Same story, different version?

Molly Ball

Friday, Nov. 25, 2005 | 7:52 a.m.

It was an exciting opportunity to get in on the ground floor of a promising pharmaceutical company. Or so Carole Aronin thought.

"The project involved treating children with HIV for depression in Romania," Aronin said. "He claimed the children were flourishing."

He was an aging Romanian scientist named Dr. Alfred Sapse, and he said a wonder drug called Virucort was curing the Romanian children.

Aronin gave $22,000 to Sapse over about three years. But last year, amid mounting doubts about Sapse's claims, she concluded she had been taken for a ride. Today, Aronin doubts there were ever any Romanian drug tests.

"The guy's a fraud," said Aronin, a Las Vegas real estate agent. "I know I'm not getting my money back, but he shouldn't be allowed to rip off any more people."

Aronin is one of several people who claim Sapse defrauded them to the tune of hundreds of thousands of dollars. They say he is a con man who has been operating with impunity for decades.

But they have not stopped Sapse, who at 80 years old is starting a new project aimed at bringing a medical treatment of questionable merit to the people of Nevada.

Sapse is currently collecting petition signatures for a proposal to legalize stem-cell transplants in Nevada, even though such a procedure has not undergone medical trials or been approved by the federal government. State and federal officials said they are not familiar with Sapse or his recent work.

One of the people who claims Sapse defrauded him has taken the doctor to federal court and, in January, won a partial judgment that found Sapse liable but did not award damages.

Jack Ferm, a former Las Vegas paralegal who now lives in Utah, said he did legal work for Sapse starting in 2001. Sapse at the time was facing litigation from a former partner, which eventually resulted in Sapse leaving that company and starting a new one.

Ferm's lawsuit claims he essentially financed Sapse's operation until late 2003, based on Sapse's claim that a California pharmaceutical company had signed a letter of intent promising to pay $25 million for his anti-AIDS drug, Virucort.

But the deal never went through. When Ferm contacted the drug company, Costa Mesa-based Valeant Pharmaceuticals, he was told no such promise was ever made, according to the lawsuit, which includes an affidavit from a top Valeant official.

"Alfred Sapse has lived a life without remorse or conscience, consisting of one fraudulent scheme after another," one of Ferm's court filings in the lawsuit states.

"He is a predator living off unsuspecting investors, swindling them out of their money, and in some cases their life savings, with various schemes and lies," it states. Ferm claims he lost about $1.4 million in money and properties to Sapse.

Sapse, saying he would not dignify Ferm's allegations with a response, called Ferm "a pest" who has a habit of frivolous litigation.

It is true that Ferm has a penchant for lawsuits. He has brought 10 cases in state court and another five in federal court. In one case, he sued the judges of the bankruptcy court for not allowing paralegals to collect the same fees as lawyers. Most of the cases filed by Ferm have been dismissed.

"I'm not going to engage in a spitting contest. I am a scientist," Sapse said. "I prefer to continue my work. I'm not in business to defend myself against scum."

In legal filings, Sapse, representing himself, has offered essentially the same rebuttal to Ferm's claims, attacking Ferm without refuting the substance of the charges. "The suit is designed to harass and vex the defendants," one of Sapse's filings states.

Sapse claims he still is working on Virucort. He said a major New York pharmaceutical company, which he would not name, was interested in using the drug to treat a side effect of AIDS medications.

To Ferm, Sapse appears to be up to his old tricks. Ferm contends that Virucort and other drugs Sapse has induced people to invest in are all versions of Gerovital, a supposed wonder drug that surfaced in the 1960s. Its active ingredient is procaine, also known as Novocain.

In the 1970s, Sapse was instrumental in convincing the Nevada Legislature to legalize Gerovital even though it was not approved by the federal Food and Drug Administration.

"It's all the same drug," Ferm said. "He touts it for the cure of whatever is the 'in' disease at that time. Now he's trying to do the same thing with stem cells."

Francine and Stanley Nelson, retirees in their 80s who live in Henderson, also say Sapse took advantage of them. They agree with Ferm that all of Sapse's so-called cures have merely been versions of procaine -- and say they had a laboratory analyze a Virucort pill to prove it.

But they do not agree with the mainstream scientific opinion that Gerovital is modern-day snake oil. They say they have been taking the drug, which they get from a local supplier they refuse to name, for 10 years and are in perfect health as a result.

"Sapse is a con man," Francine Nelson said. "But the pill really works." (Gerovital is still legal in Nevada -- and still banned by the FDA, which may only regulate substances involved in interstate commerce. Numerous studies over the years have not shown Gerovital to have any therapeutic effect.)

The Nelsons say Sapse took them for thousands of dollars, but would not disclose the exact amount out of embarrassment.

"We all got stock certificates written in Romanian," Stanley Nelson recalled. "But it never got off the ground. There were always more problems."

Sapse always insisted the big payoff was just around the corner, the Nelsons and others said. But every time it was supposed to happen, another obstacle would crop up and Sapse would demand more money.

The Nelsons said Sapse took them and other investors to a medical conference he staged in Europe, where supposedly eminent scientists bolstered Sapse's claim that diseases could be cured by blocking the hormone cortisol. Another conference was held in Las Vegas at the Mirage.

They said they were part of a group of seven investors who together gave Sapse about $125,000. Another investor, Albert Young, said he alone gave Sapse about $250,000 before becoming disillusioned

When, in 2004, they tired of the delays and stopped giving Sapse money, he cut off all communication with them, they said. They suspect the entire project was a sham and Sapse merely used their money to pay his own bills.

Jim Grace, a political activist and businessman, said he was involved with Sapse in the mid-1990s. He became interested when he heard the drug could cure his daughter's juvenile diabetes.

"Whatever disease you happened to be concerned with, they would tell you that the drug would cure it to get you in," he said. "That's how they got investors. But everything's the same -- it's all Gerovital."

Grace said he felt lucky that he only lost about $5,000 to Sapse, in the form of bad checks for consulting work. He never invested in the company or gave the pills to his daughter, Grace said.

Ferm's lawsuit asks for $4.5 million in damages from Sapse, who has filed for bankruptcy. Ferm said the point is not to get a payoff, which he does not expect, but to cripple Sapse's operation so he cannot continue.

"I'm never going to see a dime, but at least I can try and stop him," Ferm said. "He's been doing this for 30 years. I decided I had to stop him from hurting anyone else."

Molly Ball can be reached at 259-8814 or at molly@lasvegassun.com