An umbilical cord blood banking company with a massive storage facility in Tucson paid kickbacks to doctors to recommend its services, which are of little medical value, according to a lawsuit filed Tuesday by the Arizona Attorney General's Office.

The case alleges CBR Systems, also known as Cord Blood Registry, violated Arizona's Consumer Fraud Act by misrepresenting medical support for storing the blood, not disclosing kickbacks paid to doctors who recommend the service, and other violations. The company preyed on expecting parents, offering "pseudoscience and fear mongering" that it claimed was a "once in a lifetime" opportunity, the lawsuit alleges.

"Families put their trust in CBR at a deeply personal and emotional moment — the birth of a child — believing they were making a responsible, potentially life-saving investment in their baby’s future," Attorney General Kris Mayes, a Democrat, said in a statement. Instead, what CBR offered was "consumer fraud at its worst," she said.

CBR is one of the nation's largest private companies offering umbilical cord blood storage to parents after the birth of their child. Storing umbilical cord blood allows the preservation of stem cells that can be used in medical research or the treatment of diseases like leukemia and blood disorders.

CBR's parent company, Generate Life Sciences, did not respond to a request for comment about Mayes' lawsuit.

The case was filed in Maricopa County. It alleges CBR told soon-to-be parents — who paid thousands of dollars to store umbilical cord tissue or blood — that the sample would remain useful for medical treatments and that treatment breakthroughs were just on the horizon, though that was not the case. And the company did not properly handle the samples, the lawsuit says. Samples were shipped without temperature controls and were at risk of contamination, for example, potentially leaving them unusable.

CBR more than misrepresented its own offerings, the lawsuit claims. The company also disparaged public cord blood banking options, which are less expensive and subject to more regulation, as it offered a financial incentive to doctors to recommend their patients consider paying for private storage.

The company's salespeople offered free lunches, gift cards and kickbacks of up to $700 per sample for doctors who recommended its services and ultimately recruited customers, the case alleges.

Mayes' prosecutors are asking a judge to issue an injunction, ordering the company and its employees to stop the deceptive practices. But the request goes further, asking that the company be ordered to disclose kickbacks paid to medical providers who recommended CBR, and test samples in storage and share the results with customers. Mayes wants the company to be forced to stop marketing, and offer refunds if stored samples are no longer useful.

A 2024 New York Times story cited in Mayes' case found problems with the industry, from bacteria growing at CBR's Tucson warehouse to its limited usefulness as adult stem cells have become more frequently used. The story says 19 stem-cell transplants that used the child's cord blood were reported after 2010.

The Arizona Republic reported in 2020 that many families found the odds of the blood being useful were slim. The chances a child would develop a disease that could be treated with the blood transplant were about one in 1,000 or one in 2,000.

At least five Arizona hospitals will collect cord blood and share it for treatment, according to NMDP, a nonprofit that advocates for and researches stem cell treatments. The organization was formerly known as the National Marrow Donor Program and Be The Match, and it operates a public cord blood registry.