Fertility Inc.: ‘Our Money Was Gone’

8:46Ben Foldy:Feels right.

8:47Ryan Knutson:It had been difficult and expensive to get there, but Anna-Marie and her husband finally had a child, and they didn't want to stop there. They still had three embryos left. For their next attempt, they went with the same surrogacy agency as before, this time taking a second mortgage out on their house to cover the cost. Then, their third embryo was implanted into a surrogate.

9:16Ben Foldy:We got through the transfer. We ended up having a miscarriage.

9:26and I was

9:30Ben Foldy:so depressed, so devastated. It was incredibly hard. Our chances were dwindling to have another child.

9:45Ryan Knutson:But there was still a chance. So they and their surrogate geared up to implant another embryo, one of the two they had left. That's when Anna Maria got a phone call that changed everything.

10:00Ben Foldy:Two weeks after the miscarriage, we get a call from our agency that our surrogate wasn't being paid.

10:13Ben Foldy:That they can't get a hold of anyone who knows what's going on. I remember we were leaving my son's well check appointment when we got that phone call from the agency. And I looked at my husband and he just goes, our money's gone. And I was like, no, there's got to be a mistake. Like, we're fine. There's got to be a mistake. There was absolutely no mistake. Our money was gone.

10:43Ryan Knutson:What happened to the money is after the break.

11:11AnnaMaria Gallozzi:We'll see you next time. So you can be a little bad. Join their 19 million customers today at Empower.com. Not an Empower client paid or sponsored. This episode is brought to you by Alexa Plus. Say hello to Alexa Plus and see how Alexa can do more for you. Need tickets to that last minute show? Craving your favorite restaurant? Sit back, relax, and talk naturally. Alexa's on it. Alexa learns your preferences to create a personalized experience. And now Alexa Plus is free with Prime on your Amazon devices like Echo and Fire TV. Learn more at Amazon.com slash Alexa Plus.

12:00Ryan Knutson:Our colleague Ben Foldy is on the Wall Street Journal's investigations team. And he's been digging into the financial side of the booming surrogacy industry.

12:08AnnaMaria Gallozzi:It's not something I'd really thought about before. It's not usually something we talk about at the journal. and then as I kind of dug into understanding it, I just got fascinated by this market.

12:20Ryan Knutson:What was so fascinating to you about it?

12:22AnnaMaria Gallozzi:That it's a market, and I think that makes people uncomfortable. It lends itself to what does a market for human life mean, and what should it mean? And people would be like, well, you're calling it an industry. It's like, well, yeah. At the Wall Street Journal, industry is not a dirty word. Like, it's not pejorative to call something an industry.

12:46Ryan Knutson:But people that are in the surrogacy world sort of felt like...

12:47AnnaMaria Gallozzi:Yeah, because I think there's a strong discourse of it's super emotional, right? There's nothing more emotional and neurotic and jarring than parenting, right? Right. And now you're putting that in a contractual relationship.

13:01Ryan Knutson:Altogether, a surrogate birth can end up costing more than$150 ,000. And assigning dollars and cents to every step of the process can be awkward. Then there's the matter of actually paying the surrogate. Intended parents typically don't want to pay everything up front before they get a baby. And surrogates want some assurance that they're going to get paid before they carry someone else's kid. The industry's solution to this problem is a common financial instrument known as an escrow account.

13:34AnnaMaria Gallozzi:I think most people's experience with escrow will be a house, right? Like the sale transaction of a house.

13:43Ryan Knutson:With a house, buyers put their down payment into an escrow account, which is controlled by a third party. Once the transaction is closed, the money is released to the seller, and both parties go their separate ways. With fertility escrows, though, things are more complicated. And these escrow companies play a much more active role.

14:03AnnaMaria Gallozzi:The escrow provider is not only dealing with releasing money to the surrogate, They're also dealing with making payments to the insurance companies and the doctors and the agencies and, you know, any fees that come up. You know, let's say your surrogate needs to go on bed rest and can't work anymore. And then so the contract provides for that money. And then so the escrow agent is not only releasing the funds, but evaluating the contract between both parties to be like, OK, this this condition has been met. This money can be released. So it's almost like kind of like an administrative payment processor as much as it is an escrow.

14:44Did you even think about escrow?

14:46Ryan Knutson:Like, or was it just sort of among the checklist of items from the surrogacy agency?

14:52Ben Foldy:It was just among the checklist items. I'll be honest with you. I was just excited at the possibility of having a kid. An agency who I vetted, I trusted. I did my full background on, told me this is a requirement. Great. Let's go.

15:09Ryan Knutson:Anna Maria used an escrow company called SEAM, which stands for Surrogacy Escrow Account Management. At the time, SEAM was one of the biggest companies in the space, with hundreds of clients. And Anna Maria had a good experience with the company during her first surrogacy, especially when things got complicated with a surrogate.

15:27Ben Foldy:They were phenomenal.

15:28Ryan Knutson:When you say they were phenomenal, what do you mean?

15:31Ben Foldy:In our journey, there were points where our surrogate was asking for more money or at different intervals. And Seam actually came in and was like, nope, that's not in the contract. Nope, you're at your limit already. Or would call me and be like, hey, do you want to approve this or deny this? They were heavily involved. I trusted them. They were another part of my team, it felt like.

15:53Ryan Knutson:But Ben would learn that there were things going on behind the scenes at the escrow company. In 2024, Ben got a tip from a family that used Seam. They told him that the company had lost all their money, and they weren't the only ones.

16:12AnnaMaria Gallozzi:So Ben started digging into Seam. So Seam, it was run by a woman named Dominique Seid, who was herself a surrogate. And she was kind of well-respected in the industry, was speaking on panels at industry conventions and things like that. But Dominique Seid also had kind of a other interests, let's say.

16:38Ben Foldy:You have built a boutique vegan grocery store, founded a luxury vegan clothing line, and you are the co-owner of the Vegan Bay music group.

16:46Ryan Knutson:That's a host introducing Dominique Seid on a podcast. In Seid's response.

16:51Ben Foldy:It's honestly sometimes a good reminder because when you're in it, like doing all the things, you don't really get really like, I do all these things.

17:05AnnaMaria Gallozzi:She had a rap career. She had a fashion line, like a vegan fashion line. She had these other businesses and spend that she was not really shy about.

17:21Ryan Knutson:These other businesses didn't seem like a big deal. But after some of their escrow payouts were delayed, Seam clients alleged that Side was funding her businesses with their money. Money that they'd put aside to have children.

17:34AnnaMaria Gallozzi:What everybody figured out pretty quickly once they learned that the money was gone was that all of those other assets, the recording studio, almost an entire subdivision worth of land that wasn't developed yet, Almost all of that money came from parents putting their money into Seam for escrow.

17:59Ryan Knutson:Parents like Anna Maria. Anna Maria had seen Dominique Side's social media, which she says depicted a pretty lavish lifestyle, but she didn't think much of it. Until she got that phone call at her son's well-check appointment and learned that the$50 ,000 she'd cobbled together to try and expand her family was gone. How are you feeling amid all this?

18:24Ben Foldy:I'm angry. I'm beyond angry. I'm upset. We never once thought that we could put our money in a trusted escrow and then have it be gone. No, I put it in escrow. It's supposed to be safe. It's secure. This is supposed to be scam-free.

18:45Ryan Knutson:Do you think you'll ever get any of the money back?

18:48Ben Foldy:No, that's gone. It's long gone. Yeah, it was probably used for a yacht experience.

18:57Ryan Knutson:In total, according to court documents, more than 600 families lost about$16 million through escrow accounts managed by Seam. Dominique Seid didn't respond to our requests for comment. Ben reviewed documents showing Seam was in major financial trouble. It owed thousands of dollars in property taxes. It had lenders going after it for$1.2 million in unpaid debts. As more families discovered their money was gone, the scandal became public. In court filings, Dominic Seid is accused of using hundreds of her clients' money in a fraudulent way to fund a lavish lifestyle. Around three dozen families ended up suing Seam in Texas state court.

19:45Ryan Knutson:The families alleged breaches of contract and fraud and sought to recover more than$1.7 million they had on deposit at Seam.

19:52AnnaMaria Gallozzi:They say Dominique Seid used that cash for global travel, luxury expenses, and designer clothes she showed off at big events. Seid is accused of using the money to create her own music videos as she launched her music career as a rap and R &B singer for trips all over the world.

20:14Ryan Knutson:Anna Maria decided not to join the lawsuit, partly because she worried it would limit her ability to talk publicly about what happened.

20:26Ryan Knutson:Dominique Side never appeared in court, but a judge ruled that she owed the families in the lawsuit over a million dollars in damages. She hasn't paid. In an email, the plaintiff's attorney declined to comment. The FBI office in Houston also opened an investigation into SIEM.

20:44AnnaMaria Gallozzi:One of the things that stood out to me was how escrow is such a boring word and concept that this seemed like the lowest risk part of the whole process. Like, you're like, oh, I got to worry about whether or not this embryo is going to take, and I got to worry about a delivery, and I got to worry about, you know, can I trust the person who I'm putting the embryo in? and you have to, there's so much, there's so many stressors. And it's like, oh, well, the person just has to hold on to the money and disperse it according to a contract. Like, that's the easiest part of this. Like, why would I worry about that part?

21:15Ryan Knutson:Yeah, with all the rules that exist around the financial industry, it makes me wonder how this was even possible.

21:22AnnaMaria Gallozzi:There just isn't regulation. Like, it's a completely, a nearly completely unregulated market.

21:28Ryan Knutson:Ben says that practically anyone can set up their own surrogacy escrow company. All they really need is a bank account.

21:35AnnaMaria Gallozzi:It's just an LLC with a normal bank account like Capital One and making whatever representations they made to Capital One about where the money was and where it should go. There's not like a state regulator to knock on the door and say, hey, do you have a, you know, money services business license? What are your internal procedures? Like, how do you segregate the money? How do you do all that? Like, who's going to check?

22:04Ryan Knutson:After their experience with Seam, Anna Marie and her husband still had two embryos left. They were tired and scared, but they wanted a hockey team, remember? They still had so much love to give. They'd used up their inheritance and couldn't take out another mortgage on their house. So to save on costs, they asked a friend to be their surrogate. And last summer, they tried with their fourth embryo.

22:36Ben Foldy:and that ended in a miscarriage. And at that moment, I decided I can't do it again.

22:47Ben Foldy:It was, this was too much. The universe won. I saw the signs this time. I can't do it again. And so we are not doing surrogacy again.

22:59Ryan Knutson:Even though you've got that one embryo, what are your plans with that?

23:03Ben Foldy:To be determined. Mm-hmm. Yeah.

23:09Ryan Knutson:I'm sorry.

23:20Ryan Knutson:Even with everything that's happened, Anna Maria says she feels grateful. Because despite the fertility industry's flaws, it did give her Michael, her son. He'll turn five in a few months.

23:32Ben Foldy:And he's really into science right now. So I'm pretty sure he's downstairs watching Ada Twist, the scientist, and trying his own experiments. Our poor dogs, our poor house right now, as he takes everything apart and tries to put it back together.

23:49Ben Foldy:I am so present in the moments that I get to spend with him, and I'm not taking them for granted.

23:54Ryan Knutson:Yeah.

23:55Ben Foldy:I have a different outlook on life of, like, every day is a blessing.

23:59Ryan Knutson:Mm-hmm. It's amazing to me also just, like, how hard it can be to create a little baby.

24:08Ben Foldy:A little baby that's going to torment you for the next however many years, right?

24:12Ryan Knutson:Uh-huh.

24:17Ryan Knutson:Next week, we'll bring you another story from the fringes of the fertility industry. I do met a potential client. They wanted 200 kids. And this time, we'll get into the industry's super users. You had a client who said they wanted 200 kids? Yeah.

24:43Ryan Knutson:That's all for today, Friday, March 13th. The Journal is a co-production of Spotify and The Wall Street Journal. The show is made by Catherine Brewer, Victoria Dominguez, Pia Gadkari, Isabella Jepal, Sophie Codner, Matt Kwong, Jessica Mendoza, Annie Minoff, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Alan Rodriguez Espinosa, Heather Rogers, Pierce Singhi, Lisa Wang, Catherine Whalen, Tatiana Zamis, and me, Ryan Knudsen. This episode was produced by Jivica Verma and edited by Colin McNulty. Our engineers are Griffin Tanner, Nathan Singapak, and Peter Leonard Our theme music is by So Wiley And is remixed for this episode by Peter Leonard Additional music this week from Peter Leonard, Billy Libby, Bobby Lord, Nathan Singapak, Griffin Tanner, So Wiley, and Blue Dot Sessions Fact-checking this week by Mary Mathis and Kate Gallagher Thanks for listening, see you Monday

26:15AnnaMaria Gallozzi:We'll see you next time. Visit USA.com slash disclaimers for full disclaimers.