Clients of Surrogacy Agency Missing Millions of Dollars After Company Suddenly Closes

The Web site was impressive. An agency called SurroGenesis listed 60 locations worldwide where infertile couples and individuals could find women willing, for a fee, to serve as gestational surrogates. Aspiring parents put up tens of thousands of dollars hoping the agency could help them start families.

Today, SurroGenesis’ main office, in Modesto, Calif., is closed. So is an escrow company, Michael Charles Independent Financial Holding Group, that was supposed to be safeguarding the clients’ money. It turns out that many SurroGenesis locations were post-office boxes. An FBI spokesman, Steve Dupre, said the agency was evaluating the case but had not opened an investigation.

U.S. and international clients of SurroGenesis are missing as much as $2 million after the company suddenly shut down without explanation, according to lawyers familiar with the case, the New York Times reports.

Money gone

SurroGenesis told clients March 13 via e-mail that their money was gone. The shutdown affected about 70 people, some of whom had paid as much as $90,000 for promised gestational surrogacy services. “Many of them have lost their savings, and any chance of having a family is completely destroyed,” said Andrew Vorzimer, a lawyer working with those affected. “We’ve got couples in the midst of pregnancies with no ability to pay the surrogate, or even make insurance payments, which have gone unpaid.”

On the heels of the birth in January of octuplets, conceived by in vitro fertilization to a single California woman who has six other children, the case highlights the lack of oversight in the business of creating babies. There is no licensing requirement for egg-donor and surrogacy companies.

According to the Times, several couples learned about SurroGenesis on the Internet. As part of the agreement for surrogacy services, parents were instructed to deposit money to cover costs in an escrow account. SurroGenesis in a March 13 e-mail told clients that their money was gone and advised them to hire lawyers. The e-mail also said that clients should contact the Modesto Police Department because the escrow company that was supposed to be holding clients’ money — the Michael Charles Independent Financial Holding Group — was no longer paying its bills. California records show that SurroGenesis founder Tonya Collins is also listed as the registered agent for the Michael Charles group, even though it “was supposed to be an independent and bonded escrow company,” according to the Times. FBI spokesperson Steve Dupre said the agency is evaluating the case but has not launched an official investigation. Andrew Vorzimer, a lawyer working with some of the clients, said, “Many of them have lost their savings, and any chance of having a family is completely destroyed.” He added, “We’ve got couples in the midst of pregnancies with no ability to pay the surrogate, or even make insurance payments, which have gone unpaid.” According to the Times, Vorzimer said there is one surrogate carrying twins for a couple who lost more than $50,000. The surrogate is on bed rest, but the couple now is unable to reimburse her for lost wages.

Sources: New York Times, 3/21/2009

Seattle Times, 3/22/2009

Reproductive Health News, 3/24/2009

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