Authorities Drop Baby-Selling Case

Federal prosecutors on Friday dropped their case against an Irvine woman who they had alleged brought as many as 30 pregnant women here from Hungary to help sell their babies to California couples.

The withdrawal of the case does not necessarily end the government’s investigation of Marianne Gati, who had been suspected of playing a major role in an international baby-selling ring but had only been charged with tax evasion stemming from her adoption business.

Acting on a tip from Hungarian police, authorities in June said they were investigating Gati on suspicion of money laundering, tax and mail fraud, and harboring illegal immigrants stemming from what they believed was a baby-selling ring. Authorities said Gati arranged for poor, pregnant Hungarian women to come to Orange County to sell their babies for cash.

But a federal grand jury indictment later accused Gati, along with her husband, Thomas, only of filing false tax returns for the last four years, alleging that they had failed to report income earned from the wife’s adoption business.

The government suffered a major setback last month when U.S. District Court Judge Alicemarie H. Stotler ruled that federal agents did not have reasonable grounds to suspect Marianne Gati of wrongdoing when, armed with a search warrant, they confiscated 15,000 pages of documents from her home in June. Stotler’s ruling prevented the prosecution from using as evidence that material or any information garnered from the search.

On Friday, Assistant U.S. Atty. J. Daniel McCurrie told Stotler that the government wanted to withdraw the case “without prejudice,” leaving prosecutors the option of refiling charges in the future.

“We have to go back and look at what we have and decide whether to proceed or not,” McCurrie said after a brief appearance before the judge. “All options are open at this point.”

The Gatis, who had been free on bail, joyfully celebrated with their attorneys outside the federal courthouse. Federal public defender H. Dean Steward insists Gati ran a legal adoption business, but he said she would be abandoning it because of what she’s been through.

“There’s been too much controversy, too much heartache,” Steward said. “I think at this point they just want to get on with their lives. It was a lengthy odyssey, and my client went through hell.”

Marianne Gati, a Canadian citizen who was born in Hungary, said she always believed she would be cleared.

“The best defense was the truth,” she said. “I am innocent, and I should not have been treated this way. You have no idea what they did to me. They killed my soul. But I kept my faith because I know I’m innocent.”

Gati added that she is “just too hurt” to talk about the case in detail but plans to write a book about it in the future.

Her international adoption business has also been the subject of an investigation in Hungary. Police there say they are investigating whether Hungarian nationals, including one of the country’s top doctors, put Gati in contact with poor, pregnant women who eventually came to Orange County to sell their babies for cash.

The agents said they secured a search warrant for Gati’s house after Hungarian police asked officials at the American Embassy in Vienna for help in their investigation of Gati’s adoption business. Steward said he believed Hungary was still investigating the case.

Federal agents had maintained that Gati provided airline tickets and other travel documents for poor Hungarian women to come to Orange County. Prosecutors also alleged that Gati promised to pay each mother “$1,000 for a baby with dark features and $12,000 for a baby with light features.”

The Hungarian police provided federal agents with the names of two pregnant women who came to Orange County in 1995 and were paid $1,000 each for their babies.

Aside from the six boxes of documents confiscated from Gati’s home, officials also seized $400,000 from her bank account. Steward said he expects that the government will now have to give that money back. He believes the government’s case merely should have been a tax audit.