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Cord Blood Company Shut Down Following I-Team Investigation

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(credit: KTVT/KTXA) Ginger Allen
Ginger is the Senior Investigative Reporter of the CB...
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SUNSET, TX (CBS 11 I-Team) - A now-shut down California Company is facing a $300,000 judgment after the I-team discovered it took money from parents to store their children’s stem cells and then closed its doors.

In late 2011, Crystal Prince of Sunset, Texas contacted the I-team because she thought her then 2-year-old daughter, Trinity, was facing a life threatening illness.

“I have cried and cried for my daughter.”

Prince believed the umbilical cord she had saved when Trinity’s brother was born was the answer. The problem was—she couldn’t find that potentially life-saving blood or the company, BioBancUSA in California, which she had been paying to store it.

(credit: CBS 11 News)

(credit: CBS 11 News)

“It’s a piece of hope I hold on to with that cord blood. If that cord blood is gone, that hope, that help, that chance is gone.”

Parents are typically asked before childbirth if they want to store their baby’s umbilical cord. Doctors believe it may hold the cure to up to 80 life threatening diseases. Parents have an option of a public bank, which is not donor specific, or a private bank. Private banks typically charge monthly or annual fees to store the blood. Parents are given an assurance their baby’s blood will be there if they need it. But, Prince says she could not get BioBancUSA to return her calls.

She turned to the I-team. We traveled to Northern California where we discovered what was once BioBanc USA. We found the headquarters in a high rise in Monterrey. The door to the once-apparently thriving business was open, but no one was inside. We walked through office after office. The lights were out. And, it appeared that no one had been there for some time. A sign, reading BioBancUSA, rested on the floor of what looked like a one-time lobby.

(credit: CBS 11 News)

(credit: CBS 11 News)

It looked like the employees had closed up shop and walked out. “That’s essentially what we believed happened, “says Monterey County Deputy District Attorney Dije Ndreu.

The I-team learned the FDA had not inspected this facility for two years. And, after we started asking why regulators hadn’t stepped in, the state of California revoked BioBanc’s license citing many violations.

We’ve now learned the State of California obtained a default judgment against BioBancUSA. It is now seeking to recover $267,500 in civil penalties. The California Corporation is also permanently restrained from “operating a cord blood…facility without a valid license from the California Department of Public Health.”

“For about a year, the cord blood operated without any medical staff, any laboratory staff. There was no quality control being done… They committed health and safety violations. Customers weren’t told. Cord blood is a precious resource you can only get it once,” says Ndreu.

The I-team eventually tracked down Prince’s stored blood at another facility in Southern California where it had been transported. And we learned it wasn’t the first time, that bank had taken over tanks for other private cord blood companies. The FDA had shut down two others. And another had gone bankrupt.

(credit: CBS 11 News)

(credit: CBS 11 News)

Today, Prince’s little girl, Trinity, is four. She hasn’t needed the blood yet. Prince says she believes Trinity is better; however, she’ll never know if the blood was maintained properly and will be viable unless Trinity needs it. She says, “I would still do it over again tomorrow and save cord blood. It is a life insurance that you never know if you will need. Instead of it being just an insurance it also became a gamble.”

But, she has little trust in the current private cord blood bank industry. “I have zero beliefs in the current system.” She is glad the state of California took action, but it really did nothing to resolve her situation.

For the victims like her and the others the I-team talked to, there is no restitution and no reassurance. “My guess is that our situation with our cord blood went into a FDA report and then that report went into a file drawer like nothing ever happened.”

Two years ago, when the I-team began this investigation, we raised a lot of questions about the lack of oversight in the private cord blood bank industry. So, we went back to the FDA and pressed it to tell us what improvements in oversight have been made. We asked if the agency has increased inspections or strengthened requirements.

An FDA spokesperson sent us the following statement:

“The number of inspections varies from year to year, however the regulations have remained essentially the same. Periodically, FDA issues guidance documents to assist regulated industry in complying with those regulations. The following links provide access to the guidance documents related to HCT/Ps:
http://www.fda.gov/BiologicsBloodVaccines/TissueTissueProducts/default.htm
http://www.fda.gov/BiologicsBloodVaccines/GuidanceComplianceRegulatoryInformation/Guidances/CellularandGeneTherapy/default.htm.”

The I-team spoke to the attorney representing Robert Hayner, who owned BioBancUSA. He tells us he has been unable to reach Hayner. In response to the judgment, he says they have “nothing to add at this time.”

(©2014 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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