Uncovering A Shocking Surrogacy Scam Impacting Hopeful Parents

Pregnant woman holding her belly, sitting comfortably.

A San Diego surrogacy consultant’s fraudulent scheme shatters dreams and drains nearly $400,000 from hopeful parents.

Key Insights

Lillian Markowitz, operating under the alias Lilly Frost, pleaded guilty to defrauding clients of her surrogacy consulting businesses.
Markowitz stole nearly $400,000 from nine clients between January 2019 and May 2021.
The scam involved fraudulent requests to an escrow company, including forged client signatures.
Victims fear their leftover embryos may have been secretly sold to other clients.
Markowitz faces up to 20 years in prison and has agreed to pay at least $389,142 in restitution.

Elaborate Scheme Uncovered

Lillian Markowitz, also known as Lilly Frost, has admitted to orchestrating a complex fraud scheme through her San Diego-based surrogacy consulting businesses. The companies involved in this deception were My Donor Cycle, Surrogacy Beyond Borders, and Expecting Surrogacy. From January 2019 to May 2021, Markowitz systematically defrauded nine clients by falsely promising that their funds would be secured in an escrow account.

Instead of safeguarding client funds as promised, Markowitz deposited them into a business checking account for personal and business expenses. She created an elaborate scheme to steal money by submitting fraudulent requests to an escrow company holding her clients’ funds, even going so far as to forge client signatures. This betrayal of trust has left many aspiring parents devastated, both emotionally and financially.

Impact on Victims

The impact of Markowitz’s actions on her victims has been profound. One client, Gabrielle Ackerman, experienced failed surrogacy attempts due to substandard medical care in Mexico, where Markowitz had promised low-cost surrogacy services. Tragically, Ackerman’s last attempt resulted in a premature birth at 28 weeks, with the baby not surviving. Adding insult to injury, the promised ashes were never sent to the grieving parents.

“She had brilliantly hidden everything beneath the surface,” said Ackerman.

The victims’ ordeal doesn’t end with the financial loss. Many now fear that their leftover embryos may have been secretly sold to other clients, adding another layer of emotional distress to their already traumatic experience. Ackerman expressed this concern, stating, “I’m holding onto hope that our other embryos weren’t sold.”

Legal Consequences and Restitution

Markowitz now faces severe legal consequences for her actions. She has been charged with wire fraud under Title 18, U.S.C., Section 1343, which carries a maximum penalty of 20 years in prison and a $250,000 fine. As part of her plea agreement, Markowitz has agreed to pay at least $389,142 in restitution to her former clients. Her sentencing is scheduled for April 11, 2025.

“The path to parenthood through surrogacy can be fraught with emotional and financial challenges.” McGrath said.

U.S. Attorney Tara McGrath and FBI Special Agent Stacey Moy have strongly condemned Markowitz’s actions, emphasizing the exploitation of vulnerable clients. The FBI San Diego Field Office is encouraging potential victims to come forward and contact them. The case is being prosecuted by Special Assistant U.S. Attorney Jeffrey D. Hill and Assistant U.S. Attorney Mark W. Pletcher, with the FBI as the investigating agency.

Broader Implications for the Surrogacy Industry

This case highlights the ongoing challenges within the surrogacy industry, where hopeful parents may find themselves vulnerable to scams. It underscores the need for stricter regulations and protections in this sensitive and complex field. The emotional and financial toll on victims serves as a stark reminder of the potential risks involved in surrogacy arrangements, especially when dealing with businesses promising low-cost options through international outsourcing.

“Instead of aiding her hopeful clients on their path to parenthood, the defendant took advantage of their vulnerability, betrayed their trust, and stole their money,” said Special Agent Moy.

As the legal proceedings against Markowitz continue, this case serves as a cautionary tale for those considering surrogacy services. It emphasizes the importance of thorough research and due diligence when selecting surrogacy consultants and agencies. The surrogacy industry may face increased scrutiny and calls for reform in the wake of this high-profile fraud case, potentially leading to more robust protections for intended parents and surrogates alike.