Physician tied to UCI fertility-fraud scandal agrees to plea to tax fraud

A physician tied to the 1995 UC Irvine fertility scandal involving the switching of frozen embryos of women without their knowledge has agreed to plead guilty to tax fraud in the case, according to newly filed court papers.

Decades after fleeing to Chile in the midst of the scandal, Jose Balmaceda appeared last week in a courtroom at the federal courthouse in Santa Ana. Balmaceda signed a plea agreement on Aug. 11, and surrendered to law enforcement on Feb. 28, according to the U.S. Attorney’s Office.

As part of his plea agreement, Balmaceda admitted that he under-reported his taxes in 1991 and 1992, as part of a scheme in which he and other doctors at the UC Irvine fertility clinic took cash from some clients and didn’t report the income.

In 1995, the Orange County Register reported that Dr. Ricardo Asch, along with Balmaceda and Sergio Stone, had taken women’s eggs without their permission and given them to other women who later bore children from those eggs. At least 15 live births resulted from the improper transfers, and the clinic was shuttered following the egg-theft scandal. The Register won a Pulitzer Prize for breaking the story.

While stealing human tissue was not a crime at the time, an audit determined that nearly $1 million in clinic income had not been reported. That was believed to include tens of thousands of dollars in cash payments from patients that were allegedly pocketed by doctors.

A federal grand jury indicted Asch, Balmaceda and Stone on multiple charges of mail fraud and income-tax evasion. Stone was convicted in 1997 and fined $50,000. But Asch and Balmaceda both fled the country.

It isn’t clear from court records what Balmaceda has done in the decades since fleeing to Chile in the midst of the scandal. Balmaceda’s surrender was the result of negotiations between prosecutors and his attorney, according to the U.S. Attorney’s Office, and he is currently out of custody on a $750,000 bond.

Balmaceda’s change of plea hearing has been set for March 25, court records show.

U.S. Attorney spokesman Thom Mrozek said the case against Asch remains active but his office could not “discuss any efforts to extradite him or other means to secure his appearance in federal court.” Asch’s attorney, H. Dean Steward, said Asch has lived outside the United States for many years, adding he was surprised to see the court action related to Balmaceda.

After fleeing the United States, Asch reportedly resumed his practice in Mexico City and in his native Argentina.

According to previous filings, Argentine officials detained Asch at one point on a United States extradition request. Instead of sending him back to the United States, Argentine officials tried Asch under Argentinian law, found the statute of limitations for the charges had lapsed and dismissed the case.

Asch was later arrested in Mexico, but a judge cited the acquittal in Argentina and released Asch rather than extradite him to the United States.

In 2018, Asch attempted to have his federal case in the United States dismissed, arguing it constituted double jeopardy following the acquittal in Argentina, court records show. A federal judge in the United States denied that request.

While the criminal case related to the fertility scandal has stretched on for years, patients filed more than 150 lawsuits, resulting in the university paying out more than $27 million in settlements.

Source: Orange County Register