Many parents, who turned to surrogacy and put thousands of dollars in an escrow account to pay surrogates for carrying their child, have run into a big problem because that their money has vanished.
A new lawsuit filed in Texas said the money partially paid for the owner of the escrow company’s luxury cars and lavish lifestyle.
A Sherman Oaks woman, who asked to remain anonymous, turned to surrogacy three years ago.
“Our doctors said your best chance is if you turn to surrogacy,” she said.
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That’s when she started working with an agency – recommended by her doctor – that tried to find her a surrogate.
“One of the first things you have to do is set up an escrow account that shows that you have the funds to actually pay for this very expensive surrogacy journey,” she said. “They gave us a list of escrow accounts, and SEAM was one of them.”
Surrogacy Escrow Account Management LLC, also known as SEAM, is based in Houston, Texas.
It’s owned by entrepreneur Dominique Side with its website saying, "We’ll handle the money. You handle what matters."
The Sherman Oaks woman said she trusted them and put $50,000 in the account.
“Now it’s down to $44,000 because we had to pay out some expenses,” she said.
In Bellingham, Washington, California native Arielle Mitton also put $50,000 in a SEAM account.
“The way it was explained to me was that this is what you had to do; it was to protect the surrogate, really,” Mitton said. “Because what if I just say, ‘OK, I’ll pay you that every month.' And then I just go off, I don’t pay them or I die. It’s really a way to protect the surrogate to make sure they get their compensation.”
The alleged Sherman Oaks victim said she thought her money was in the escrow account for "safe keeping."
Both women thought their money was safe until early June when SEAM sent an email, obtained by NBC4, saying in part fraudulent charges prompted Capital One to freeze their account.
Then in late June, the FBI announced it’s investigating the escrow company, asking potential victims to come forward.
In early July, owner Dominique Side sent impacted families another email saying in part “I regret to inform you that all operations have been placed on hold.”
Now they can’t access their funds and have no idea if any money is left in the account.
“It’s been really devastating,” the Sherman Oaks woman said. “We have no information.”
In Washington, Mitton is waiting for an update, too.
“The total amount left in that account that hadn’t been paid out at that point was just under $38,000, so like $37,721.44,” Mitton said. “We have no idea where the money is.”
And they are not alone. An expectant mom in Texas is now suing SEAM, Dominique Side, and her business partners.
Houston Attorney Lori Hood filed the lawsuit, saying hundreds of families may have been defrauded.
“This is worldwide,” Hood said. “I have talked to parents that live in France, India, Egypt, the UAE. It's all over the United States.”
According to the lawsuit, Dominique Side used escrow funds to pay for trips all over the world, designer clothing, and luxury vehicles. It also accuses her of using more than $2.2 million of intended parents money to bankroll her music career as a rap and R&B singer.
The lawsuit also says another $6.2 million helped pay for her music studio.
When NBC emailed Side asking for a response, she replied and acknowledged she is under federal investigation.
“Under advice of counsel, I am not permitted to respond to any inquiries regarding the investigation,” said Side, who has not been charged with any crime.
“I can't believe anybody would do this. I've been doing this a long time, and I've seen a lot of black-hearted people, but this -- this takes the cake,” Hood said.
“Babies are being born, and this doesn't stop just because the money is missing now the parents have to come up with alternative funds to pay their surrogates, so that their babies can stay healthy and that everything stays on track.”
And in Washington that’s exactly what Arielle Mitton is dealing with now. Her pregnant surrogate is due in December, and the money that was supposed to pay her and for her care has vanished.
“To be completely honest when it first came out that first weekend, I barely slept. I barely ate,” Mitton said. “It was very hard on me.”
Arielle and her husband have now started a GoFundMe as they scramble to raise funds to keep paying their surrogate.
“Surrogacy is already a process where you are relying on the goodness of others to fulfill your dreams and your goals. I never imagined that I’d be relying on the goodness of others in this sort of way,” Mitton added.
Another alleged victim from Sherman Oaks is still trying to find her match.
“We’re still looking for a surrogate that’s right,” she said.
The woman, who is not part of the lawsuit filed in Texas, said she’s now considering dipping into her retirement or taking out a loan as she tries to keep her surrogacy journey alive.
“It’s already a lot to go through, emotionally and financially, so having this happen is kind of the biggest betrayal you can imagine,” she said.
Houston Attorney Lori Hood said 30 families with SEAM accounts have joined the lawsuit.
The FBI is asking anyone impacted to get in touch with its Houston office.
Those involved do not know if they will get their money back, so they’re scrambling to find new money, especially those with a baby on the way.
