Scam targeted surrogates as well as couples

Chatting with women on websites for surrogate mothers, Melissa Todd stumbled upon an unusual opportunity.

It required foreign travel — a quick trip to the Ukrainian city of Lviv to be impregnated using embryos created in vitro from sperm and eggs of donors. The pay was $38,000, nearly double what she had made the one previous time she had been a surrogate.

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.

She was reassured to hear that prominent attorneys were involved: Theresa Erickson of San Diego County, whose specialty was reproductive law, and Hilary Neiman of Maryland, a name familiar to anyone on surrogacy message boards.

A call to Neiman put any doubts to rest. “She assured me that everything Carla was doing was legal,” Todd said.

A month later, in January 2010, Todd met Chambers in Ukraine, where embryos were implanted in both women.

It would take six months for Todd to learn that she had been recruited into a criminal enterprise — and months more for the FBI to collect enough evidence to break it up. Over the last few weeks, Erickson, Neiman and Chambers have pleaded guilty in federal court in connection with what prosecutors described as a “baby-selling ring.” Both lawyers were charged with wire fraud, and Chambers was charged with “monetary transactions in property derived from illegal activity.” All three are awaiting sentencing.

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

Interviews with Todd and two other women hired as potential surrogates, along with documents filed in court, show how the operation worked — and how it unraveled.

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.

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.

Prosecutors say they identified 12 couples who received babies. Todd and the two other intended surrogates suggested the number could be substantially higher. Each of the three said Chambers told them that she arranged trips for multiple women every few months and that she herself had carried and delivered at least half a dozen babies for the business.

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.

She found a couple nearby, but two attempts to get pregnant failed. That made her even more determined as she searched surrogacy want ads.

“I was responding to anything and everything,” she said. “That’s how desperate I was.”

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.

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.

In September of 2010, Todd delivered a five pound, 12 ounce boy with reddish hair and light eyes. A Las Vegas couple adopted him, and Todd visits him regularly.

Albaugh gave birth two months later. It was a girl, also just under six pounds. She too was adopted — by the Dallas couple that Albaugh had originally tried to help. The two families remain close.

alan.zarembo@latimes.com

Times staff writer Tony Perry in San Diego contributed to this report.