Derges, a 63-year-old Republican who was elected to the state House in November, now faces 20 criminal charges, including wire fraud and distribution by means of the Internet without a valid prescription, a federal grand jury indictment unsealed on Tuesday revealed.
“This defendant abused her privileged position to enrich herself through deception,” said U.S. Attorney Tim Garrison in a statement on Monday. “As an elected official and a health care provider, she deserves to be held to a high standard.”
Stacie R. Bilyeu, Derges’s lawyer, said her client has pleaded not guilty and said grand jury indictments are “one-sided.”
“The indictment contains mere allegations and those allegations have yet to be proven,” Bilyeu said in an interview with The Washington Post.
Derges, a licensed assistant physician from Nixa, Mo., has run Ozark Valley Medical Clinic since 2014, and operates three locations in southwest Missouri. Starting around November 2018, Derges began distributing amniotic fluid products she got from University of Utah, according to court documents, which she marketed as “Regenerative Biologics.”
Derges claimed her Regenerative Biologics stem cells could treat patients suffering from “tissue damage, kidney disease, chronic obstructive pulmonary disease (‘COPD’), Lyme Disease, erectile dysfunction, and urinary incontinence,” according to the indictment.
But the amniotic fluid was “acellular,” meaning it did not contain stem cells or any other cells, federal investigators found.
According to emails reviewed by investigators, Derges received a message in March 2019 from the University of Utah’s director of cell therapy and regenerative medicine who said “there were no live stem cells in [platelet rich plasma] or amniotic fluid.”
Despite that warning, she continued to run promotional seminars and market her product to patients as containing stem cells, according to federal prosecutors. Court documents said she charged her patients $950 to $1,450 per 1 ml, about four to six times the amount she paid for the amniotic fluid. In total, Derges’s patients paid her approximately $191,815.
Derges also claimed the treatment could cure covid-19 and promoted it on Facebook. On April 11, 2020, Derges posted she had an “amazing treatment” that “stands to provide a potential cure for COVID-19 patients that is safe and natural,” according to the indictment.
“All of the components of the God given Amniotic Fluid: Mesenchymal Stem Cells (progenitor cells which are baby stem cells: can become any tissue they want); cytokines, exosomes, chemokines, hyaluronic acid, growth factors and over 800 proteins work together to create a human being: the emphasis on the lungs,” she wrote.
The charges against Derges go beyond the amniotic fluid sales. Despite being the only assistant physician at her clinics certified through the Drug Enforcement Administration to prescribe medication, it was “standard practice” that the other assistant physicians would see patients and later tell Derges which controlled substance to prescribe, according to the indictment. Derges would then send in the prescriptions electronically without evaluating the patient herself, which prosecutors said constitutes wire fraud.
Federal investigators also said Derges lied to them twice. She told agents the “amniotic fluid allograft she used in her practice contained mesenchymal stem cells,” which she knew “was false,” the indictment said. She also allegedly told agents she did not use the treatment on a patient for urinary incontinence, which she knew “was false,” the indictment said.
The state lawmaker faces eight counts of wire fraud, 10 counts of distributing Oxycodone and Adderall online without valid prescriptions, and two counts of making false statements to federal agents, federal authorities said. Derges could face extensive jail time. One count of wire fraud has a maximum sentence of 20 years in prison.
In a Facebook post on Monday seemingly referring to the charges, Derges posted an image depicting David and Goliath.
“Lies and twisted words mean nothing. Truth and righteousness mean everything,” she wrote. “God stood with David, I have the faith that He will stand with me against the Goliath that I face today — his sole purpose is to destroy. Please believe in me and please keep praying for me.”
Derges, who beat out three other Republican candidates in the primary for Missouri House District 140 and ran unopposed in the general election, had won local and national awards before her political career. In 2017, she received the National Jefferson Awards’ Jacqueline Kennedy Onassis Award for outstanding public service benefiting local communities. In 2018, the Community Foundation of the Ozarks named her Humanitarian of the Year for her work with a mission clinic in Springfield, Mo.
Given Derges’s position as a health-care provider and lawmaker, her actions were a “betrayal” of trust, Special Agent in Charge of FBI Kansas City Timothy Langan said in a statement.
“Her actions erode the very core of our confidence in a system we rely on,” Langan said. “Derges vowed to do no harm as a health care professional and was elected to serve the people, not deceive them. She used her position for personal gain and damaged the public’s trust.”