked patients by offering a bogus stem-cell treatment.

Inquirer Staff Writer

An Atlantic County doctor was charged yesterday with bilking patients by offering them a bogus stem-cell therapy for Lou Gehrig's disease.

Charlene DeMarco, 44, and codefendant Elizabeth Lerner, 38, were charged in an 11-count indictment with mail and wire fraud, conspiracy, and money laundering.

Both said little during their initial federal court appearance in Camden yesterday.

The magistrate judge released them under house arrest. They live together in Egg Harbor City, where DeMarco has an osteopathic practice.

The indictment identifies four patients who paid as much as $35,000 for stem-cell therapy DeMarco promised. Authorities said she had told the patients she had Food and Drug Administration approval for the therapy when, in fact, the agency had rebuffed her requests to test it.

In 2001, DeMarco told the agency she wanted to inject stem cells into the base of a patient's brain, and later she proposed placing stem cells on a layer of gel that would be injected onto the brain, according to the indictment.

DeMarco, a specialist in Lyme disease, withdrew the first request after the FDA sought more information, and the FDA placed the second on hold. Nonetheless, in August 2002, DeMarco offered the treatment to a patient who died a short time later, the indictment said.

From 2002 to '04, it said, DeMarco promised the therapy to four more patients, who paid a total of more than $75,000. None ever received treatment from DeMarco, authorities said.

DeMarco and Lerner, who is accused of using an alias and posing as DeMarco's associate, were charged with laundering the patients' money through banks, a Merrill Lynch account, and a company they established and called Innovative Cellular Technology.

Both said they planned to hire lawyers. The federal public defender representing them yesterday said they would plead not guilty.

In a statement, U.S. Attorney Christopher Christie said, "The conduct alleged in the indictment is contemptible and represents a shocking example of greed and a total disregard for historic principles of humane medical treatment."


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