You might not have heard the news, given the holiday season, but the alarming case of a scam surrogacy agency in Maryland reached a partial resolution last month. In a published order by Maryland Attorney General Brian Frosh, the State’s Consumer Protection Bureau ordered “The Surrogacy Group” to pay more than $2 million in penalties and restitution.
The Surrogacy Group, and its owner Greg Blosser, have been under investigation for promising clients surrogacy services — services like matching intended parents with gestational surrogates, assisting clients with the surrogacy process, and holding and managing funds in escrow — and then completely failing to provide such services, escrow payments, or subsequent promised refunds. Then, Blosser, the owner, essentially disappeared. Blosser was, however, found and arrested in April 2019, before boarding an international flight, presumably to flee the country.
Who Can Hopeful Parents Trust?
In an affidavit describing the supporting evidence for charges against The Surrogacy Group and Blosser, an investigating FBI Special Agent described the frustrating experience of seven of the victims (noting that there were many more than that). Couples who had struggled with infertility turned to The Surrogacy Group and Blosser for help to reach the ultimate goal of parenthood.
Some victims were at least matched to a gestational surrogate, and some lucky couples even ended up with children from the experience. But Blosser required that funds promised to the surrogate (reimbursements for travel and other expenses, as well as monthly compensation for undergoing such an undertaking) be held and paid out by The Surrogacy Group. That money never reached the surrogates themselves, though. So when surrogates were not receiving promised payments, the intended parents would reach out to Blosser, but receive only silence or the runaround. Under the contracts, that left the intended parents holding the bag for paying the surrogates — basically doubling the cost of the process. Those folks at least became parents at the end of the journey though, so consider them fortunate! Many of the victims were not as lucky.
The affidavit describes how Blosser would insert personal excuses for the delay, such as taking his daughter to a medical appointment for “another flipping ear infection,” and would sign off on emails with “Big Hugs!” So there you go. If you thought scammers would never sign their emails with “Big Hugs!” think again.
Of course, after getting the runaround long enough, intended parents asked that their money be returned, without success. Recently, the Maryland Attorney General found that The Surrogacy Group stole more than $600,000 from more than 21 victims before Blosser attempted to flee the country. The bank accounts, however, showed a balance of less than $2,000. Where the funds went is still under investigation. But based on Blosser’s current representation by a public defender, I am guessing that the money was not exactly invested well.
Scammers Look For Vulnerable Marks.
This is, sadly, not the first time that a surrogacy facilitator ran off with clients’ money or had nefarious dealings. In 2014, the Planet Hospital scandal hit, with similar facts, but an international twist. Clients paid tens of thousands of dollars for surrogacy matching and support, hoping to save money through Planet Hospital’s promises to match them with a more affordable gestational surrogate in Mexico or Thailand. But, like with The Surrogacy Group, the promises were empty, and the money disappeared. Hopeful parents-to-be were left broke, and no closer to a child. And there have been others. B Coming, Miracles Egg Donation, and SurroGenesis. Caveat Emptor!
In an even bigger scandal, in 2012, several American attorneys were key players in what amounted to an international baby-selling ring. Gestational surrogates would be sent to the Ukraine for an embryo transfer (with embryos from who knows where) for made-up intended parents, and then the gestational carrier would be told the “intended parents” backed out. The attorneys would then arrange for other, new, intended parents to claim the baby under false pretenses, and at an enormous price. (Listen to this podcast episode where we interview a surrogacy attorney who worked with the FBI to bring down the ring.)
Of course, attorneys have also fallen victim to surrogacy-related scams. Overseas “intended parents” have claimed that they needed an attorney to hold funds for their surrogacy arrangement in escrow in order to establish credibility for a visa. After the escrow funds have been sent, the “intended parent” would say that the visa was denied, and ask that the money be returned. But somehow the initial received money was never legit, so you just sent them your own funds. Oh no!
Are We Surprised?
Perhaps it’s a no-brainer that surrogacy is a ripe area for fraud and scandal. Due to the basic human drive to want to be parents, the emotional journey with infertility can lead to desperation. Add in the high cost for reproductive services, especially with surrogacy, and intended parents are primed to be victims.
What’s The Answer?
There is no easy test to detect a scammer. It’s even possible someone like Blosser never initially set out to defraud clients. Perhaps he had a legitimate business at one time, and poor financially practices lead him down a dark path.
You might think that you’re safe, so long as you go with an agency that’s somewhat well known. But you’d be wrong! In the baby-selling ring scandal, several of the key players were well-known attorneys, respected by peers, who frequently appeared at conferences, and who were featured positively in national news.
So the best protection is to research, research, research. The more you know, the more likely you are to recognize a red flag or sense when things are off. Perhaps if the surrogates being sent to the Ukraine had done more research, they might have been more suspicious of the lengths gone to by facilitators to limit their contact with the supposed intended parents. Or maybe not. But the more you know, the better your understanding of what’s normal and what questions to ask.
Some states have created laws to provide safeguards. California law requires that surrogacy facilitators not be permitted to hold escrow funds for a surrogate arrangement. Instead, funds must be held by a licensed attorney or a bonded escrow company. Of course, if we have learned nothing else from abovethelaw.com, it is that attorneys also have some shady characters in our midst.
In conclusion, technology has evolved to allow amazing things -– including the ability to overcome infertility in most cases. But like with any rapidly growing area where major sums of money are in play, there are going to be some bad apples. They key is to recognize them before damage is done.
Ellen Trachman is the Managing Attorney of Trachman Law Center, LLC, a Denver-based law firm specializing in assisted reproductive technology law, and co-host of the podcast I Want To Put A Baby In You. You can reach her at babies@abovethelaw.com.