Cord Blood: Part 4 - A Follow Up

DALLAS (CBSDFW.COM) - For only a few precious moments following birth, there is a once in a lifetime chance to save something typically thrown away. It's stem cells in the umbilical cord. Doctors say the cells can be used to treat up to 80-diseases. The cells could one day save  the baby or a sibling's life.

"I never dreamed my kids would need it…it was just 'if,'" says Crystal Prince.

Three years ago, the mother from Sunset, Texas sent her son Trenton's cord blood to BioBanc USA. She prepaid thousands of dollars to store it for 18 years.

"I have cried and cried for my daughter…"

Now Prince may need those stem cells for Trenton's sister, Trinity. Doctors are still trying to diagnosis Trinity's illness but they say Trenton's stem cells may hold the answer.

"It's a piece of hope I hold on to with that cord blood. If that cord blood is gone, that hope, that help, that chance is gone."

But Prince couldn't get BioBanc to send her the blood…or answer her cry for help.

And Prince wasn't alone -- other families say the also began wondering  what had happened to BioBanc.

"My first thought was…this potential lifesaver for him has disappeared," said Larry Edwards, whose family  banked blood with BioBanc several years ago.

Edwards lives in Monterey, Calif., near the headquarters of the company. CBS 11 traveled to BioBanc to get answers. But what was once the main office has shut down. And no one answered the door to an office in the back of the building.

CBS 11 learned that the Food and Drug Administration has not inspected the blood bank since 2009., and that remained the case even after we started asking questions. However, the state of California did respond, automatically revoking BioBanc's license, citing numerous violations.

"The worst part for me is feeling what the customers are going through now," said Andy Anderson, one of several former sales representatives for BioBanc who saw our story. "You feel sort of responsible because you're out there promoting the company, not knowing it was in such shambles," Anderson said.

Anderson worked for BioBanc which is owned by Robert Hayner. Hayner is the CEO and founder.  We've repeatedly left messages for Hayner  and even visited his home in California, but he's never responded to us.

CBS 11 has learned that, even as recent as 2010, Hayner's sales reps were still out marketing BioBanc and handing out certificates to some doctors which read: "LIFETIME GUARANTEE All CordBancUSA clients are recipients of our service commitment to provide quality cryopreservation of their stem cells. If your cells are not viable for transplant, CordBancUSA will refund all fees paid and an additional $25,000." CordBancUSA is another name for BioBanc USA.

"It's not worth the paper it is printed on….," Anderson said. "We were misled into the quality of the company, product and leadership. And we're disseminating that message to clients and physicians," he said.

Another former sales representative tells CBS 11 she, too, feels bad. She says she was at the airport, preparing to fly home after promoting BioBanc in another state, when she and the rest of the sales reps received a text about an important conference call.

Shortly afterwards, she says, Robert Hayner called to say he was laying them off. She says she is still owed the travel expenses from that trip. In fact, she says she, Anderson and several other sales representatives are owed more than $200,000 in back pay.

By July of 2010, they had all received a layoff letter in which Hayner wrote, "We have all fought valiantly to make this the little company that could."

Despite the company's failings, CBS 11 has obtained a credit card statement that shows BioBanc was still charging customers as recently as June of 2011.

"They know the company is not going to be around and they continue to…deceive folks and try to make more money for themselves," Anderson said.

The company had also been without a medical director for about eight months, which should have prompted it to transport the stored blood to another facility with an approved medical director on staff.  That, however, did not happen until CBS 11 began investigating.

Today the BioBanc tank containing customers' stem cells is in Los Angeles. The California Department of Health transported it to Family Cord, another blood banking facility.

Family Cord is now testing samples from the tank to see if they are viable. This should give customers some idea about the safety of their blood. Family Cord expects to conclude those tests by the end of this year, providing much-needed answers for parents.

"It's a terrible thing and you feel bad to be affiliated with the company whatsoever," says Anderson.  "These families need some answers. Their child's lives are at stake as a result."

Although Robert Hayner has still not contacted CBS 11 to comment on the series of stories we've reported.  Jim Swallow, who identified himself as BioBanc's treasurer, told CBS 11 by phone he was in the new BioBanc headquarters. It's apparently in the back office of the building where Allen and CBS 11 visited this summer.

Swallow says BioBanc is "still an active company in the State of California." He says he and Hayner are now working to revive the company with '115 owners.'

"BioBanc is trying to raise investment funds to restart," Swallow added. When asked him how the company could prove that the customers' stem cells are viable, he said he would have Robert Hayner contact CBS 11.  He also said he would tell Hayner CBS 11 is looking for more information about what happened to the money his former employees say he owes them.

As of December 14, CBS 11 still has not heard from Hayner.

MORE - Part One – Understanding The Benefits
MORE - Part Two – Searching For Answers
MORE - Part Three - A Statewide Alternative