Police investigate Cord Blood Bank of Canada after mom raises questions about Health Canada inspection

A Greater Toronto Area police service has opened an investigation into the Toronto-based Cord Blood Bank of Canada after receiving a complaint from a Burlington, Ont., woman who recently discovered the company, storing her son's cord blood, was found non-compliant by Health Canada.

Halton Regional Police told CBC Toronto they "have concerns about potential misappropriation of funds" after receiving a complaint from Juliana Vasiljevic.

"The complaint we received is that person has some concerns that service was not either fully provided or provided at all," said Det.-Sgt. Chris Lawson.

Bernadette Ellison, the CEO of Cord Blood Bank of Canada, said through her lawyer that she was contacted by an officerwho requested written confirmation that a client no longer wanted to pay the annual storage fee.As of July 28, Ellison said that was "satisfactory to the police and they have not communicated with her since."

Vasiljevic had decided she wanted to store the potentially life-saving stem cells in her son Ewan's umbilical cord blood when she was pregnant in 2009. The 42-year-old said it "felt like it was insurance" she couldn't ignore.

"What if he did get sick and I didn't do this?" Vasiljevic said. "Then I would never forgive myself, if I'd had that chance."

After some research online, Vasiljevic enlisted the services of Cord Blood Bank of Canada. She and her husband initially paid $1,100, plus the cost of shipping the blood to the lab. Up until this year, the couple has also paid a yearly storage fee of $125 plus tax.

"I felt like it was something reputable," she said. "It was across Canada so how can it be anything other than legitimate?"

When Vasiljevic first contacted the company in 2009, she said it was registered with Health Canada. But after an unexpected storage fee increase and unsatisfactory customer-service response made her uneasy, Vasiljevic followed up with Health Canada.

Vasiljevic reached out to the federal health agency in June and was told the Cord Blood Bank of Canada was inspected in 2012 and 2015, but is not currently registered.

It was across Canada so how can it be anything other than legitimate?- JulianaVasiljevic, former Cord Blood Bank of Canada client

A search of Health Canada's inspection database also showed Vasiljevic that the company was found to be non-compliant with 18 observations contrary to the Safety of Human Cells, Tissues and Organs for Transplantation (CTO) regulations.

The observations in Health Canada's report included:

• The firm "did not store or ship cells, tissues or organs under appropriate environmental conditions."
• It used unlicensed test kits for transmissible diseases.
• Its records were inaccurate and incomplete.

Health Canada confirmed to CBC Toronto that it inspected the Cord Blood Bank of Canada's lab at 20 Wynford Dr., in 2012 and 2015 and did not re-issue a registration after the second inspection.

When asked by CBC Toronto whether non-compliance of the company's lab compromised clients' samples, Ellison, through her lawyer, said "absolutely not."

Agency regulations don't always apply

Health Canada said the company can continue operating without being registered because it provided "written confirmation" that its stored cord blood is only for "autologous" use, meaning it can only ever be used by the person it belongs to.

The regulations enforced by Health Canada only apply to samples intended for use in other people.

Through her lawyer, Ellison said her company was "perfectly willing not to be able to use the stem cells for other children." As a result, Ellison said services provided by Cord Blood Bank of Canada are "completely acceptable to Health Canada and perfectly legal."

CBC Toronto spoke to another Cord Blood Bank of Canada client in Grande Prairie, Alta., who said she was never told her children's blood couldn't be used by other family members.

In fact, that potential was a selling point for Teresa Sniezek when she signed with the company in 2011.

"She said it's a match for this and that," said Sniezek. "Why would you say that if you don't want me to use it for anyone else?"

In a 2011 email to Sniezek, a company representative wrote "the advantages of storing cord blood are a hundred-fold. The stems cells are a 100% match to the baby, a 50% potential of a perfect match to the parents, a 25% potential to siblings, plus various degrees to grandparents, aunts, uncles and cousins."

She said it's a match for this and that. Why would you say that if you don't want me to use it for anyone else?- Teresa Sniezek, client of Cord Blood Bank of Canada

Sniezek said she's always paid for storage with the understanding that she could use her twin daughters' cord blood if another family member needed it.

For confidentiality reasons, Ellison would not tell CBC Toronto whether Sniezek was directly told about the change in the Cord Blood Bank of Canada's usage policy. But Ellison said all clients were informed via the company's website.

CBC Toronto could not findthe notification anywhere on the company's site as of Aug. 1.

Like Vasiljevic, Sniezek became concerned about her children's cord blood after noticing a payment issue. In June, Sniezek realized she had been overcharged on her annual $125 storage payment and reached out for an explanation by phone, email and Facebook.

She didn't hear back until a month later after CBC Toronto contacted Cord Blood Bank of Canada with both clients' concerns.

Sniezek said Ellison phoned her, saying she would refund the overcharge this time, but the annual storage cost would be higher next year. Sniezek also said Ellison assured her she was "actually the person who helped Health Canada form this inspection-regulation process for cord blood."

Ellison said she didn't tell Sniezek she was "the person," but instead said "she and other stakeholders were asked to comment on and provide input into the formation of the regulations governing cord blood banking."

Ellison said "her extensive experience in cord blood banking was acknowledged by Health Canada."

Health Canada told CBC Toronto they have "no documentation of any specific recognition given to Ms. Ellison."

Cancelling an account

After initially calling Cord Blood Bank of Canada in May about billing, Vasiljevic said Ellison called her back in June, after receiving a call from Haltonpolice.

Vasiljevic said she made it clear she wanted to cancel her account, asking for the cancellation in writing, along with assurances of what would happen to her samples.

Earlier this month, Vasiljevic received a letter from the company saying her account has been closed, but it made no mention of what would happen to her son's cord blood.

In a letter to CBC Toronto, Ellison's lawyer said Vasiljevic might not have been told, but since she stopped payment, her son's cord blood will be discarded by "a company employed by [Cord Blood Bank of Canada] to dispose of its medical waste."

Where is the cord blood bank now?

Sniezek's records show she sent her daughters' samples to the Health Canada-inspected Wynford address.

CBC Toronto spoke to the property manager at 20 Wynford Dr., who confirmed Cord Blood Bank of Canada leased space in the medical building from 2003 until May of this year. The space was used to "house specimens," the property manager said, but would not comment on why the company left the building.

Two other Greater Toronto Area addresses are currently associated with Cord Blood Bank of Canada. CBC Toronto visited both locations: 7030 Woodbine Ave. in Markham, Ont., is a virtual office, and the other is in a medical office building at 688 Coxwell Ave.

CBC Toronto could not confirm whether the company has a lab facility at the Coxwell address, but an employee answered the door to an office space at the building.

When asked about the location of the lab and her clients' cord blood samples, Ellison said "from an absolute security perspective," she would not publicly disclose the location of the lab.

What to look for in a cord blood bank

Although federal regulations for cord blood don't apply if it's only being stored for autologous use, Health Canada says there are other safeguards parents can look for if they want to have their child's cord blood stored.

In an email, Health Canada noted that Canadian cord blood banks "can attain accreditation from reputable organizations such as the Foundation for Accreditation of Cell Therapies and the American Association of Blood Banks."

CBC Toronto visited a cord blood bank at Toronto General Hospital Cells for Life with both those accreditations, as well as a registration with Health Canada.

"I really don't know anything about the company," said the company's chair, Jane Virro, told CBC Toronto. "I don't know who the owners are; I don't know where it's located."

Sniezek said Cells for Life told her the same thing when she reached out to the bank to see if she could transfer her daughters' blood there.

Nicole Brockbank can be reached at 416-205-6911 or at nicole.brockbank@cbc.ca.