Two California-based firms involved in pairing infertile couples with surrogate mothers have stopped paying surrogates, raising fears about the status of thousands of dollars in advance payments from prospective parents, according to clients and employees of the firms.
Some pregnant surrogates say they have been left with no assurance of payment. One surrogate who recently had a caesarean section is owed nearly $14,000 and has not yet been cleared by her doctor to return to work, according to her case manager at one of the firms, SurroGenesis USA.
Families were warned earlier this month in e-mails from a high-ranking employee at SurroGenesis that the company had received numerous complaints about surrogates, egg donors and vendors not getting paid. The money for those payments was supposed to have been placed into trust accounts.
"We want you all to know that after failing to receive satisfactory answers regarding the holding companies' financial status, and in the interest of protecting those dependent on receipt of funds . . . we have contacted the authorities and requested an investigation," said the messages, which The Times reviewed.
Many families now fear the worst. Some who sought help having children from SurroGenesis and its partner, Michael Charles Independent Financial Holdings Group, say the funds they deposited with the firms amount to their life savings.
At least one costly egg retrieval was canceled at the last minute after the doctor learned that money deposited to cover the fees was missing, according to Andrew Vorzimer, an attorney from Woodland Hills who was contacted by the doctor for advice.
Los Angeles resident Virginia Fout, 38, said she and her husband, Michael Whetstone, had about $21,000 in an account with the Michael Charles group and now fear it is gone.
"I'm angry, to be quite honest," Fout said. "I feel completely duped . . . and blindsided."
The money that families are concerned about totals at least $2 million, according to attorneys working with couples and surrogates, who come from across California, elsewhere in the United States and Europe and China.
"In this industry, it doesn't get any worse than this," said Vorzimer, who has been advising some of the families. "For some of these couples, it is just devastating."
Some couples said they had filed reports with local and federal authorities. Several others said they had given information to Vorzimer and a second attorney, Sterling Johnson, who said he has been in contact with law enforcement officials.
