Eggsploitation: ‘Creating an Inventory of Unborn Babies’ UPDATED

We have covered international surrogacy issues from Ukraine to India to Greece to Thailand. Now a   prominent US Surrogacy lawyer, Theresa Erickson, is the third person in a conspiracy to plead guilty to being part of a baby-selling ring based in California with women being impregnated in Ukraine.

The FBI press release explains the details of the operation. We have pasted it below.

“United States Attorney Laura E. Duffy announced today that Theresa Erickson entered a guilty plea before United States Magistrate Judge William McCurine, Jr., in which she admitted to being part of a baby-selling ring that deceived the Superior Court of California and prospective parents for unborn babies. According to court records, Erickson (an internationally renowned California attorney specializing in reproductive law) fraudulently submitted false declarations and pleadings to the California Superior Court in San Diego, in order to obtain pre-birth judgments establishing parental rights for Intended Parents (“IPs”). California law forbids the sale of parental rights to babies and children but permits surrogacy arrangements if the women expecting to carry the babies, Gestational Carriers (“GCs”), and the IPs enter into an agreement prior to an embryonic transfer. If the GC and IPs do not reach an agreement before the GC receives the embryonic transfer, the GC cannot transfer parental rights except through a formal adoption procedure.

In her guilty plea, Erickson admitted that she and her conspirators used GCs to create an inventory of unborn babies that they would sell for over $100,000 each. They accomplished this by paying women to become implanted with embryos in overseas clinics. If the women (now GCs) sustained their pregnancies into the second trimester, the conspirators offered the babies to prospective parents by falsely representing that the unborn babies were the result of legitimate surrogacy arrangements, but that the original IPs had backed out. In pleading guilty, Erickson also admitted that she prepared and filed with the Superior Court of California, County of San Diego, declarations and pleadings that falsely represented that the unborn babies were the products of legitimate surrogacy agreements, that is, ones that involved agreements between the IPs and the GCs prior to embryonic transfer. With these fraudulently obtained pre-birth orders, the IPs’ names would be placed on the babies’ birth certificates and the conspirators would be able to profit from their sale of parental rights. Erickson also admitted that she caused applications containing materially false representations to be submitted to the State of California’s Access for Infants and Mothers program to subsidize the medical expenses for delivering the babies. Erickson is the third member of the conspiracy to plead guilty. Hilary Neiman, a Maryland attorney specializing in reproductive law, pled guilty on July 28, 2011 before Judge McCurine, Jr.”

News Article

The Associated Press article has been picked up by dozens of publications across the globe.

“According to her plea agreement, Erickson along with a Maryland-based lawyer who also specializes in reproductive law and a Las Vegas woman, recruited women to travel to the Ukraine to be implanted with embryos created from the sperm and egg of donors.

Once a gestational carrier, or surrogate, reaches the second trimester of pregnancy, prosecutors claimed the defendants would “shop” the babies by falsely telling couples that a couple who had intended to adopt the baby backed out of the deal.

The new couple that agreed to adopt the baby would have to pay more than $100,000 in fees. Women who agreed to carry the babies to term were paid from $38,000 to $45,000, court documents said.

While most of the surrogates and adoptive parents lived outside of California, prosecutors said the defendants broke state law by falsely declaring with the San Diego Superior Court that the unborn baby was part of an agreement made between the surrogate and the couple before pregnancy.

The law is designed to prevent the sale of parental rights to children, but by falsely declaring the unborn baby was the result of a legitimate surrogacy arrangement they obtained pre-birth judgments that named the adoptive parents on the babies’ birth certificates.

The surrogates were sent to Ukraine to have the embryos implanted because no American fertility doctor would perform such a procedure without documents proving that an agreement existed between the woman and the “intended parents,” Assistant U.S. Attorney Jason A. Forge told the Los Angeles Times.”

“Additionally, prosecutors alleged the defendants misrepresented the identities of the sperm and egg donors and fraudulently obtained more than $20,000 in state insurance coverage for the surrogates, who were ineligible to receive the benefits.

The FBI investigated the scheme after receiving complaints from gestational carriers and others, said Special Agent Darrell Foxworth, an FBI spokesman in San Diego.

The couples who adopted the babies did not believe they were breaking the law and will not have their parental rights taken away, Forge said.

Erickson, who prosecutors believe profited about $70,000 through the scheme, will pay each of the 12 couples $10,000 in restitution and up to $250,000 in fines to the government. She faces up to five years in prison when she is sentenced Oct. 28.”

“Hilary Neiman, the Maryland attorney, pleaded guilty to conspiracy to commit wire fraud on July 28. Carla Chambers, who is identified in court papers as a surrogate on multiple occasions and helped recruited women to be gestational carriers, pleaded guilty last week to conspiracy to engage in monetary transactions derived from unlawful activity.”

“Neiman and Chambers face the same penalties as Erickson when they are sentenced Oct. 14 and Oct. 28, respectively.”

3 plead guilty in Calif. ‘baby-selling ring’ involving babies born from surrogate pregnancies
[Washington Post 8/10/11 by Associated Press]

Erickson’s Large Internet Presence

She was a frequent poster to many surrogacy blogs including her own and support groups and even was part of The Surrogacy Lawyer Radio Show complete with a Facebook group. Almost all of these links are broken now.

We found one gem left here from March 2011. It is entitled “The Surrogacy Lawyer Radio Program Presents Moving Beyond Exploitation: Setting the Record Straight About Egg Donation.”

“Since Eggsploitation’s release in 2010 by the Center for Bioethics and Culture, a conservative organization opposing assisted reproduction, the infertility field has been trying to gauge its affect. Is the sensational, one-sided film just another attack on infertility patients’ access to care that is no more than a passing phase or will it have a lasting impact on how the public perceives egg donation?

On Thursday, March 31 episode of The Surrogacy Lawyer: Your Guide to IVF and Third Party Family Building, host Theresa Erickson, Esq., and her guests will be discussing the allegations Eggsploitation makes about donor moms, egg donors and the entire infertility profession. She will be interviewing Marna Gatlin, founder of Parents Via Egg Donation; Sara Axel, donor mom and coordinator of the NYC Gathering Spot; a California egg donor; and John Hesla, M.D., a reproductive endocrinologist at Oregon Reproductive Medicine.

Eggsploitation claims that donor egg moms, described as rich older women “who can buy what they want, just like another commodity,” exploit younger women, “the anonymous donors.” Another assertion perpetuated by the film is that egg donors are seemingly coerced into donating, lured by the “big” money of compensation, and are not educated about the risks they will be taking, thus exposing themselves to major health concerns.

“Despite its over-the-top imagery and one-sided depiction of egg donation, many in the infertility professional and patient communities feel that something good will evolve from discussing the issues the documentary raises. We are not disputing the horrific experiences described by the young women profiled and we empathize with their physical and emotional pain,“ says attorney Erickson. “But we also are cognizant of the larger agenda the Eggsploitation producers have about reproductive medicine. As a former egg donor and now as a third party reproduction specialist, I want to insure that the absolute best practices are utilized for the welfare of both egg donors and parents via egg donation. I am glad we have this chance to move the discussion forward.”

 How is that best practice working for you now, Theresa?

Update: “[P]rosecutors say Theresa Erickson was actually working the system to become an international baby broker, running a birthing factory out of the Ukraine that duped at least a dozen American couples into paying $150,000 for children they thought were being adopted legally.”

“Prosecutors described an elaborate scheme that stretched across two continents. Erickson and two others allegedly recruited women to go to the Ukraine and be implanted with embryos from anonymous donors.

They told their clients the babies had been part of a surrogacy contract and that the prospective parents had backed out at the last minute, Assistant U.S. Attorney Jason A. Forge said.

In fact, he said, there were never any such parents or contracts. The three were instead paying the surrogate mothers between $38,000 and $45,000 for each successful pregnancy and keeping the rest of the adoption money for themselves, Forge said.”

“They also misled the parents into believing they knew who the sperm and egg donors were when they were anonymous, he said.”

“He estimates Erickson raked in at least $70,000 alone from the scheme. [This seems like a gross underestimation if in each of 12 cases they were pocketing the estimated 55-112K apiece OR there are many others involved that got away with this crime. Their fines are pretty slim as over $1 million could have been made form these 12 clients.]

Erickson filed false declarations and pleadings in the San Diego Superior Court that the unborn babies were the result of a legitimate surrogacy arrangement to obtain pre-birth judgments that named the adoptive parents on the babies’ birth certificates and guaranteed them full parental rights, according to court documents.

The parents will not lose their parental rights because they did not know any laws were being broken, Forge said.”

“California “has become the capital of reproductive malpractice,” said Glenn McGee, editor and chief of The American Journal of Bioethics, who has written a book about the topic called “The Perfect Baby.”

“That’s partly because the state has a flourishing surrogacy market that attracts people from around the globe looking to adopt through surrogacy pregnancies.

“There’s a kind of a web of service in California that makes it a special place, and the attorneys know the law best because some of the most challenging cases involving surrogacy have been in California,” said McGee, who works at the Center for Practical Bioethics in Kansas City.”

“”Surrogacy is hard to regulate and hard to do responsibly if there are market pressures, and if there are exploitative and predatory legal practices,” McGee said. “There is so much potential for abuse here.”

There are also genetic risks for future generations if no one knows who the donors are who are producing the children, McGee said.”

“”This case will set back attempts to create clear standards for surrogacy again, and it’s a very bad time for that to happen because there are more desperate parents than ever, there are more problems than ever with international exploitation of adoptions, and the government is ill-prepared to regulate this right now,” McGee said.”

Surrogacy Scandal Raises Question About Regulation
[ABC News 8/11/11 by Julie Watson/Associated Press]

Update 2: This article includes interviews with the surrogates–one a 40 year old. The coordinator herself, aged 50, also used the Ukraine clinic.

“Most uncommon was the arrangement itself. Typically, a couple hires a surrogate to carry and deliver a child for them, but in this case Todd would become pregnant first. Parents would be found later.

Todd was 40 with four children of her own and didn’t want to be left to raise another if parents couldn’t be found. That wouldn’t be a problem, the program’s coordinator, Carla Chambers, told her: More than 45 couples were waiting for babies.”

“The defendants waited until the surrogates were 12 weeks pregnant before shopping them around to prospective parents in the U.S. Couples were told that existing surrogacy arrangements had fallen through but that they could step in — for a price of $100,000 to $150,000.

To people desperate for a child, that could seem like a good deal. Many infertile couples suffer enormous disappointment and financial loss trying to have children. One attempt at in vitro fertilization using a surrogate can cost $20,000 — more than double that if an egg donor is used. It often takes a few tries.

This scheme offered couples a surrogate well into her pregnancy, after the greatest risk of miscarriage had passed. It would even be possible to choose the sex of a child. In addition, the babies were white — a condition set by many U.S. couples that makes it difficult for them to adopt.

Ukraine offered Erickson and her co-conspirators advantages as well. In vitro fertilization was far cheaper there and the doctors didn’t insist on seeing a surrogacy contract before attempting a pregnancy, as they do in the U.S.”

“Heather Albaugh and her husband already had two children and didn’t want another. But she liked the feeling of being pregnant. “You feel special,” she said.

So Albaugh, a mortgage underwriter from Texas, posted an ad online offering herself as a surrogate.”

“In February of 2010, she received an email asking whether she was willing to travel internationally. She soon learned the sender, “Baby Dreams,” was Chambers.

Chambers put her in touch with Todd, who had recently returned from Ukraine. Newly pregnant, Todd told her everything had gone smoothly.

Albaugh, then 34, was also comforted to learn that another prospective surrogate, 29-year-old Kimberley Schooley from Missouri, would be flying to Ukraine with her.

Schooley, a grocery store cashier with five children, had also tried surrogacy for another couple and failed. “I was super-excited to go,” she said.

Her mother, a nurse, warned her that the arrangement didn’t sound right, but Schooley said, “I researched [Erickson] on the Internet and found tons of articles ranting and raving about the work she does.”

“In April, Schooley and Albaugh met Chambers in Lviv. Though she was in her early 50s, she told them she was a few months pregnant from her last trip.

The next morning, she took them to the clinic. It was clean and had a professional staff. Chambers told them local college students had donated the eggs and sperm. Each woman received two embryos.

Back home, they soon learned they were both pregnant — Schooley with twins.”

“Albaugh already had parents in mind: the Dallas couple she had tried to help before.

The couple decided not to go forward after hearing about the fees. Although Albaugh had offered a discounted rate of $20,000, Neiman wanted an immediate wire transfer of $35,000, according to the wife, who did not want her name used.

More than a dozen weeks into their pregnancies, Albaugh and Schooley started getting worried. It seemed that Chambers was having trouble lining up families. And they hadn’t been paid anything.

Todd was growing apprehensive as well. In May of 2010, she was paid $3,000 and told that a couple in Florida wanted the baby. Chambers sent her pictures and a profile of the family. They already had 12 children and, Todd was told, had worked with Erickson before. [Can you say child collector?]

But 23 weeks into her pregnancy, there was still no formal agreement. Todd called an attorney, who put her in touch with Andrew Vorzimer, a Los Angeles lawyer specializing in surrogacy and egg donation. The two of them decided to call the FBI.”

“Albaugh soon learned of the FBI investigation. She called Schooley immediately “to tell her we were involved with criminals.”

Four days later, Schooley, 18 weeks pregnant, hemorrhaged in the grocery store. Her pregnancy was over.

Beyond the $3,000 Todd received, none of the three women was paid. All three helped prosecutors prepare their case by relating their experiences and providing their email exchanges with the defendants. Officials consider them — and the families who got children — victims of the scam.”
Long-term Planning

“According to court records, Erickson and Chambers devised the scheme at least six years ago and brought in Neiman in 2008.”

The California Side

“”The surrogates were required to give birth in California. It is one of the only states where parents of a biologically unrelated baby carried by a surrogate can be listed on a birth certificate without going through an adoption.

Erickson admitted in her plea agreement that each time a deal was struck with a couple, she would file a fraudulent document in San Diego County Superior Court claiming that a surrogacy arrangement had been in place from the beginning.”

Scam targeted surrogates as well as couples
[Los Angeles Times 8/13/11 by Alan Zarembo]

Update 4: This article tells the story of one of the adoptive parents, Taylor Stein, a socialite, and how she paid $180,000 for the surrogacy arrangement. Some excerpts:

“The agency — which recruited surrogates and wealthy parent wannabes over the Internet, peppering them with e-mails dubbed “Baby Dreams” and promises of designer kiddies — told the socialite midway through the deal in September 2009 that “my surrogate had run away.

“They told me she was a crackhead . . . a vegan, and she wanted to give birth with a doula [labor coach],” Stein said.

“In fact, she was already onto the agency and [ultimately] was the first person to contact the FBI. [She] is the heroine in all this.”

The unsuspecting Stein was told not to worry about her supposedly wayward surrogate. ”

“Still, she and the surrogate “were never allowed to speak directly.”

“”My son has no information about the identity of his real parents, and I think that is a birth right,” she said.

“I want to go to the Ukraine to track down my son’s donors so that he has some idea of his DNA, and change some laws in DC so that all adopted children have the right to find out the identity of their true parents.

Her documentary will be called “White Collar, Black Market — the Surrogacy Loophole.”

How socialite brought down black-market baby brokers
[New York Post 8/16/11 by Emily Davis]

Update 5: “Hilary Neiman, the Rockville-based attorney who was investigated by the FBI for running an illegal international surrogacy ring, can no longer practice law in Maryland.

Neiman, who founded and ran the National Adoption and Surrogacy Center out of Rockville’s Town Center, was disbarred Thursday by the Attorney Grievance Commission of Maryland. The petition for disbarment was brought jointly by the commission and Neiman’s attorney, said Glenn Grossman, bar counsel for the commission.

The phone number to Neiman’s center in Rockville was disconnected Friday and all information previously listed on the website, www.adoptsurrogacy.com, was removed.

Neiman ran the center from a small office at a complex at 30 Courthouse Square in Rockville and joined an illegal international baby-selling ring out of California in 2008, according to federal court filings.

She pleaded guilty July 28 to conspiracy to commit wire fraud after federal authorities uncovered a scheme in which Neiman and Theresa Erickson, a Poway, Calif.-based attorney, paid women to become pregnant by unknown donors and later filed fraudulent surrogacy agreements in California with unsuspecting parents.

Neiman’s sentencing hearing, orignally scheduled for Oct. 14, has been moved to Dec. 2, according to online court records. Erickson will be sentenced Dec. 16.

Each face a maximum sentence of five years in custody and a $250,000 fine. ”

Rockville-based surrogacy lawyer disbarred after pleading guilty to fraud
[Gazette 10/7/11 by Danielle E. Gaines]

This informative blog http://ivflandonsurrogacyworld.blogspot.com/2011/10/theresa-erickson-not-eligible-to.html also says that Theresa Erickson is no longer allowed to practice law as of 9/16/11. For more on this case, read that blog’s August through October 2011 posts. The blogger connects all the dots of the businesses. Kudos for the amazing work!

Update 6: Hilary Neiman has been sentenced to a pathetic 5 months in federal prison, 7 months home confinement and $133,000 fine.

“A former lawyer has been sentenced to five months in federal prison for running a fraud scheme that paid women to have babies for sale.

Hilary Neiman, 32, was sentenced Thursday by a judge who condemned her for targeting couples looking to have children and dishonoring the legal profession. Neiman pleaded guilty in April to conspiracy to commit wire fraud.

Battaglia also ordered Neiman to seven months of home confinement and forfeit $133,000 she made for her role in the fraud, according to the San Diego Union-Tribune (http://bit.ly/vF8xGB).

The scheme involved paying women up to $45,000 to travel to the Ukraine for in-vitro fertilization. The babies were sold for $100,000 each to American parents, who were told they were assuming non-existent surrogate mother agreements.

State law requires such agreements to be signed before pregnancy. Otherwise, prospective parents must go through the more complicated process of adoption. California has a flourishing surrogacy market that attracts people around the globe looking to adopt through surrogacy pregnancies.

Neiman and two other women, who are awaiting sentencing, skirted the law by creating an inventory of babies, then recruiting unknowing parents to take them by saying the original intended parents had dropped out, prosecutors said.

The scheme lasted for six years, beginning in 2005, but Neiman didn’t get involved until three years ago, her lawyer Joseph McMullen said. The trio got caught when some of their surrogate mothers tipped off federal investigators.

“I knew better than this,” Neiman said at her sentencing. “I didn’t listen to myself. And I’m sorry.”

Ex-lawyer who pleaded guilty to Calif. scheme selling babies sentenced to 5 months in prison
[Washington Post 12/2/11 by Associated Press]

The judge “condemned her for betraying her position of trust as a lawyer, saying she sold her ‘reputation and dishonoured the practice of law.’

Neiman was charged along with Poway lawyer Theresa Erickson and Las Vegas resident Carla Chambers with running a fraud that took advantage of California’s legal framework covering surrogacy, and the desperation of couples who cannot conceive.”

Lawyer jailed for international ‘baby-selling ring’ which charged American couples more than $100,000 for a child
[Daily Mail 12/3/11]

Update 7: Theresa Erickson was sentenced to 5 MONTHS in federal custody and 9 months of home detention after pleading guilty to wire fraud. Additionally, she is required to pay a meager fine ot $70,000.She could have received 5 YEARs in prison

“The “intended parents” often paid more than $100,000, according to the plea bargain signed by Erickson.” WHY wasn’t the fine more?

“At the same hearing in the court of District Judge Anthony Battaglia, one of Erickson’s co-defendants, Carla Chambers of Las Vegas, was sentenced to five months in custody and seven months in home confinement.”

Lawyer gets five months in custody for adoption scheme
[LA Times Blog 2/24/12 by Tony Perry]

“As part of her plea bargain, Erickson signed court documents saying the surrogates were paid $38,000 to $45,000, and the couples were sometimes charged more than $100,000. In the same documents, Erickson admits that she filed phony birth certificates and health insurance forms. Prosecutors accuse her of building “an efficient business model that kept costs to a minimum.”

It seemed as if the case had been concluded without undue rancor: In exchange for a guilty plea, prosecutors would recommend home detention instead of prison, although that decision is left to the judge.

But as sentencing has approached, Erickson’s attorney has launched an attack on the U.S. attorney, the federal probation office, and the local media, starting with the prosecutors’ characterization of the case as “baby-selling” rather than wire fraud.

The result of the prosecutor’s actions, attorney Ezekiel Cortez said in a document filed with the federal court, has been to produce a “mob mentality” that could lead U.S. District Judge Anthony Battaglia to sentence his client more harshly than was imagined when Erickson signed her plea agreement.”

“Neiman surrendered her law license after the Maryland bar opened an investigation that could have led to her license being revoked, according to her attorney.

Documents show that the same could happen in California to Erickson, who once gave courses in creating a “niche” legal practice and advertised herself as an expert in “an area of law where it matters most.”

Attorney who pleaded guilty in adoptive-infants case faces sentencing
[LA Times 2/24/12 by Tony Perry]

REFORM Puzzle Piece

The former nurse befriended young American women on surrogacy messageboards, flying them to an unregulated IVF clinic in the Ukraine, implanting them with designer embryos and then selling the unborn babies in the US to the highest bidder.

They were “blonde, blue-eyed, Caucasian babies”, says Los Angeles lawyer Andrew Vorzimer, who alleges Chambers was creating white, designer children, using specially selected sperm and eggs.

“Finding a Caucasian child for adoption here in the United States is very, very difficult. They tried to fill that void.”

Heather, one of the other surrogates “duped” by Chambers is less restrained than Kim, whose designer baby was stillborn.

“She’s a very evil person.”

They thought they were acting as surrogates for specific childless couples. They say they had no idea that Chambers was making designer babies for later sale.

Heather and Kim were the last two baby mules to be flown to Lviv, Ukraine, in this six-year-long operation. Their evidence would help the FBI bring Chambers to justice.

Once the surrogates got back to the US, after the first trimester, the unborn babies would be sold to the highest bidder.

New York socialite Taylor Stein, daughter of rock promoter, Rick Stein, paid $US180,000 ($219,000) for her infant.

“You get caught up in the emotion and you lose perspective,” she told ABC news.

The FBI used Stein and the two surrogates in an undercover wiretap to crack the unusual criminal enterprise.

“It kind of crosses over into the realm of Brave New World or a science fiction novel,” says FBI special agent Bradlee Godshall, who is here for the final chapter, the sentencing of Chambers and her associate, high-profile lawyer Theresa Erickson.

Erickson, a renowned surrogacy specialist with her own radio and television shows, provided the stamp of authenticity. She would file false documents showing that the unborn babies had been commissioned by fictitious parents.

Erickson brings bodyguards and a family entourage for her entrance to court. Her fall from grace has fascinated the US media. Tall, blonde, dark glasses, downcast head, she is just visible above the melee.

Her lawyer will point out that her husband served his country in the US Marines. She will tell the court that she “lost her way”, breaking down in tears, hugging and apologising to the surrogates.

Inside the court, Judge Anthony Battaglia names Chambers as a kingpin.

She was investigated by New Zealand police 12 years ago for inseminating Kiwi women at her home in Avalon with a view to selling the babies to childless couples in the US. She was convicted of fraud and received 200 hours’ community service.

Chambers arrives five minutes before proceedings start in a fast-moving party of two. A reporter suggests that some consider her a monster. “Wow, that’s tough,” says her smiling defence lawyer, Michael Berg. Chambers says nothing.

A quiet apology from Chambers in the dock: “I am actually very sorry for the way this turned out.”

Erickson and Chambers were sentenced to five months in jail. ”