Texas couples grappling with fertility issues report having lost significant sums of cash after potentially being exploited by a surrogacy escrow account manager.
Surrogacy Escrow Account Management (SEAM) is a Houston-based company currently under federal investigation. In late June, allegations emerged that the company mismanaged and misused funds deposited by intended parents for surrogate expenses. An intended mother in Houston sought legal assistance after finding her account had gone from a balance of $60,000 to zero.
FBI Houston is currently asking victims to reach out to assist in its investigation and help make them eligible for potential services or restitution. A private Facebook group called SEAM BREACH was set up for potential victims of the scheme, and it currently has over 800 members. It is believed that victims may include not only North Texans but also future parents from France, China, and Egypt.
With the entire surrogacy journey often costing upwards of $150,000, these escrow accounts often hold thousands of dollars, not to mention the costs associated with enlisting an account manager in the first place.
SEAM and its owner Dominique Side are accused of defrauding over 600 families of more than $100 million.
The fraud allegations were brought to the FBI’s attention after Marianne Robak of Shackelford Law Firm filed a lawsuit in a district court in Harris County. She subsequently sought a temporary restraining order to freeze SEAM’s assets and bank accounts, which was granted.
“We’re pleased that the Court agreed with our request,” Robak said in a statement. “Preventing the defendants from further transferring the escrow funds is crucial as we continue investigating the scheme that has left hundreds of intended parents financially stranded. Our priority is to ensure that the families, surrogates, and unborn babies who relied on those funds receive the justice they deserve.”
The lawsuit accuses Side of potentially “misappropriating the escrow funds for years in order to bankroll [her] other business ventures and lavish lifestyle” before SEAM apparently collapsed in June.
“Defendants’ actions are nothing short of evil,” the lawsuit alleges, noting how victims are now struggling to provide for their surrogates and ensure the safe delivery of their children.
The Dallas Express spoke with two potential victims of the alleged fraud scheme at SEAM.
Sujata Maji of Dallas explained how her surrogacy agency had given her no choice but to place funds in escrow with SEAM roughly nine months ago. At the time, she had no reason to suspect that the company would mismanage the account. However, now that SEAM is under investigation and she is still awaiting the return of her unused funds, several red flags have popped up for her in the practice of escrow account management companies for surrogacy journeys as a whole.
“There is so much shady stuff happening around escrow. Like, when you talk about escrow in any other field, such as real estate, it’s so well structured and insured and legalized,” Maji said. “You have to have licenses, and you have to prove certain stuff. You have to have liability coverage and all that.”
This is not the case in the field of surrogacy in Texas.
“It is so mind-boggling for me that people are calling themselves escrow account management companies without having these credentials available to them,” Maji said.
“They are just random people … They’re basically taking your money and making themselves your money manager without any licensing affiliation. No one is monitoring them,” she added.
Maji said she and her husband were among the lucky ones. Their child had already been born by the time they had set up an escrow account with SEAM, and thus a good portion of their surrogate’s costs had been covered.
She questioned not only why there were no legal protections in place for surrogacy-related escrow accounts but also how anyone could sink so low as to exploit couples trying to grow their families.
“This is like the most sensitive situation for a family, a difficult situation they’re going through.”
Finally, Maji expressed hope that the investigation into SEAM would provide relief to the victims.
“I hope the people who are working on it, like the FBI, the Attorney General, everybody, and including the banks, that they pay the highest amount of attention here because the whole process is very time sensitive,” she said. “There are surrogates right now who are in the process, who are not getting paid, and they are probably dependent on that money, so making it a very high priority is probably very important for our society right now.”
Another SEAM client who spoke with The Dallas Express was Katie Lynch of North Dallas.
Lynch, too, explained that she considers herself to be one of the lucky ones. A friend of hers acted as her gestational carrier and brought her son into the world in May while receiving funds from the SEAM escrow account — highly recommended by the lawyers involved in drafting the surrogacy agreement — without issue.
However, things took a turn when Side began to claim banking issues.
“We were getting these weird emails from Dominique, and they were obviously going out in like list serve batches. So, my gestational carrier would get an email, and then I wouldn’t get the same email till about 12 hours later. So it felt like information was getting to some people sooner than others, and that was causing confusion and then it just all stopped responding and then that’s when the Facebook group was created and everyone just sort of piled in there,” Lynch recalled.
Amid the confusion, the timing worked out that Lynch had not re-upped her account balance — a minimum balance was required to maintain it and she was about to add $15,000 — and so she ultimately lost just over $6,000.
“I know people have had to defer their transfer completely because they don’t have the money to pay the surrogates. The surrogates aren’t going to go through the transfer if they can’t get paid, which is completely appropriate,” Lynch explained.
“It’s just absolutely heartbreaking.”
The Dallas Express contacted Side for comment, and she replied that her legal counsel had advised her against commenting amid the ongoing federal investigation.
North Texas has seen its fair share of federal fraud cases following the widespread misuse of COVID-19 pandemic relief programs.
According to data from the city’s crime analytics dashboard, as of July 11, there have been 1,245 fraud incidents in Dallas this year, most of which were confidence schemes.
These crimes tax the limited resources of the Dallas Police Department, which currently only has around 3,000 officers on staff despite a City analysis recommending roughly 4,000 to ensure public safety. It is also operating with a smaller budget than other high-crime municipalities, including New York City, Los Angeles, and Chicago after City leaders allocated just $654 million to the department this fiscal year.