Prosecutor: Body parts seller lied to make money

Arthur Rathburn set out to deceive people who bought diseased body parts from his now-shuttered business by not disclosing that some of the human cadavers he sold to medical professionals tested positive for HIV and hepatitis B, a federal prosecutor told a jury Friday.

The government alleges that Rathburn, who is on trial for multiple counts of fraud and related charges, bought the tainted body parts at a reduced price and then resold them to customers for medical or dental training at full cost.

Rathburn, the former owner of International Biological Inc., knew the remains had tested positive for HIV and hepatitis B but failed to disclose that to buyers through deceptive language in contracts, Assistant U.S. Attorney Timothy Wyse said during closing arguments.

“Liars don’t receive absolution from fraud just because they put a lie in a contract,” Wyse told jurors before U.S. District Judge Paul Borman. “He ignored the test results to make money. That’s deception. That’s fraud.”

Wyse said Rathburn “was flipping these remains” to make money and choosing to lie as part of his scheme to buy HIV and hepatitis B-infected bodies and human remains at a discount and then sell them to doctors and dentists.

Rathburn, said Wyse, wouldn’t make money if customers knew the body parts were infected with the diseases.

Rathburn’s co-counsel, Craig Daly, told jurors in closing arguments the federal government “has no business in this case.”

“This is a civil matter,” Daly told jurors. “(Arthur Rathburn) never violated any federal laws. This is a non-harm, no-cause contract case.”

Daly said buyers received contracts with wording specifying that “there were no guarantees” that the bodies or human remains were not infectious.

“There’s not one shred of evidence that anyone was infected,” he said.

Federal prosecutor John Neal said in his closing arguments that Rathburn’s buyers read the contract “and thought that meant they would not be receiving bodies that tested positive for HIV and hepatitis B.”

Jurors return to court 9 a.m. Monday and are expected to begin deliberations once they are given instructions from Borman.

Rathburn is charged with nine counts of wire fraud, three counts of making false statements and one count of transporting hazardous material. His trial began two weeks ago in U.S. District Court.

Federal prosecutors say Rathburn knowingly purchased body parts infected with HIV, the virus that causes AIDS, and hepatitis B and C, and sold them to buyers without informing them the parts were diseased.

Witnesses who have testified include Rathburn’s ex-wife Elizabeth, a former employee of the business who pleaded guilty in 2016 to one count of wire fraud in exchange for cooperating with the government.

When asked why she and her ex-husband did not disclose to customers that the body parts they were buying were infected with HIV and hepatitis, she said: “Because we would have lost the contract.”

Elizabeth Rathburn said her ex-husband assured her there was no problem selling the infected limbs. “He said he had an embalming process that would yield the virus inactive,” she said.

Documents provided to clients indicated all bodies and parts had been tested for HIV and hepatitis. Elizabeth Rathburn said that was “to assure the customer they were getting a clean body to work on.”

Other witnesses, including an FBI agent, said Arthur Rathburn kept a filthy warehouse with bodies stored skin-to-skin and used a crowbar to separate them. Dead insects and blood littered the floor, witnesses recalled.

Wyse said Rathburn’s customers expected they were buying human remains from a business that kept a clean facility but investigators and witnesses, who including other medical examiners, said Rathburn’s warehouse on Grinnell Street in Detroit was the “most disgusting place.”

bwilliams@detroitnews.com