College Park, Maryland: A Florida man is facing up to 20 years in jail on charges of defrauding Australians and other clients who hoped to become parents, via a company that offered to locate and financially support pregnancy surrogates.
Gregory Ray Blosser, 37, was arrested on Monday in Florida on a wire fraud charge, according to federal prosecutors.
Blosser has operated The Surrogacy Group since 2012, with offices in Annapolis, Maryland, and Tampa, Florida. Clients paid Blosser tens of thousands of dollars to find surrogates and support them during pregnancies.
A British couple’s baby born to a surrogate mother in Anan, India.Credit:AP/File
Blosser failed to either locate suitable surrogates or pay for their fees or medical expenses after clients deposited money into escrow accounts, a criminal complaint says.
"The victims were not able to obtain refunds, despite numerous attempts by phone and email," a Justice Department statement said. "Victims whose surrogates were not paid by Blosser had to pay the surrogates directly, even though they had provided funds to Blosser for that purpose."
The criminal complaint details how an Australian couple, known as V2 and V3, signed a contract with Blosser in 2016 and wired $US14,500 from their Australian bank account to TSG.
"The contract outlined the services to be provided by TSG, which included matching the couple with a surrogate," the complaint, written by FBI special agent Laura Goshen, states.
In May 2017 Blosser allegedly located the first potential surrogate, a phone call was set up so the Australians could talk to the woman, however "the fertility clinic used by V2 and V3 denied the surrogate based upon her medical background".
Another potential surrogate was found and the couple wired $US35,000 to TSG to set up an escrow account for the "surrogate's base fee", prosecutors said.
Blosser allegedly did not pay the surrogate's travel expenses for an embryo transfer procedure, medical testing, invasive procedures and a $US3500 monthly allowance for "every month after the baby's heartbeat was confirmed".
The Australians asked Blosser to transfer their funds in the escrow account to a new account controlled by another company, but Blosser allegedly did not do it.
"According to V2 and V3, Blosser maintains approximately $US34,500 of V2 and V3's funds in the escrow account," the complaint states.
An assistant federal public defender who represented Blosser at his initial court appearance on Tuesday didn't immediately respond to a request for comment.
Blosser's victims include seven clients also from Maryland, North Carolina, Virginia and Germany who collectively paid Blosser approximately $US200,000, according to the FBI agent.
"The allegations in this case are especially egregious because they involve someone taking advantage of individuals who are trying to become parents," US Attorney Robert Hur, of the District of Maryland, said in a statement.
"Criminals who line their pockets through such heartless deceit will be held accountable."
Blosser also faces civil lawsuits in Maryland and Florida, including complaints filed by the Attorney- General's offices in both states.
An investigation by Florida Attorney-General Ashley Moody's office concluded that The Surrogacy Group and Blosser collected approximately $US270,000 from clients for services they didn't render.
"The Surrogacy Group and [Blosser] portray themselves as trusted guides, but for many they have betrayed this trust by taking tens of thousands of dollars and then abruptly stopping services or providing no services at all," the Florida complaint says.
On April 22, a circuit court judge in Maryland issued a temporary restraining order barring Blosser from selling surrogacy-related services in the state, according to state Attorney-General Brian Frosh's office.
The FBI has set up a webpage to identify and contact other clients who may have been defrauded by Blosser and The Surrogacy Group. TSG's own website was still up at time of publication.
A federal magistrate judge ordered Blosser released on $US100,000 bond after his detention hearing on Friday, US time, according to a spokeswoman for the US attorney's office in Miami.
Blosser, a resident of Tampa, is expected to make his initial court appearance in Maryland on May 17. He faces a maximum sentence of 20 years in prison if convicted of the wire fraud charge.
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