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

Mother's fury at dead daughter's fiance's plan to have baby with his sister using frozen IVF embryos

When Kay Stanley died in a car crash in Australia, her fiance and family were united in grief.

But a year on, they are at war over alleged plans to create a baby from three embryos she had frozen after becoming pregnant with IVF treatment.

Her mother Gwen Bates is horrified at the idea of having a grandchild in such a way and believes her daughter would never have approved.

She claims Miss Stanley's fiance Brett Vogel has proposed that his sister would act as a surrogate mother for the embryos in an attempt to have a 'miracle' baby.

Her daughter, a former entertainer who had toured Australia with children's show The Tweenies, was ten weeks' pregnant when she died.

Her VW Beetle was hit by a passenger train at a level crossing near Melbourne and shunted more than 200 metres as she drove to her job as a pre-school teacher. Mrs Bates, a nurse from Rotherham, said: 'I was told by Brett's family not to be sad because a miracle was about to take place.

'They told me his sister Sally was going to have one or two of the embryos implanted so that Brett could have my girl's baby.

'This was devastating news and would have an enormous impact on my life. It is also something I believe Kay would be against.'

Mrs Bates has stayed in Australia fighting to bring her daughter's body home after, she said, Miss Stanley was buried there against her wishes.

However, Mr Vogel's family will have no contact with her, so she does not know if the bizarre baby plan has gone ahead.

'It was Sally's partner who told me that it had been discussed by the family,' added Mrs Bates. 'I couldn't believe what I was hearing. It was a bombshell and I found it weird.

'Brett admitted there were three embryos still frozen from the IVF treatment Kay had been having.

'But when I tried to bring up the claims that his sister would act as a surrogate, he blanked me.

'Since the funeral Brett has been all over the world but has returned to Australia. I almost bumped into him in a cafe but he got up and walked straight out. He crossed the street when I saw him on another occasion.'

Kay Stanley died in an accident in Australia. Her mother is now fighting to bring her body back and prevent her fiance from using her frozen embryos

Mrs Bates has sought legal advice after receiving a letter from Mr Vogel's solicitors demanding she has no contact with him.

'I am trying to find out how I stand legally,' she said. 'I will take action if need be. I have a right to know.

'This will be my daughter's child and I will become a grandmother. All I have left are a few pieces of her jewellery and some candles.

'I want to bring my daughter home and have her buried in Rotherham and I will not leave without her. We come home together or we stay together here. I want to be with her.'

She is considering legal proceedings to gain ownership of her daughter's body to establish the status of the embryos.

An inquest has yet to be held. But it has been suggested Miss Stanley may not have seen the crossing warning lights because of bright sunshine.

Her mother said: 'They are using Kay as a scapegoat. They started to put the barriers up after her death but if they knew it was dangerous, something should have been done.

'The police asked if she was happy, suggesting that she may have done it deliberately. I told them she had just had IVF treatment and was about to get married. There was no one more careful than Kay.'

Mr Vogel, who was Miss Stanley's partner for four years, has declined to comment.

Surrogacy Law Must Be Reviewed in the UK

Pressure for a review of surrogacy law is mounting in legal, media and
political quarters following the case of Re X & Y (Foreign Surrogacy) 2008.
The case - the first to test thelaw for British couples going abroad for surrogacy
- has highlighted the complexity and confusion surrounding surrogacy law in the UK.
The case hit the headlines after twins, biologically the children of a
British father and an anonymous egg donor and carried by a Ukrainian
surrogate mother, were left parentless and stateless by a conflict between
English and Ukrainian law. The British commissioning parents were not
treated as the twins' parents under English law, despite the British
father's biological paternity. The twins could have faced a childhood in a
Ukrainian orphanage if the High Court had not made a groundbreaking decision
to authorise the payment of £23,000 made to the surrogate mother.
The issues in the case go to the very core of society's attitude to
fertility treatment and highlight the problems with the current constraints
on surrogacy in the UK, particularly in the wake of increasing
permissiveness of commercial surrogacy in foreign jurisdictions. The
landmark legal judgment has ramifications for all those involved in
fertility practice, including patients, their legal advisers, clinicians and
the HFEA.
The case follows hard on the heels of recent parliamentary debates on
the Human Fertilisation and Embryology Act 2008. The government indicated in
those debates that it was minded to review the law and regulation of
surrogacy, but it fell short of tackling the issue head-on. This was a lost
opportunity to overhaul the inherent problems and inconsistencies with
English surrogacy law.
The case of Re X and Y highlights quite how significant this omission
was. The risk of many more couples ending up in a similar nightmare is
worrying. More British couples are travelling abroad for treatment, for
reasons including the acute shortage of egg donors in the UK and
restrictions on commercially-arranged surrogacy which make it difficult to
find a suitable surrogate mother in the UK. Mr Justice Hedley acknowledged
this trend, saying 'more and more couples are likely to be tempted to follow
the applicants' path to commercial surrogacy in those places where it is
lawful'.
The problem is that many foreign systems of law take a very different
approach to surrogacy, so that children are born following arrangements
which would not be permitted in the UK. In Re X & Y, the British couple had
paid the surrogate mother 27,000 Euros (£23,000), far more than the
'reasonable expenses' permitted under UK law. The High Court's decision to
authorise the payments was a watershed, but the court made it clear that the
UK maintains a public policy against commercial surrogacy and that every
case will be decided on its own facts. Other British couples who conceive
through foreign surrogacy can therefore expect to face a similar legal
battle to the parents in Re X and Y.
Of equal concern, Mr Justice Hedley acknowledged that the British couple
in Re X and Y had made diligent enquiries about parenting options and made
what they felt was an informed decision about entering into a surrogacy
arrangement in the Ukraine. He commented that none of the legal difficulties
the couple experienced were 'foreshadowed in any of the extensive enquiries
they had made before leaving this country, whether on Home Office websites
or the information given by the bodies who advised them in the United
Kingdom or the information given to them in and through the Ukrainian
Hospital'. There is currently a dire lack of good quality information about
the legal treatment of international surrogacy arrangements, Mr Justice
Hedley commenting that 'the quality of information currently available is
variable and may, in what it omits, actually be misleading'.
Fertility practitioners and regulatory bodies beware. Following Re X
and Y, relevant professionals (and regulatory bodies) in the UK will be
expected to provide patients with much better information about the legal
complications of foreign surrogacy. Re X and Y highlights quite how
dangerous it can be for patients (and perhaps their doctors) to focus
exclusively on the goal of conceiving and to give too little thought to the
legal consequences that may follow after their long-awaited child is born.
Surrogacy remains a sensitive and difficult subject and there needs to
be greater awareness of the complex legal issues. Those working with
fertility patients can also play their part for a better future by
increasing pressure for a review of surrogacy law in the UK.

- By Louisa Ghevaert, Associate Solicitor at Lester Aldridge LLP. Louisa
works with Natalie Gamble and represented the parents, together with
Natalie, in the Re X and Y case. For further information see
www.lesteraldridge.com/services/private/fertility/index.asp

Single men turning to surrogates

NEW YORK (CNN) -- Jeff Walker says from as far back as he can remember, he always wanted to be a father.

Jeff Walker, with his two daughters, tried to adopt, but ultimately turned to surogacy to build a family.

"It was always something I knew, from the time I was a child." Just like his 3-year-old daughter, Elizabeth, who says she wants to be a mommy someday, Jeff says, "I knew I wanted to be a daddy."

Walker, a Manhattan music executive, says he and his partner had talked about adopting a baby years ago. But after three emotionally draining, failed attempts at adoption, they decided to turn to surrogacy. They contacted Circle Surrogacy, a Boston agency that specializes in gay clients. Their child was conceived with a donor egg, and then the embryo implanted in the surrogate, or carrier.

After Elizabeth was born, Walker and his partner separated. He then made a critical decision -- to become a dad again, single, and by choice.

"I realized my family, my two-dad family was going to look different than I thought it was going to look," he said. Without a partner, he would face even steeper challenges raising Elizabeth and a sibling alone. Walker says he gave the decision a lot of thought.

"That was the only part that was really controversial, because I do think there are a lot of challenges that single parents face, but at the same time I felt I was capable of handling those challenges," he said.

His second daughter, Alexandra, was born two years ago to the same surrogate, implanted with an egg from a different donor.

Walker, 45, is one of a growing number of single men -- both gay and straight -- who are opting to become fathers alone, with the help of gestational surrogacy.

Surrogacy experts say because the practice is not regulated, many surrogacy arrangements are handled privately by individuals. Precise figures are hard to come by, but experts say there's no doubt the United States is experiencing a surrogacy baby boom.

Celebrities like Ricky Martin and Clay Aiken announced this year they had had babies with the help of surrogates and the the Society for Assisted Reproductive Technology, representing scores of reproductive clinics, reports that the number of gestational surrogate births in the country quadrupled between 1996 and 2006. Watch more on the surrogacy boom »

Surrogacy experts say gestational surrogacy has increased steadily since the advent of in vitro fertilization in the early 1980s, because it provides an extra layer of emotional and legal protection for the client. The egg donor usually does not even know the client, and unlike the legally contentious "Baby M" case from the 1980s, the surrogate is not giving birth to her genetic child.

"It rises as an issue far less frequently with gestational surrogacy, because women never see it as their child to begin with," said John Weltman, president of Circle Surrogacy.

His agency, which expects more than 70 babies to be born in 2009, has seen a 50 percent growth in the number of single male clients over the past year.

Walker and other men are willing to pay well over $100,000 to have a baby through surrogacy -- the final cost depending on the number of IVF treatments necessary and how much is paid by insurance.

Circle is not the only major surrogacy provider experiencing a single-dad surge. At Growing Generations, a Los Angeles, California, agency that facilitates about 100 births a year, the number of single men seeking surrogates has doubled in the past three years, spokeswoman Erica Bowers said.

Although most of their single male clients are gay, surrogacy providers say a smaller but growing number are straight. Steven Harris, a New York malpractice and personal-injury attorney, says he gave up trying to get married when he realized his primary motive was to start a family.

Harris, 54, says he knew he made the right decision after 21-month old Ben was born.

"I thought getting married was the only way to go, because I did want a family. But having Ben, I feel complete now," Harris says.

British surrogacy ruling saves baby twins from Ukraine orphanage

A British couple this week won custody over a pair of twins born to a
surrogate mother in the Ukraine. The twin babies were caught in a legal
loophole whereby the expectant British couple were unable to bring the twins
into the UK, as they were not recognised by English law as the parents.
Simultaneously, the Ukrainian biological mother no longer had any
responsible for, or even rights over, the children under Ukrainian law as
this (in contrast to UK legislation) gives binding effect to surrogacy
arrangements. Consequently, had the British couple failed to gain the
'parental order' for custody of the children, the twins would have been
returned to the Ukraine and placed in an orphanage.
The situation arose as a result of the couple being unable to find a
surrogate mother in the UK, where it is illegal to pay a woman more than her
expenses in a surrogacy arrangement, were advised to look abroad to a more
permissive jurisdiction, and subsequently employed the services of a
commercial surrogacy organisation in the Ukraine for a fee of around
£23,000. However, as the surrogate mother was married, the UK father, who
supplied the sperm, is not considered to be the father under UK law
(specifically s.28 of the Human Fertilisation and Embryology Act 1990) and
thus was unable to bring the children to the UK after birth. Though the Home
Office gave special leave for the children to enter the country pending the
High Court ruling, had the application for custody failed. The peculiar
legal effect of the disparity between the two legal systems is that the
children had, until the date of the court order, no legal parents and no
nationality.
The case highlights the ongoing problems surrounding the legal status of
surrogacy in the UK. Mr Justice Hedley, in his judgement on the case, stated
that 'surrogacy remains an ethically controversial area' and that
international surrogacy arrangements raise potentially difficult problems of
a kind not experienced with domestic agreements. However at present it is
impossible to enforce a surrogacy arrangement in the UK and the couple's
solicitor, Natalie Gamble, stated that the UK surrogacy law requires urgent
updating to reflect the realities of modern fertility practices and that
currently it provides inadequate protection to vulnerable children. This
view was reflected in the court's judgment, which noted the case
'highlighted the wisdom' of a review to surrogacy law (as proposed during
the debates on the Human Fertilisation and Embryology Act 2008, earlier this
year) and expressing a hope that the problems experienced by the couple 'may
alert others to the difficulties inherent in this journey'.