Henderson physician pleads not guilty in fraud case

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A longtime Henderson pediatrician surrendered Thursday, a day after he was charged with participating in a scheme to defraud investors and chronically ill patients through the use of experimental stem cell implant procedures.

Dr. Ralph Conti, 50, stood alongside other inmates during his initial appearance Thursday in federal court, where he pleaded not guilty to conspiracy and fraud charges. U.S. Magistrate Judge Bill Hoffman then released the pediatrician, who was dressed in street clothes, on his own recognizance.

Conti told the judge he had received the 23-page indictment but had not read it.

Defense attorney Stan Hunterton said he had discussed the document with his client.

"He understands the basic nature of the charges," the lawyer told Hoffman.

The charges clearly did not come as a surprise to Conti. Assistant U.S. Attorney Crane Pomerantz said evidence was provided to the defendant months ago "in an effort to resolve this case prior to indictment."

Conti was named in a superseding indictment, which added him as a defendant in a case previously filed against Las Vegas resident Alfred Sapse, 85.

Sapse was arrested on fraud charges in July 2010 after federal authorities accused him of duping patients and investors with claims that he was a retired physician who had developed a novel medical procedure involving stem cells.

A trial for both Sapse and Conti is set for March 12.

The indictment alleges Sapse received about $1 million from patients and investors.

After Thursday’s hearing, Hunterton would not comment on the allegations against his client. He acknowledged that he and Conti had participated in previous discussions about the case with prosecutors.

"We were unable to resolve it," Hunterton said. "That’s what courtrooms are for."

Conti’s personal lawyer, Jim Rosenberger, also attended the hearing. He described Conti as the principal physician in a group that has six offices throughout the Las Vegas area and 60 staff members.

In opting to release Conti, Hoffman noted that the pediatrician has lived in the community for 22 years.

According to the indictment, the scheme began around January 2005.

"By misrepresenting his credentials, the nature of his treatment, the source of his ‘stem cells,’ and the adverse effects suffered by previous patients, defendant Sapse convinced chronically ill patients to undergo experimental implant procedures, many of which were performed by defendant Conti, and convinced investors to pay him large amounts of money without knowing the short- or long-term effects of the implant procedures he was promoting," the indictment alleges.

According to the indictment, Sapse formed Stem Cell Pharma Inc., a Nevada corporation, in May 2005 "in order to create the false impression that he operated a legitimate pharmaceutical company."

The indictment alleges Sapse has never been licensed in Nevada or any other state to practice medicine.

In January 2007, the Las Vegas Review-Journal reported that the federal Food and Drug Administration had told Sapse to stop implanting adult stem cells harvested from placentas into patients with various diseases, including multiple sclerosis.

The FDA had sent Sapse a notice of its concerns in November 2006 after an inspection of Stem Cell Pharma Inc., which he operated in his Las Vegas apartment.

According to the indictment, Sapse hired Conti in the fall of 2005 and caused him to implant placental tissue in the abdomen of sick patients. The document alleges Conti, who had no prior stem cell training, performed the procedure on about 34 patients in 2006.

"Conti performed the implant procedures knowing they would not benefit the patients," the indictment alleges.

In November 2006, according to the document, Conti performed procedures that resulted in the infection of several patients.

The indictment alleges Sapse entered into an agreement around February 2007 with an unidentified Mexican physician to replace Conti as the person performing the implant procedures.

In a phone interview Thursday, Sapse said Conti’s name came up several years ago during a conversation with another doctor as "someone who was interested in stem cell research."

"I contacted him, and he was very interested," Sapse said.

Sapse said he told Conti how to do the implant procedure and then watched the pediatrician do it in his office in the Del Webb Medical Plaza on the St. Rose Dominican Hospital-Siena campus.

"I didn’t do the implantations," Sapse said. "He did."

Sapse said Conti would get placentas from the labor and delivery department at the nearby hospital.

St. Rose officials would not answer questions about that allegation, but hospital spokeswoman Jennifer McDonnell released this statement:

"St. Rose has no involvement in the indictment and is not involved in any way in the actions described in the indictment. To our knowledge St. Rose has never released any placentas to Dr. Ralph Conti and it would be against our policy to release a placenta to any physician. Our policy states that the hospital holds the placenta for seven days. There are times for religious or cultural reasons that the mother will request the placenta. If we receive such a request, we will release the placenta to the mother only after the seven day holding period. These types of requests are received very rarely. Otherwise, the placentas are destroyed."

Sapse said he did not know whether hospital administrators were aware of what Conti was doing, but he said the pediatrician seemed to have no trouble getting the placentas.

"He’d just walk over and get them," he said.

A letter obtained by the Review-Journal from a former associate of Conti’s shows that Rosenberger warned the pediatrician on March 9, 2006, that the implantation of stem cells was in the "experimental stage" and was "probably excluded from coverage" under his liability insurance policy.

Rosenberger wrote, "While your desire to help those whose condition might be improved by stem cell implantation is admirable, you need to understand the risk that you would be exposed to if the procedures were unsuccessful or caused harm. My opinion is that these risks should be discussed and considered in greater detail before you begin performing such procedures."

In June 2008, the Nevada State Board of Medical Examiners sent Conti a letter stating it had received information regarding his treatment of 18 patients.

"The complaint alleges that you implanted human tissue in an experimental procedure into multiple patients without their informed consent. … It is also alleged that you failed to examine or obtain a complete history for the patients prior to performing the procedures and you failed to follow up with the patients following the procedure. It is alleged that your treatment and care of these patients may have fallen below the standard of care."

The board requested complete records for all of the patients, as well as consent forms.

In October 2010, the board noted in another complaint against Conti that he failed to provide the requested records and that he failed to appear before the investigative committee.

On June 14, the board concluded that Conti "willfully failed" to provide either records or a response as ordered by the investigative committee and that he failed to appear before the committee.

Conti received a public reprimand and was ordered to pay a fine of $4,000 and to reimburse the board for nearly $4,000 spent for the investigation. The pediatrician’s license remains in good standing.

Contact reporter Carri Geer Thevenot at cgeer@reviewjournal.com or 702-384-8710. Contact reporter Paul Harasim at pharasim@reviewjournal.com or 702-387-2908.