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Tune in Friday at 10 p.m. ET for our special program "Making Babies." America Tonight's correspondents investigate the billion-dollar international surrogacy industry.
Jonah Winn-Lenetsky and Chris Pommier have wanted children ever since they started dating in college more than a decade ago. Last year, the New Mexico couple thought they had finally found a solution in Cancun, Mexico – the newest destination for Americans seeking international surrogacy.
"You could see the Caribbean and the blue waters and it was amazing and it was gorgeous," Pommier said. "We put our wishes out into the universe there."
The couple had gone south of the border to visit an agency called Planet Hospital.
Since 2006, the California-based medical tourism company had helped Americans with surrogacy and other medical practices in India. But when the country enacted regulations in recent years that restricted gay couples, single parents and those married for less than two years from pursuing surrogacy there, Planet Hospital turned its focus to Mexico, specifically Tabasco, the single Mexican state that doesn't regulate against surrogacy. As long as the baby is born here, just a day's trip from Cancun, all surrogacy contracts are enforceable, and the intended parents – regardless of their sexual orientation – are recognized as the rightful parents.
Planet Hospital helped Winn-Lenetsky and Pommier select an egg donor, arranged a visit with fertility clinics and promised them a willing Mexican surrogate mother to carry their child – all at a fraction of the cost of surrogacy in the U.S.
Having someone else carry a baby to term often exceeds $100,000 in America, but in Mexico, the couple expected to pay about $45,000 in total. And though there are other popular international hotspots where surrogacy is similarly cheap, going to Mexico meant no visa hassle, no long flights and no time differences. Everything seemed to have finally come together.
"We were so hoping that that was going to be the time," Pommier said.
But it wasn't. After wiring Planet Hospital thousands of dollars, they say, the company failed to deliver on its promises – or return the more than $20,000 they had spent in the process.
In January, the company removed surrogacy from their list of medical tourism procedures. According to documents obtained by America Tonight, Planet Hospital – which denies any wrongdoing – is now in bankruptcy.
Winn-Lenetsky and Pommier are just one of more than 40 couples who say they were victims of Planet Hospital, which is now under federal investigation, accused of bilking their clients of nearly $1 million in total and leaving them without the one thing they were looking for: a baby.
A cautionary tale
Jonathan Dailey also got burned in sunny Cancun: He lost more than $30,000 in his dealings with Planet Hospital.
The Washington, D.C.-based trial lawyer couldn't sit back and do nothing about it. He decided to launch his own investigation, and was stunned to discover 40 other couples just like him— people left with a pile of bills and no babies.
"They came from Australia, from England, from Canada and of course the United States," Dailey told America Tonight. "All of them wrote to me stating, 'He stole' their money. It was, 'He took our money and stopped communicating with us.'"
The "he" they were talking about is Planet Hospital founder and CEO Rudy Rupak Acharya.
Acharya told America Tonight that he was the first person to bring an American to India for surrogacy in 2006, as well as the first to bring a foreign client for surrogacy in Mexico.
But Dailey remembers him differently.
"He was a master of diplomacy, of making you feel warm and fuzzy about Planet Hospital," Dailey said. "His fraud knew no international boundaries."
America Tonight exchanged numerous emails with the California businessman, trying to arrange an on-camera interview. In the end Acharya declined, citing scheduling conflicts, but he did send a statement by e-mail, telling America Tonight, in part:
"As proud as I am of my achievements, I am equally devastated and remorseful over the fact that so many people have lost money due to my business failures, but I did not purposely or willingly do this," he wrote. "There are some people who have had their hand out for a refund that do not deserve a refund, they had services rendered but no baby but I cannot be held accountable for that. GOING THOUGH SURROGACY DOESN’T MEAN YOU ARE GUARANTEED TO GET A BABY."
He went on to say the company's financial collapse was the result of escalating costs and a failed attempt to switch fertility clinic partners, after one "played fast and loose" with donors.
But Dailey, who said that in all his years as a trial lawyer he had "never seen that level of fraud," pressed for a federal investigation into the company and Acharya. According to him, it’s well underway.
"I contacted the F.B.I. in San Diego, the Consumer Fraud division," he explained. "I am able to say that I was served a grand jury subpoena and I responded to that subpoena with all the documentation that subpoena requested."
A spokesperson for the U.S. attorney’s office in San Diego would neither confirm nor deny the existence of a grand jury looking into Planet Hospital.
Winn-Lenetsky and Pommier both say they would be happy to see Acharya go to jail, but the effects of the scam still linger. After Planet Hospital collapsed, they switched clinics.
"We ended up with a U.S. egg donor [who] turned out to be homophobic and who basically left us in the lurch," Winn-Lenetsky said.
This time, the couple is hiring an American surrogate, and a watchful lawyer. Pommier said they learned a valuable lesson about surrogacy's new frontier.
"My advice to anyone considering Mexico right now is just wait," he said. "With the kind of money and emotional investment it takes, don’t be the first people."
Learning from mistakes
Not everyone burned by Planet Hospital is so willing to wait.
Jody Mowrey and Carmine Pecoraro said they lost close to $50,000 to the company while pursuing surrogacy in India. Now, they're trying their luck in Mexico.
Since getting married two years ago, starting a family has been a top priority for the Miami-based couple. In Cancun, they met four Mexican women dressed to the nines, vying to be their egg donors for the price of $2,500. They've also met two potential surrogates. The woman they pick would receive $13,000 to carry their baby to term.
To facilitate all of this, Mowrey and Pecoraro turned to Surrogacy Beyond Borders, a company that was launched in January by Geoff Moss and Lilly Frost. In a surprising twist, both Moss and Frost have close ties to Planet Hospital.
Frost, a former egg donor herself, is the founder of My Donor Cycle, a company that Planet Hospital used to service its clients with Western eggs. Moss told America Tonight that he was only an independent contractor with Planet Hospital, but on the company's website, he’s listed as "Vice President of Corporate Affairs and Business Development.”
"I think we can learn by the mistakes at Planet Hospital," he said.
Moss argues the new company is providing services that are transparent to clients every step of the way.
"They meet the surrogates, the egg donors," he explained. "We have staff available to answer the questions."
Among the potential surrogates Mowrey and Pecoraro have met through the company are Selena Ortiz and Cindy Torres. Both are single Mexican mothers who will spend nine months living in the well-appointed villa in a gated Cancun community.
Torres, 27, said she needs the money to pay off her student loans and help raise her 5-year-old daughter Camilla. "I’m in charge of raising her by myself and I am concerned about her future and education," she explained.
Mowrey and Pecoraro have had a chance to see the villa and meet some of the other potential surrogates. “It’s clean, organized," Pecoraro said. "The women seem to be very happy."
The accommodation features an airy patio, where intended parents can get to know the surrogates and decide who to bid on. Apart from no male visitors on the premises, no booze, no tobacco and no going out after dark, there is only one real obligation: be at the disposal of the intended parents for Skype calls.
Surrogacy Beyond Borders also took America Tonight inside one of its two clinics, where Dr. Maya Delagarza harvests the eggs from donors and then transfers fertilized embryos into willing surrogates.
The operation looks legitimate, but Daily is skeptical. He remembers Moss' old role at Planet Hospital.
"He was the one who solicited that wire from me at the time when he either knew or should have known that this operation was over," Daily said.
But Moss doesn't see it that way.
"I did solicit the money from him," Moss explained. "Rudy [Rupak Acharya] always made some, or has made some bad decisions along the way, but at the end of the day, he always prevailed, seemed to work things out. So even when I saw things get rocky, I gave him the benefit of the doubt."
He points out that unlike Planet Hospital, Surrogacy Beyond Borders puts the money in escrow accounts controlled by a third party. "We can't have access to any money," Moss said.
Neither do Mowrey and Pecoraro, who face the risk of losing it all over again if things don't work out.
The last time around, the couple took out loans for the $50,000 they needed to pay Planet Hospital. They're still paying them back today, but are determined to have their family, even if it means taking out new loans.