Firms reach $7.8-million settlement over allegations of selling fetal tissue

Two bioscience companies have reached a $7.785-million settlement with the Orange County district attorney’s office over allegations that they illegally sold fetal tissue to companies around the world, prosecutors said Friday.

According to the settlement signed Monday, DV Biologics LLC and sister company DaVinci Biosciences LLC, both based in Yorba Linda, must cease all operations in California within 60 to 120 days. The agreement also requires the companies to admit liability for violations of state and federal laws prohibiting the sale or purchase of fetal tissue for research purposes, prosecutors said.

Also named as defendants in the settlement were company principals Estefano Isaias Sr., Estefano Isaias Jr. and Andres Isaias.

“This settlement seized all profits from DV Biologics and DaVinci Biosciences, which they acquired by viewing body parts as a commodity and illegally selling fetal tissues for valuable consideration. These companies will never be able to operate again in Orange County or the state of California,” Dist. Atty. Tony Rackauckas said in a statement.

About $7.5 million of the settlement is the estimated scientific value of a planned donation of the company’s adult biological samples, tissues and cells to a nonprofit academic and scientific teaching institution affiliated with a major U.S. medical school, according to the agreement. Prosecutors did not disclose the name of the medical school.

The defendants also will donate and transfer laboratory storage containers and equipment estimated to be worth more than $10,000.

DV Biologics will pay the county $195,000 in civil penalties.

Michael Tein, an attorney for the defendants, did not return a call seeking comment.

Prosecutors opened an investigation into the companies in September 2015 after a complaint was submitted by Irvine-based Center for Medical Progress. The anti-abortion group gained national attention in 2015 after releasing a video showing Planned Parenthood affiliates discussing the sale of aborted fetuses.

In October 2016, prosecutors filed a complaint against the companies in Orange County Superior Court alleging unlawful, unfair and fraudulent business practices.

The lawsuit accused the companies of illegally selling cells from fetal brain tissue for up to $1,100 per vial from 2009 to 2015, prosecutors said. Fetal tissue and cells were sold to pharmaceutical companies and academic institutions in Japan, China, Singapore, South Korea, Germany, Switzerland, Australia, the Netherlands, Canada and the United Kingdom, authorities said.

Langhorne writes for Times Community News.