A US businesswoman from Arizona has been convicted of selling unapproved stem cells over a period of several months.

Fredda Branyon, the former owner of Global Laboratories, pleaded guilty and admitted the stem cells were manufactured without the necessary approval from the US Food and Drug Administration Authority (FDA).

To create the stem cells, Branyon purchased umbilical cords from a midwife in Texas who told parents that their babies' tissue would be donated. Branyon then hired a researcher to extract the stem cells which were sold to an unnamed buyer, who claimed to be a physician and a stem cell research director at a medical school, the plea-bargain states.

The stem cells were then transported to that buyer labelled as products to be used for research only, although Branyon admitted in court she knew they would be used in humans. Prosecutors believe the stem cells were used to treat patients with chronic illnesses.

Branyon was accused of intentionally risking the public's health for profit, which stands at $300,000. She was charged with one count of conspiracy, ten counts of mail fraud using non-FDA-approved drugs and one count of introducing an unapproved new drug into interstate commerce.

Under federal law, stem cells for use in humans are treated as controlled drugs and must receive regulatory approval. 'There are very, very specific rules regarding your ability to do things in terms of clinical use of a cell therapy', said Charles Cox, professor of paediatric surgery at the University of Texas and director of paediatric trauma at the Children's Memorial Hermann Hospital, Texas.

Commenting on the case, Professor Cox, who is exploring experimental stem cell therapies through FDA-approved clinical trials, said the use of non-FDA approved stem cells in humans was 'illegal, unsafe, and probably biologically invalid'. He said that he had not heard of a black market trade in umbilical cords to produce stem cells until now.

Branyon, who has agreed to cooperate with the ongoing investigation, has now been released on bail until she is sentenced in November. She faces a three-year prison sentence and a fine of up to $10,000.