New Zealand: Where Health Scam Companies Get Stock Exchange Listings

By Richard Smith

To start in a surprising but appropriate place, here are four video segments about stem cell heath scams from CBS, last year. If you don’t have time for 20 minutes of video, then at least look at this (just over a minute), which should give the basic idea.

These scams are loathsome, preying on the old, the sick and the desperate.

Back in 2008, the UK’s New Scientist magazine had a helpful article about what it called “stem-cell scams”:

If you or a loved one is desperately ill and considering treatment with stem cells, here’s a document you definitely should read: a newly released guide (pdf) from the International Society for Stem Cell Research to help patients negotiate the minefield of clinics claiming to be able to cure all manner of ills.

Section 11 of that PDF (“What should I be cautious about if I am considering a stem cell therapy?”) gives a list of red flags:

This is not a comprehensive list but some major warning signs include:

Claims based on patient testimonials. Patients want to believe so much that a treatment is helping them that they can convince themselves that it has. They may even have experienced some recovery unrelated to the treatment. Unless there has been carefully evaluated clinical research it is very difficult to know what is a true effect of the treatment and what you can expect.

Multiple diseases treated with the same cells. Unless the diseases are related, such as all being diseases of the blood, different diseases, such as Parkinson’s disease and heart disease, would be expected to have very different treatments. Also, you want to be treated by a doctor that is a specialist in your disease.

The source of the cells or how the treatment will be done is not clearly documented. This should be clearly explained to you in a treatment consent form (see question 8). In addition, there should be a ‘protocol’ that outlines the treatment in detail to the medical practitioner. The protocol is the ‘operating manual’ for the procedure. While it may not be made available to you automatically, you should be able to request this. For a clinical trial or experimental treatment, protocols should have been reviewed for scientific merit by independent experts and approved by an ethics committee to ensure that the rights and well-being of the participants will be respected. Ask who has approved this protocol and when the approval expires.

Claims there is no risk. There is always risk involved with treatment. Information about the possible risks should be available from preclinical or earlier clinical research.

Now it’s time to jump to the Antipodes, where stem cell cure promotion is rife, and work through that list.

Claims based on client testimonials Let’s start with patient testimonials. Here is the rivetting story of Shauna MacDonald, via

Shauna is a beautiful 53 year young mother of two from the Gold Coast in Australia.

Since 1992, the day her youngest daughter turned two, Shauna was diagnosed with a double whammy: a brain tumour and Hashimoto’s Disease.

After a complicated and dangerous operation to remove the tumour, Shauna recovered, only to be hit soon after with another autoimmune disease, Multiple Sclerosis.

For the last dozen or so years, Shauna has battled to stave off the devastating effects of MS.

By early 2009, the symptoms were at their worst…Shauna was in a wheelchair, living in what MS people call a ‘mental fog’ and her whole body was systematically shutting down.  Her eyesight had deteriorated to its lowest ever level, the whole right side of Shauna’s face had  shut down, her taste was gone and her throat was paralysed on one side.  She was severely unbalanced physically and the mental strain was showing its long-term effects.

Then came a simple phone that changed her life.

Oh, do tell…

Shauna was contacted by long-time friend Bruce Lahey, Honorary Director of the Adult Stem Cell Foundation who encouraged her to try stem cell enhancing products that the foundation had sourced.

Within four days, Shauna’s eyesight had stabilised and for the first time in 15 years Shauna was seeing in ‘single vision’ as opposed to seeing ‘double’. Her eyesight progressively improved to the point where her prescription glasses were now of no use and ‘fine print’ had come into focus.  It was nothing short of Miraculous!

Now seeing better and more clearly, Shauna’s world changed. She began to notice small things at first, then major changes followed. She seemed to be ‘switching back on’ and was ‘with it’ more of each day. Her speech improved drastically and her cognitive processes began to improve. Seeing and thinking more clearly led to walking without wobbling.

Shauna’s whole family has shared in the joy of having Shauna back with us! She is now walking everyday with her husband Neil and their dogs. (This confused the dogs…they were so used to her being in the wheelchair) She is cooking again and breaking out the sewing gear…both of which had been virtually eliminated from Shauna’s life because she had lost dexterity strength In her hands and poor eyesight.

To say we as a family are delighted is a gross understatement!

I should think it is. Shauna seems to crop up all over the place, by the way: written up by naff web newspapers in Queensland, and by a fluffhead “naturopath/journalist” in a New Zealand blog. It’s almost as if there was a bit of a PR campaign underway…

Anyway, Shauna’s story is definitely a testimonial.

Multiple diseases treated with the same cells. At Colostrum Immunity we find the harrowing story of Janelle, who seems to be bent on self destruction. But there’s no need to stop with inclusion body myopathy; in their testimonials section we find a remarkable list of sometimes misspelt afflictions and symptoms that have been cured or at least alleviated by stem cells:

  • Parkinson’s symptoms
  • fibromayalgia pain
  • Chrons disease
  • Irritable Bowel Syndrome
  • Stomach problems
  • Headaches
  • Endometriosis
  • Inflammation
  • Multiple sclerosis
  • and so on. That will do for ‘multiple diseases’, I think.

The source of the cells or how the treatment will be done is not clearly documented. These NZ sites have pretty much skipped that part: they just want you to order the “meds” from the sites! Here is Stem Cell Enhancing Products’ order form , and here is Colostrum Immunity’s (with an email address too).

Claims there is no risk. In fact, neither of these sites is claiming to be performing clinical trials at all. They are just flogging the pills! So neither site has anything whatsoever to say about risks.

This stinks. But there are a couple of leads to follow. Both Stem Cell Enhancing Products and Colostrum Immunity web sites carry the following text in their banners: “Our Products are endorsed by the Adult Stem Cell Foundation”. We have a name, Bruce Lahey, to follow up on, too. While we’re at it, let’s take a note of the “New Image” branding from that email address and see if we spot it again.

Well the Adult Stem Cell Foundation, (web site), of Gold Coast, Queensland, isn’t exactly hiding away, and Bruce Lahey is its Executive Director. The Australian tax office seems to have fallen for all this baloney, and given them a tax break.

I haven’t checked whether Adult Stem Cell Foundation really is a registered charity in Queensland. I didn’t spot a ref number, and the Queensland Charities Register apparently requires you to know everything about a charity (including its charity ref number), before you can find any info out about it (ahem, info such as its charity ref number!). I assume, though, that if the Tax Office fell for it, the Charities registrar did too, and sooner. Or both registrations are fake, though I doubt it.

At any rate, this seems to be an Australian charity that operates as an endorser for New Zealand scams. Ugly. I think the Queensland Charities Register and the Australian tax authorities might have some explaining to do. And I’m sure the Australian Competition and Consumer Commission (ACCC), who run the SCAM Watch site over there, ought to be interested too.

Finally, let’s have a quick look for New Image. First we find this, which might give some idea of the intended scope of the operation. Their NZ contact page leads us to New Image International Limited at 19 Mahunga Drive, Mangere Bridge, PO Box 58 460 Botany, Manukau 2163, New Zealand. Looking up the address 19 Mahunga Drive at NZ Companies Register we find this lot. Amongst them, New Image Group seems to be the master, with its own web site and, get this, its own listing on the NZ exchange.

It’s a pity the NZ listing authorities didn’t read New Scientist before they let that one through.

There do seem to be some actual medical practitioners peddling this stuff, too, so the New Zealand and Australian medical regulators, if there are any, have a busy time to come.

You can get an idea of what the US drug regulator, the FDA, thinks of stem cell treatment peddlers on its home turf from this recent investigation (as you will see, the detail of the ‘treatments’ is even worse than what is going on in NZ, actually):

A Las Vegas man who purports to be a retired physician and allegedly caused over 100 chronically ill patients to undergo experimental stem cell implant procedures and investors to pay him large amounts of money, has been indicted on federal mail and wire fraud charges, announced Daniel G. Bogden, United States Attorney for the District of Nevada

According to the Indictment, from about January 2005 to the present, Sapse allegedly devised a scheme to defraud patients and investors by claiming to have developed a novel medical procedure involving “stem cells” that would cure or improve certain severe, incurable diseases, such as multiple sclerosis and cerebral palsy. Sapse purports to be a retired foreign physician, but Sapse has never been licensed by the State of Nevada, or any other state, to practice medicine. Sapse formed Stem Cell Pharma Inc., a Nevada corporation, in May 2005 allegedly to create the false impression that he operated a legitimate pharmaceutical company. Sapse also controlled several websites and issued dozens of “press releases,” which promoted a novel procedure that Sapse claimed to have developed to extract stem cells from human placentas. By misrepresenting his credentials, the nature of his treatment, the source of his “stem cells,” and the adverse effects suffered by previous patients, Sapse convinced chronically ill patients to undergo experimental implant procedures and convinced investors to pay him large amounts of money without knowing the short- or long-term effects of the implant procedure he was promoting.

As we see, New Zealand’s extra twist on this is that in NZ you don’t even have to pretend to be a doctor…

In the same way that NZ company incorporation laws facilitate tax fraud in Russia, illegal arms deals, and $400Bn moneylaundering by Wachovia, New Zealand’s business and medical regulation seems to permit end-runs of the FDA’s protections against fraudulent treatment.

Or perhaps the NZ authorities are just waking from a long sleep and starting to catch up. “NZ unable to help international agencies combat fraud”, says the headline on a recent NZ Herald piece on financial scams. That sounds gormless: sort your laws out so you can help, then.

The NZ authorities should sort the quack cures out too, otherwise one might as well add the FDA to the already long list of overseas regulators and agencies that have cause to get mighty irritated with New Zealand’s regulatory environment.

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  1. wunsacon

    Thanks, Richard. You’ve so dispelled the image I had of NZ as a low-corruption state (according to the one or two surveys I’ve read in the past) that I doubt I’ll spend any tourist dollars there now either!

  2. chris

    New Zealand also has a fine climate, beautiful people, awesome scenery, excellent agricultural/grazing land, and high interest rate CD’s for those who do not quite feel that sub 1% offerings from U.S. banks are all that grand.

    And blaming New Zealand for Wachovia’s money laundering seems like a stretch when it is Bush/Barack and their minions of filth that facilitated the criminality and did not/will not prosecute.

  3. What ever happened to the hippocratic oath?

    Some good stuff going on here so hopefully people avoid the need to chase false treatments.

    Patient, doctors encouraged by ALS trial
    (CNN) — A little more than two years ago, Ted Harada felt his left
    leg weakening, and he found himself quickly running out of breath.
    Doctors first thought he had asthma, but in May 2010 they told him he
    probably had ALS, or Lou Gehrig’s disease.

    In August 2010, doctors confirmed Harada, then 38, had the fatal
    disease, and he knew it was progressing.

    “Every month they [doctors] could see deterioration,” Harada said.

    ALS patients lose muscle function in the lungs until they can no
    longer breathe. Most people with ALS die from respiratory failure
    within three to five years of first symptoms, according to the
    National Institute of Health. The disease causes nerves to wither and
    the lungs to stop working. About 10% of ALS patients live 10 years or

    Harada joined a clinical trial at Emory University in Atlanta, where
    doctors were injecting neural stem cells — the precursors to nerve
    cells — into the lower spinal cord of ALS patients.

    Before the procedure, Harada walked with a cane and would get winded
    just by walking to the mailbox. He had to quit his job as a manager
    for a shredding company. He was so tired he couldn’t play with his
    three children. He was too weak to pick up his youngest child. He
    couldn’t even open a Ziploc bag.

    Harada hoped the treatment would help, but he didn’t expect it to.
    However, two weeks after getting the stem cell injections in March, he
    says he started to feel better.

    “It’s been nothing short of miraculous,” he says. “I cannot begin to
    explain the difference it has made.”

    He hasn’t touched his cane in months, he says, and his breathing has improved.

  4. devsterd1

    I think Matt’s church analogy is absolutely appropriate on a lot of different levels. This is (hopefully) the beginning of a “movement”, not an “organization”. Anarchy in the Spanish sense, not the Balkan sense. The lack of demands……what the hell could you really ask for? It’s not a hostage situation. Everything’s going wrong at this point. If you make a list you’ve limited your demands. No list demands everything. It’s gettin’ pretty damned abstract and that’s an awful appropriate weapon to use against a hierarchy.

    1. devsterd1

      I have no idea how that got posted here when I was reading and commenting on the Occupy Wall Street Article which, BTW, is really quite excellent and does deserve your prompt attention……. I guess this is just another reason not to use your real name on the internet.

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