The Mystery of the Mansion Filled With Surrogate Children

0:04In the Los Angeles suburb of Arcadia, there's a lavish nine bedroom mansion surrounded by palm trees. It's fronted in pale faux stone. It has two turrets on either side of the front door. Back in May, police showed up outside of this very fancy home. Right away, something seemed unusual. They might have noticed the surveillance cameras. They were outside the house and the warning that it was protected by armed security guards. The reason police were there? An L.A. hospital had called authorities after treating a two-month-old baby with head injuries that suggested child abuse. Inside, they found 15 children, none of them older than three years old, all with buzzed haircuts under the care of six nannies.

0:57Even more surprising, investigators learned that all of the children belonged to the same couple and that many of them had been born through surrogacy. My colleague Catherine Long has been following the case. Now, federal authorities are investigating whether this couple may have been selling the children that they created through surrogacy. That's according to interviews that we've done with surrogates who carry some of the children who've spoken with federal agents in recent weeks. The FBI declined to comment. The couple maintains that nothing they've done is against the law. The story has put the U.S.

1:37surrogacy industry on edge, an industry that is worth billions of dollars. Surrogacy industry professionals we've spoken to say this case is the number one topic of conversation within the industry currently. And it has the potential to upend some of the ways that the surrogacy industry has operated. Wow. This seems like it's kind of opening up a Pandora's box here. That's right. Yeah.

2:04Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Friday, August 15th.

2:18Coming up on the show, the mystery of the mansion filled with surrogate children.

2:36The mansion in Arcadia was the home of Sylvia Zhang and Guo Jinxuan. For years, they ran an extensive real estate business, operating it with a group of businessmen based in China. The couple, who both lived in China before moving to the U.S., has said they're now American citizens. Through the business, Sylvia and Guo Jinxuan bought up properties all over the L.A. area. They told local police that all 15 of the children were theirs, along with another six kids that authorities found living in other homes in the area. And Sylvia showed the investigators birth certificates that seemed to corroborate that.

3:12But what investigators noticed was that for many of the children, their births had taken place all over the country and in pretty quick succession. That confused them and it prompted them to call in the FBI. The FBI soon learned that Sylvia was also listed on a filing as the manager of a surrogacy business, one that seemed to operate out of that same mansion where the children were found. This home in Arcadia was also the headquarters of a company called Mark Surrogacy. It's a surrogacy agency that means that it connects people who want to become parents with people who are willing to bear children for them.

3:49From the outside, they looked like just another small surrogacy agency like many others that operate in Southern California. Okay, let's take a step back. How does surrogacy usually work? Surrogacy is a process whereby people who want to become parents, who want to have children, but usually can't, either because they've been struggling with infertility, because they are gay or lesbian, they work with somebody who is willing to bear that child for them. What about the business model? Can you explain that? So intended parents, they contract with a surrogacy agency. That surrogacy agency typically has a roster of people who are willing to become surrogates.

4:36The intended parents look through maybe a book, a lookbook of potential surrogates. And there's a process of going back and forth until there's a match between intended parents and surrogates. The surrogate is then implanted with an embryo that's formed either from the parent's egg and sperm or from a donor egg and donor sperm. The surrogate carries that child for nine months, and then the intended parents, as they're called in industry speak, take the child home from the hospital. It's their child. They raise it. The intended parents typically pay the surrogacy agency a fee. They also might pay the surrogate for carrying the child and cover associated medical fees.

5:21All told, surrogacy can cost between$150 ,000 and$300 ,000, according to industry professionals. And this is legal, right, in the U.S.? That's right. It's completely legal in the U.S.

5:37In other countries, like Spain, Germany, and China, surrogacy is not legal. That's led many people to come to the United States for their surrogacy needs. And that, in turn, has fueled the industry's rise. Between 2014 and 2020, one-third of intended parents in the U.S. were from other countries. Some agencies marketing their services to international parents explicitly promote an additional benefit, U.S. citizenship for the newborns. Which, if a parent is trying to ensure that their child has a good chance of success, may be something that's attractive to them.

6:14But for as big as the industry has gotten, there's no federal oversight. And when it comes to state regulations, only New York requires agencies to be licensed. It's a lightly regulated industry, so there's a patchwork of laws state by state governing how surrogacy contracts are negotiated and enforced. The surrogacy industry is, to a large extent, self-governing. There are industry groups that promulgate standards of ethical guidelines. And in order to become a member of those groups, a surrogacy agency would self-certify that they comply with the ethical guidelines. But effectively, surrogacy agencies are in charge of policing themselves.

6:58That was the case for Mark Surrogacy, the agency that was managed by Sylvia Zhang. Mark Surrogacy did not list an affiliation with an industry group. That means they were not certified as following ethical guidelines. That's not necessarily strange. Plenty of agencies don't do that. What else can you tell us about that agency? Mark Surrogacy marketed itself as just another surrogacy agency. On their website, they said that they connected intended parents from America and abroad with people who were willing to carry children for them. On Facebook, they posted glowing reviews and images of surrogates.

7:35The Wall Street Journal talked to multiple women who acted as surrogates for the couple. They live across the U.S. and were paid tens of thousands of dollars each. One of those women is named Vanity McGovern. Vanity McGovern is a Los Angeles beautician. She wanted to become a surrogate because she wanted to help a couple who wasn't able to have children have a child of their own. She, like many surrogates, began posting on surrogacy groups on Facebook saying, I'm interested in getting involved with this. I'm interested in becoming a surrogate. Pretty soon, a woman reached out to her on Facebook.

8:11They said, I saw your posts. I would love to speak with you about becoming a surrogate. The person that Vanity was messaging with was Sylvia Zhang, though Sylvia at first gave a different name and didn't reveal that she was also the manager behind Mark's surrogacy. Sylvia made her a deal that seemed very attractive. Vanity didn't have a place to live at the time she started talking to Sylvia. Sylvia said, oh, I happen to manage a real estate company that owns a lot of properties in the Los Angeles area. I'll put you up in one of those homes and I'll pay you$55 ,000 to become a surrogate for me.

8:46And what did Sylvia say about who Vanity would be carrying this child for? Sylvia told Vanity that she'd be carrying a child for Sylvia and a man she identified as her husband, Guo Junxuan. She said that they were a Chinese couple living in Los Angeles, that they didn't have any children, and that Vanity would be giving them a gift by helping them become a family. But it didn't take long before Vanity started to feel like something was off.

9:16We'll be right back.

9:32Vanity McGovern thought she was becoming a surrogate for a childless family. But soon after she became pregnant, she started to notice some red flags about the intended parents. Sylvia and Guojun didn't come to her prenatal doctor's appointment. They seemed somewhat uninterested in the progress of the pregnancy. Not at all like prospective parents might be, who would probably be like there every second. It was not what Vanity expected.

10:00Towards the end of her pregnancy, Sylvia showed her a photo of a girl who looked like a teenager and said, oh, this is my daughter. Vanity told me that she was shocked by that because for the bulk of the pregnancy, she thought that Sylvia was childless. And all of a sudden, she learned that Sylvia had been a mom all along. That felt like a betrayal to her because she had wanted to help people who couldn't have children of their own. And now she learned that Sylvia has had a child this entire time. Vanity had the baby girl she was carrying in March. The baby was placed in Sylvia Zhang and Guo Junshun's care.

10:37But a few months later, Vanity heard that something bad had happened to a baby birthed through Mark's surrogacy. She felt worried for the safety of the child she'd given birth to. Then, the news story broke. Yes, a husband and wife under arrest after police found their home packed with surrogate children. And the number of children involved in the bizarre story is staggering. Sylvia and her husband were arrested under suspicion of child abuse. They were released four days later without charges. The children were placed in foster care. Police also seized video footage from the mansion's surveillance cameras, which showed that toddlers were spanked, slapped, and forced to do squats.

11:19The footage also showed a nanny shaking the baby that was later hospitalized. Vanity called Sylvia asking for an explanation. Sylvia told her at that point that her children had been taken by the county, and it was only then that Vanity learned that Sylvia had as many children as she does. Vanity was floored.

11:41Did the other surrogates you spoke to have similar experiences? What did Sylvia tell them? She seems to have told them different things, but their experiences are largely similar in that they felt that they had been deceived by Sylvia. Some of them had been told that she had no children. Some had been told that she had one child. Some were recruited by employees of Mark's surrogacy. Some were recruited by Sylvia herself. At least two other surrogates working with Mark's surrogacy are still pregnant. When you spoke with Sylvia, what did she tell you about the business, about the children? Sylvia told me that all of the children were hers and that she loves them.

12:20She told me that the business, Mark Surrogacy, only worked with her and Guo Jun, that they didn't have any other clients. As Sylvia told me many times in our interviews, there's nothing illegal about wanting to have a large family. Her partner, Guo Junxuan, didn't respond to requests for comment. This is one case. It's bizarre, but it is one case. What does this mean for the surrogacy industry? The surrogacy industry professionals I've spoken to are at pains to point out, as you said, that this is one case and that it does not represent the surrogacy industry as a whole. But it's possible that more regulation could make this space safer for parents and surrogates.

13:04Some types of regulation that have been proposed would end up looking like something like a registry for intended parents or a registry for surrogates. One tension here is that I think very few Americans would want the government to begin dictating what an ideal family looks like, how many surrogates a couple could work with, how large a family could be. And I expect there would also be some resistance to creating a registry of people who are seeking to become parents through surrogacy.

13:35As of now, the investigations into the couple, the children, and Mark's surrogacy are ongoing. This is a case that is surrounded in mystery. It's not clear why Sylvia and Guo Jun established this surrogacy company. It's not clear where the investigations might lead. It's not clear how necessarily they financed so many surrogacies. It's not even clear how many children they had in total. That's something that Sylvia wouldn't confirm for me in our conversations. Wow. Surrogates that we've spoken to are most concerned about the children. They feel that these children are innocent bystanders in this situation and they worry about what might happen to them in the future.

14:33That's all for today, Friday, August 15th.

14:58Alan Rodriguez Espinosa, Heather Rogers, Pierce Singhi, Jiva Kavirma, Lisa Wang, Catherine Whelan, Tatiana Zamis, and me, Jessica Mendoza. Our engineers are Griffin Tanner, Nathan Singapak, and Peter Leonard. Our theme music is by So Wiley. Additional music this week from Peter Leonard, Bobby Lord, Nathan Singapak, Griffin Tanner, and Blue Dot Sessions. Fact-checking this week by Kate Gallagher.

15:28Thanks for listening. See you on Monday.