21st Century Snake Oil

This story was originally published on April 18, 2010. It was updated on Sept. 9, 2010.

Con men used to travel town to town hawking medical remedies said to be made of Chinese snakes. "Snake oil" was useless and dangerous. So the FDA was created to put a stop to it and other food and drug scams.

But today, quack medicine has never been bigger. In the 21st century, snake oil has been replaced by bogus therapies using stem cells.

Stem cells may offer cures one day, but medical charlatans on the Internet are making outrageous claims that they can reverse the incurable, from autism to multiple sclerosis to every kind of cancer. Desperate people are being bilked out of their life's savings.

As we first reported last April, we've been looking into this surging crime and we found there is no better window on how it works than the practice of a man who calls himself doctor, a man named Lawrence Stowe. Stowe was unaware that some of his patients had been working with "60 Minutes."

Web Extra: The Promise of Stem Cell Treatment
Web Extra: A Warning About Stem Cell Fraud
Web Extra: Living with Lou Gehrig's Disease

One of those patients is Steven Watters, a college administrator in Lufkin, Texas, who, six months before we met him, received maybe the worst diagnosis imaginable: he has ALS, amyotrophic lateral sclerosis, also known as Lou Gehrig's disease.

About 30,000 Americans have ALS at any given time. And like Watters, they all will die, most within five years, as their nervous system gradually disconnects from their muscles.

"Everything just takes a little longer. I just set things up to where it requires minimal, manual effort," Watters told correspondent Scott Pelley. "Just handling personal hygiene is difficult - teeth brushing, flossing, very difficult, time consuming. So you just make the adaptations that you can and go on."

Eventually Watters will be able to move nothing but his eyes.

The same fate is ahead of Michael Martin who also has ALS. Martin has nearly lost any ability to speak, and very soon he won't be able to walk.

"I wonder what it was that your regular doctor back home told you about your disease and what your prospects were?" Pelley asked Martin.

"He said I had about two years," he replied.

No patient has ever been cured of ALS, and no patient has ever seen the symptoms reversed, even temporarily. But, still, desperate people find themselves drawn to a place that promotes the impossible: Stowe Biotherapy in La Mesa, Calif., near San Diego, which bills itself as a "medical oasis."

We asked a multiple sclerosis patient to go in with a hidden camera to hear Larry Stowe's pitch for his miracle treatment.

Stowe told our MS patient that he can reverse her disease with his program of herbs and vitamins to boost the immune system, custom vaccines and stem cell injections. Medical experts say it's nonsense but it's the same pitch that we secretly recorded again and again as Stowe claimed to reverse cancer, ALS, MS, Parkinson's disease and more.

"We're the only ones who's been able to get any body that's down here back up to here, and they stay back up to here. If we were a major pharmaceutical drug company, you know, we'd be talking about all of our research associating getting Nobel Prizes in medicine and things of that nature," Stowe said.

Larry Stowe is not a medical doctor. He claims two PhDs, but we found he only has one in chemical engineering. He had a career at Mobil Oil and holds patents in the oil industry.

But by the 1980s Stowe had taken a strange turn into pseudoscience. For a time, he promoted something called Eon Water which, he said, slowed the aging process. And by 2003, he had created the Stowe Foundation to advocate unproven stem cell therapies.

Michael Martin, one of the ALS patients helping with our story, had heard about Stowe from a friend. And before we ever met Martin, he had already given Stowe a down payment of $47,000 to start the treatment.

"When Dr. Stowe said that he could reverse this disease with stem cells, you thought what?" Pelley asked.

"Oh, I wanted to believe," Martin replied.

How does Stowe make believers of the desperate? We wanted to see.

We set up hidden cameras in Martin's home in Houston and invited ALS sufferer Steven Watters to pose as an interested patient. Stowe came on crutches; he's missing a leg which he says he lost to cancer.

Everyone in the room knew about our hidden cameras except Stowe. Stowe had claimed what he called a "permanent fix" for ALS. So we gave Watters questions to ask about Stowe's therapy.

"So is there a permanent fix from the stem cells?" Watters asked.

"Oh, yes. Yeah. You'll be able to…," Stowe replied.

"Exercise again?" Watters asked.

"…exercise again. Oh, yeah," Stowe said.

"If I opt for the permanent fix, will I avoid a feeding tube? Will it keep me out of a wheelchair?" Watters asked.

"Yeah. Oh, yeah, absolutely. We've gotten people out of wheelchairs," Stowe replied.

"Am I gonna get closer and closer to, at some point you can say, 'Okay, you're cured. You're healed from this disease'?" Watters asked.

"I believe that that is 100 percent possible. Because we've done it with other conditions. I mean, we've done it with cancer, you know, which is just a different form of tissue destruction," Stowe replied.

"Didn't your mother have cancer?" Martin asked.

"My mother had pancreatic cancer and we completely reversed her pancreatic cancer. She died cancer-free with a healthy pancreas," Stowe said.

"What will it cost me for the permanent fix?" Watters asked.

"That'll be around $125,000. 'Cause it's $50,000 for phase one; the stem cell transplant is gonna run you around $25,000; and then, we do follow up therapy after that to make sure the results hold, and that's another $50,000," Stowe explained.

Stowe told them they would have to travel to Monterrey, Mexico, for the treatment. He said his research associate there would take blood-forming stem cells harvested from umbilical cords or bone marrow and inject those cells into their spines. Those blood cells, he said, would transform into nerve or neural tissue that would reconnect with their muscles.

"Is there a stem cell fix for ALS?" Pelley asked Professor Sean Morrison, the director of the University of Michigan Center for Stem Cell Biology.

"No," Professor Morrison replied.

Morrison's lab is one of the world's leading stem cell research centers.

"So, when Stowe says he's going to take blood-forming stem cells and put them in the spinal cord to create neural cells, what do you make of that?" Pelley asked.

"You know, we study blood-forming stem cells every day in this lab, including umbilical cord blood cells, and blood-forming stem cells don't make nervous system tissue," Morrison explained.

"And then what do the injected stem cells do next?" Watters asked Larry Stowe.

"They start to regenerate your nerve tissue and repair the synapses," Stowe replied.

Stowe's incredible pitch often works because his victims have heard something about the promise of stem cells but don't really know much about them. At one time, some scientists thought that blood-forming stem cells could replace any kind of tissue, as Stowe claims. But science now knows that's wrong.

Stem cell therapy is the standard of care in only leukemia and certain, rare, diseases of the blood - nothing else. There is very early research into whether stem cells might one day help ALS patients, but nothing like the claims Stowe is making.

Dr. Morrison thinks breakthroughs are years or decades away. He says Stowe's claims are baseless.

"Classically, people are reporting three to four weeks that they begin to notice the effects," Stowe said.

"Notice the effects in three or four weeks," Pelley remarked.

"You might notice side effects in three to four weeks," Morrison replied.

"You described it as miraculous, that's what it would be," Pelley said.

"If somebody squirted some stem cells into the spinal cord of an ALS patient and they stood up out of their wheelchair and had a permanent fix, that would be miraculous," Morrison replied.

But that's what Stowe was promising in Michael Martin's living room as he weaved a pitch with lies of legitimacy.

"Are you currently working with anybody in the FDA regarding…," Watters asked.

"Oh, yeah. Yeah, we…at all levels," Stowe replied.

Even the University of Texas, he said, was planning to build a research center with a particular name. "Stowe Research Center for Regenerative Medicine in affiliation with the University of Texas. You can't find a surgeon in the world who doesn't support our approach," Stowe explained.

After hearing the pitch, Watters and Martin, working with "60 Minutes," told Stowe they would go to Monterrey, Mexico for the treatment.

We followed them there with hidden cameras, and we found Stowe's so-called research associate, Dr. Frank Morales.

In an e-mail to Watters, Morales claimed, "We have treated well over 1,000 patients without any side effects other than positive results which range from minimal to miraculous."

But we have found that Morales is improvising stem cell procedures for profit with no scientific basis. Morales is an American citizen, living in Texas, with a Mexican medical license. We got the credentials he submitted to one Monterrey hospital and found that the medical degree came from a Caribbean school that was later shut down for selling diplomas. Morales dropped out of residency training in Texas.

Morales and Stowe took our patients on a tour of the hospital where Morales was already doing stem cell procedures. He explained the techniques he uses.

"Our team will go in through a catheter and place it right up close to the brain or will go intrathecally, you know, right into the spine and do other things, you know, that are pretty aggressive," Morales said.

Mexican officials tell us stem cell therapy for ALS is not authorized. The hospital says it didn't know Morales was using stem cells and wouldn't have allowed it.

"So we could just go right in and, ok, you got your stem cells and you're outta here," Morales said.

We found one of Morales' former patients, Muna Erickson, in Michigan. She has multiple sclerosis, for which there is no cure.

"What exactly did Morales tell you about what you could expect?" Pelley asked.

"He told me that I could expect her to be up out of the wheelchair and walking," Muna's husband Keith Erickson replied.

The Ericksons are not people with a lot of money, so in desperation, they sold their home in order to wire $15,000 to Morales. The Ericksons say they arrived in a rundown Mexican clinic for a scheduled spinal injection of stem cells, but Morales gave her a stem cell IV instead.

"So, he ended up coming in and hanging an IV off the tip of her thumb that was barely viable," Keith Erickson remembered.

Muna Erickson told Pelley the IV went into the tip of her thumb.

Asked what he thought, Keith Erickson said, "I thought about taking my wife and takin' her home, but she was so set on getting these stem cells, I think she would've had a complete mental breakdown had I just boarded her back on a plane."

Asked if she got somewhat better, Muna Erickson told Pelley, "No, I got worse."

Back in Monterrey, Mexico, Morales and Stowe came to a hotel room where they met patients Michael Martin and Steve Watters. They were expecting to see another down payment, $35,000 in cash.

But that is not what came through the door. Instead, Scott Pelley walked in.

Steven Watters and Michael Martin, two ALS patients working with "60 Minutes," travelled to Monterrey, Mexico to meet Larry Stowe and Frank Morales.

Stowe and Morales said they could treat the symptoms of ALS with an unproven stem cell therapy.

"Hey, Steve, Michael. Mr. Stowe, Mr. Morales. I'm Scott Pelley. I'm with '60 Minutes.' And I'd like to ask you a few questions on the record about what you propose," Pelley said when he entered.

"Sure," Stowe replied.

"I understand that you have had patients that have stood up and walked away from wheelchairs. Who have ALS," Pelley remarked.

"There have been patients that have improved to that extent," Stowe replied.

"You reverse the condition?" Pelley asked.

"Yes," Stowe replied.

"You know, Mr. Stowe, the trouble is that you're a conman," Pelley remarked.

"Really?" Stowe asked.

"You're lying about this protocol. You've lied about your association with the University of Texas. You've lied about your work with the FDA. And now you're lying to these gentlemen about what they can expect," Pelley said.

"Now, why do you say that?" Stowe asked.

"Nobody at the FDA knows anything about any of this. And the University of Texas is not going to be starting a regenerative medicine clinic with your name on it," Pelley said.

"Really?" Stowe asked.

When we asked Stowe to back up his ALS claims, his story changed.

"Give me a Stowe Foundation patient who has ALS who has stood up out of a wheelchair and walked away," Pelley asked.

"We don't have any ALS patients. We have MS patients," Stowe replied.

"We are talking about the treatment that you have taken their money for. Is that a treatment that would allow them to stand up out of a wheelchair and walk away?" Pelley asked.

"With an ALS patient? No, we've done it with MS patients," Stowe replied.

"I don't believe that's what they understood," Pelley said. "I don't believe that's what you told them."

"Then they weren't listening," Stowe said.

"Oh, actually we were listening very carefully," Pelley said.

"Okay. Do you have the tape recordings?" Stowe asked.

"I do," Pelley replied.

"Pull them out," Stowe requested. "I want to hear them."

"I can do that," Pelley said.

And we did.

"This was your meeting in Houston just a few weeks ago," Pelley explained.

"Well, if I opt for the permanent fix, will it keep me out of a wheelchair?" Watters could be heard asking on the tape.

"Yeah. Oh, yeah. Absolutely. We've had a number of ALS patients, be able to get out of their wheelchairs," Stowe replied.

"That's not true, is it?" Pelley asked.

"The Stowe Foundation has not," Stowe replied.

"You told Steve that you were gonna keep him out of a wheelchair. That's not true either, is it?" Pelley asked.

"No, that's very true," Stowe said.

"You're going to sit here after seeing that and you're going to look this man in the face and tell him that he's gonna stay out of a wheelchair? I mean, that's cruel," Pelley remarked.

"Really? What is his prognosis if he doesn't do this?" Stowe asked.

"His prognosis is the same either way," Pelley said.

"No, it's not," Stowe replied.

"Mr. Stowe, you told these men in Houston that a cure was in your memorable phrase, '100 percent possible,'" Pelley pointed out.

"Possible. Is that a guarantee?" Stowe asked.

"The folks at home are wondering what goes through your mind when one of these men pushes a suitcase full of cash across the table to you what are you thinking?" Pelley asked.

"I'm thinking that they came to the right place if they want any hope at all," Stowe replied.

Many patients have pinned their hope on Dr. Frank Morales and his improvised stem cell procedures. Recently he injected stem cells into the spine of a 7-year-old American boy in an attempt to treat the boy's autism, a procedure with no basis in medical science. We found Morales' training is dubious. He had presented a certificate to a Monterrey hospital, showing he completed his training at Texas Tech University. But in the interview, he switched schools.

"Have you ever been licensed to practice medicine in the United States?" Pelley asked.

"I have and I worked under the University of Texas where I was at, at El Paso and came to Mexico after that," Morales replied.

The University of Texas, El Paso, has no medical school and no record of Morales as a student.

"But you have a license or had a license to practice in the State of Texas?" Pelley asked.

"Absolutely, it was an institutional license at the University of Texas, El Paso, "UTech, UTEP, so you can go there, you can find it. I mean that's simple, if you did your homework, that's lousiness. I mean on your behalf, I'm sorry to say," Morales replied.

Not only does he have no credentials from the University of Texas, we found his Texas Tech credentials are fraudulent. A Texas Tech lawyer told "60 Minutes," "Where it was obtained or manufactured I couldn't say but it was not issued by Texas Tech."

Several minutes into the interview, we watched the Stowe-Morales relationship dissolve; Morales walked out, then came back to disavow Stowe.

"Scott, yeah, you know, I think that just in the sense of, of using, you know his, you know, using him to try to bring me down. I think that that is inappropriate," Morales said.

"Well, sit down and talk to me about it," Pelley replied. Morales declined to do so.

Legal experts tell us that both Stowe and Morales have broken U.S. law, committed fraud by making a false claim - it doesn't matter that the procedure is done in another country. We wondered why the FDA is not acting against the many stem cell con artists whose Web sites are up for anyone to see. But the FDA commissioner, Margaret Hamburg, declined to talk with us on camera about any aspect of stem cell quackery.

Many experts believe that the FDA is outmatched.

"Patients need to beware," prominent stem cell biologist Larry Goldstein told Pelley.

Goldstein and researcher Doug Sipp are with the International Society for Stem Cell Research, an organization of the world's leading stem cell scientists.

Sipp is tracking bogus stem cell clinics all around the world.

"How have these operations grown, say, in the last five years or so?" Pelley asked.

"I would say the growth has been explosive. I've been tracking it closely for the past three years and I've been able to come up with more than 200 clinics that are offering some version of stem cells for some type of medical condition for which there is really no good evidence that the stem cells would be either safe or effective," Sipp explained.

Asked if all of these clinics are frauds, Sipp said, "On one end of the spectrum you have people who are doing, essentially, badly designed uncontrolled human medical experiments for profit. And then at the other end of the spectrum you just have thieves who are preying on the sick and their families."

"Now an ALS patient might say to you 'How could I possibly be worse?' This is the question you get sometimes. 'How could I possibly be worse?'" Goldstein added. "'I'm going to die in two or three years why not give it a try?' Well what if as a result of this treatment you ended up in excruciating pain? What if you managed to bankrupt your family through the use of one of these expensive unauthorized treatments so they can't take care of you properly as you decline? There are things that are worse than your current situation, I think."

The experts in stem cell research believe these procedures are at best ineffective and potentially dangerous. A study by UCLA found patients at a Chinese clinic often developed spinal meningitis. But there's rarely any mention of risk on the Web sites that offer false hope for dozens of afflictions ranging from Down's syndrome to cancer.

"One of the different things now is the power of the Internet now gives just tremendous global reach to people who in the past would be kind of the local quack," Sipp said.

"So, instead of the snake oil salesman standing in the back of a pickup truck, he can now reach every ALS patient on Earth?" Pelley asked.

"And say, 'Come to me, and I'll help you out in Mexico, or in Russia, or in Thailand,'" Sipp replied.

"What we see here essentially is Stowe on an industrial scale," Pelley remarked.

"Stowe on steroids," Goldstein said.

"Yeah, you could say that," Sipp added.

"He might as well be sticking his hands into the pockets of those people and taking the money out without even talking to them. That's how bad I think it is," Goldstein said.

"I wonder what you think when the top people in the field that you pretend to work in call you a snake oil salesman?" Pelley asked Larry Stowe.

"Comes with the territory," he replied.

We wondered what Stowe would say to the idea of giving Michael Martin his $47,000 back.

"Has he asked for it?" Stowe asked.

"I'm asking," Pelley replied.

"We'd give it back to him," Stowe said.

"Now that's a deal I'd like to make," Pelley said.

"Really? Okay, and when he continues to go downhill six months from now, and hasn't made any progress, are you going to cover the cost of his care?" Stowe asked.

"I'm not buying what you're selling," Pelley replied.

"Fine," Stowe said.

Of course, that refund never came. When we first walked into the interview we thought Stowe might not stay. But, he sat there for two hours as though, if he only talked long enough, he'd convince us.

"Thanks for sitting with us and talking to us," Pelley said.

"Now you're not running away on me, are you?" Stowe asked.

"Well, I was planning on leaving, yes," Pelley said. "I think I'm done."

"All right," Stowe said.

"Thank you," Pelley said.

"You just cost this man his life, I want you to know that," Stowe said.

"You know, I don't think so," Pelley replied.

Larry Stowe never gave up, even after his lies were exposed. When we left the room, he turned to ALS patient Michael Martin and tried to close the sale.

"We'll keep in touch, because I can tell you: you know what's gonna happen, if you don't take some type of aggressive action," Stowe said.

The scene at the hotel was the end of the Stowe/Morales collaboration. They didn't contact the patients again.

Michael Martin and Steve Watters continued to fight the progression of ALS.

"What would you like to see happen to Larry Stowe?" Pelley asked Martin.

"I don't care," he replied. "He has to live with himself."

Since our story first aired in April, Lawrence Stowe has closed his business in San Diego. We've learned that the FDA has been investigating Stowe and Morales, but the agency won't comment. Meanwhile, the ALS patients who helped us with our story are losing ground to their incurable disease.

Steve Watters had to retire from the college. And Michael Martin can no longer walk and is now on a feeding tube.

Learn more about ALSUntangled, a network of 65 clinical scientists and top neurologists who take a scientific approach to examining alternative and off-label treatment options for people with ALS.

Produced by David Gelber, Sam Hornblower and Michael Radutzky