Superior Healthcare stem cell clinic to pay $250K+ in AG settlement

State regulators are starting to catch up with stem cell clinics and Georgia is a hot spot at the moment with a firm formerly known as Superior Healthcare now getting a large monetary hit. It was just a couple of weeks ago that we heard that a Georgia court in a different case sentenced a stem cell clinic traveling salesman to prison. The term? Two hundred and two years of jail time for impersonating a physician and elder abuse.

The civil case settlement of Georgia State AG Chris Carr with Elite Integrated Medical, which is the new name for Superior Healthcare, raises some important issues and questions.

Justin  Paulk, a defendant in a recently settled suit by Georgia AG Carr for alleged stem cell-related activities. The firm denies any wrongdoing.

Johnny Edwards of The Atlanta Journal Constitution reports on a settlement reached between the Georgia AG Carr and the stem cell clinic firm for almost $300,000. This may sound like encouraging news for those of us promoting science-based regenerative medicine. However, it’s complicated. Edwards rightly points out that this is actually a low figure since the state AG was seeking millions.

The Edwards piece is entitled, “Stem cell clinic that made millions off injections will pay back less than $300K.”

Georgia AG Chris Carr
Georgia AG Chris Carr is taking on stem cell clinics.

Georgia stem cell clinic on my mind: fka Superior Healthcare

What happened? Edwards writes:

“A state lawsuit filed in September 2020 against a Sandy Springs-based stem cell clinic chain sought millions of dollars in penalties, accusing the company of reaping at least $6.4 million in gross sales by persuading elderly and disabled patients to pay for dubious pain cures…Georgia Attorney General Chris Carr’s office announced this week that Elite Integrated Medical, formerly Superior Healthcare Group, and owner/ manager Justin Paulk will pay $287,631 under a settlement agreement.”

It’s not clear why the settlement was relatively so low with more than $6 million in question.

The firm reportedly hasn’t operated as a stem cell clinic for almost three years. For that reason, perhaps there’s not much there to recoup relative to the millions that customers allegedly paid over the years?

As part of the settlement, the defendants also admit no wrongdoing. They will be barred from being active in the regenerative space though.

About half of the settlement will go to former customers of the clinic.

More action from Georgia to come?

I’ve written before about steps taken by Georgia AG Carr, including when he first filed suit in this case: Georgia AG sues clinics & owner Justin Paulk.

Yet another case in Georgia is still pending per Edwards’ article:

“The attorney general still has a separate lawsuit alleging false advertising pending against Superior’s founder and operator of its Canton location, licensed chiropractor Steven D. Peyroux, as well as Brent J. Detelich, a former chiropractor who was once convicted of health care fraud in Pennsylvania. That case was filed jointly with the Federal Trade Commission in federal court, with a hearing on summary judgment motions scheduled in March.”

Other states have cases ongoing as well. It’s good that states are doing more but state medical boards have still been disappointingly quiet, including here in California. We’re the state with the most unproven stem cell clinic firms too.

Further, as I’ve said before the FDA should start issuing civil penalties (like the one in this Georgia case) to hundreds of the riskiest non-compliant clinics across the U.S. There’s little downside to this and it would be a powerful deterrent.

So is the Georgia AG settlement here a net positive despite being on the low side? Where are the rest of those reported millions of dollars?

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