CNN
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Ariel Mitten’s world changed when she found out that $50,000 she borrowed for a surrogacy project had disappeared from an escrow account.
“That was the hardest day for me,” she told CNN over video chat. “I couldn’t eat, I couldn’t sleep.”
Her surrogate was 12 weeks pregnant, and the emotionally distraught woman remembers reporting the suspected fraud to at least 10 federal and state law enforcement agencies and calling her bank to ask for the loan to be forgiven. But, she said, the answer was the same: No one could help her.
“I just felt alone. I felt abandoned,” she said.
The lawsuit alleges that Surrogacy Escrow Account Management LLC (SEAM) and its owner, Dominic Syed, systematically misappropriated millions of dollars in funds placed in escrow accounts and used the funds to enrich himself and support side businesses, including a clothing line and a career as a rap and R&B singer and producer.
Mitten is one of about 20 families facing charges against the owner of a Houston-based surrogacy escrow company for allegedly stealing millions of dollars from accounts meant to pay surrogates and cover medical expenses, and using it to fund a lavish lifestyle.
The escrow funds also paid for Syed’s “luxury trips around the world,” designer clothes, luxury cars, real estate and memberships to the Soho House private club chain, according to the filing.
The lawsuit was originally filed last month by one family, but 22 more families from around the country, as well as prospective parents in France and Italy, have come forward to join the suit, plaintiffs’ lawyers said Tuesday, arguing that “hundreds more families” have been harmed by SEAM’s actions.
The lawsuit alleges that Syed and other defendants “lured family members and surrogate mothers into trust relationships with SEAM and then stole escrow funds” for their own profits.
SEAM provides surrogacy escrow account management services to couples and women who agree to become surrogate mothers. As the escrow agent for the intended parents, the company is required to hold the escrow funds, review expenses incurred by surrogate mothers, and distribute payments to surrogate mothers, according to the lawsuit.
During a court hearing on Wednesday, the judge issued a preliminary injunction freezing the defendants’ funds and assets for the duration of the litigation. The case is scheduled to go to trial in January 2025, according to the judge’s order.
Last month, the FBI said in a news release that it was “attempting to identify potential victims” of SEAM and asked other potential victims to fill out an online form.
The lawsuit, filed in June in District Court in Harris County, Texas, names as defendants Syed, one of her business partners, Anthony Hall, and an escrow company he set up, Life Escrow LLC.
According to the judge’s order, Hall created a new escrow company in March called Life Escrow, LLC, which is located at the same business address as SEAM.
According to the judge’s order, as of June 14, Dominique and SEAM “may have transferred remaining escrow funds in SEAM’s accounts to bank accounts in the name of Life Escrow.”
CNN reached out to Hall for comment on the lawsuit but he did not respond, but in a statement posted to his Facebook page, Hall said he would defend himself in court against the charges and “agreed to turn over certain assets under my control that are allegedly mismanaged by Mr. Syed.”
“I have also provided an affidavit from Mr Syed stating that I had no knowledge or access to SEAM’s funds or processes and that no money was ever fraudulently transferred to me,” Hall said.
Hall added that Life Escrow is a passion project he started in 2023, has “no financial accounts or clients” and is “not a front for illegal activity.”
In an automated response to an email sent to CNN, Syed said she and her company had been “notified that we are the subject of an investigation by federal authorities.”
“On the advice of my attorney, I am not permitted to answer any questions regarding the investigation,” she continued in her response.
“This marks an important step for our legal team as we fight to help those harmed by this scheme get the compensation and answers they deserve,” attorney Marianne Robach, representing the families, said in a statement.
“We continue to investigate where the funds were spent and the best steps to take to hold defendants accountable for their fraudulent activities,” the statement continued.
The lawsuit describes the defendants’ actions as “nothing less than evil” and alleges that more than 800 families who belong to a private Facebook group for victims of the scam were defrauded out of more than $16 million by SEAM and its owners.
Mindy and Aaron Hurstein, who are not involved in the lawsuit but are members of the Facebook group, told CNN they lost $50,000 after using SEAM’s escrow service to pay a surrogate who is now 24 weeks pregnant. They say they chose surrogacy because having a child was still a dream for them after a devastating stillbirth and health issues.
“We are heartbroken and devastated by the loss of money that was supposed to be safely held in a trusted escrow account where our surrogate was paid. Now we have lost $50,000 that we will never get back. Our hearts go out to everyone going through this situation right now,” Mindy told CNN.
According to the lawsuit, the families each put between $31,000 and $100,000 into SEAM’s escrow accounts, but only a portion of that money was used to pay the surrogates.
“SEAM’s troubles became apparent in June when it was discovered that expectant parents had each deposited tens of thousands of dollars with the women who would be delivering their babies, only for the money to go missing,” lawyers for the plaintiffs said in a news release Tuesday. “It initially appeared that millions of dollars had disappeared.”
According to the judge’s order, SEAM notified the family on June 4 that Capital One Bank had placed a “hold” on the account due to “fraudulent charges.”
Ten days later, Syed emailed all of the company’s clients, informing them, “Pursuant to legal action, all operations have been suspended. We are unable to provide any further details on this matter at this time,” according to the order.
Ariel Mitten says she and her husband, Andrew, have three children and turned to surrogacy to complete their family after struggling with infertility for three years.
The couple contacted the surrogate mother in November 2023 and opened an escrow account with SEAM in March, depositing $50,000. A month later, the embryo was successfully transferred into the surrogate mother, and the pregnancy was confirmed in May.
“I was overjoyed. I was so happy,” Ariel told CNN.
But her joy quickly turned to deep anxiety when her monthly payments from SEAM stopped in June.
Since then, Ariel says she has started working overtime at work, discussed alternative payment plans with her surrogate, and even set up a GoFundMe page, but it has only raised $5,000 of her $38,000 goal.
The judge cited evidence showing that SEAM’s escrow account did not have enough funds to pay the families’ escrow fees, causing losses to the 23 families ranging from approximately $12,400 to $90,400 — totaling more than $1 million, excluding attorneys’ fees.
“The evidence indicates that SEAM likely misappropriated millions of dollars in client escrow funds,” the judge wrote.
The judge found that the Intended Parents were entitled to recover their claims because the defendants likely transferred SEAM’s assets “with the intent to hinder, delay or defraud SEAM’s creditors.”
According to the order, the family’s forensic accountant reviewed bank records and found that SEAM had transferred escrow funds to an operating account, most of which was then transferred to other bank accounts.
According to the filing, bank records show Syed transferred more than $2.2 million to “Dom” to launch a career as “an extreme rap and R&B singer and music producer.” She allegedly used some of the funds to create music videos and social media content.
The records also show SEAM sent about $5 million in credit card payments “supposedly related to” a music studio owned by Side & Hall, as well as $275,000 to Side’s clothing line.
According to the complaint, in October 2023, Nikki Greene LLC, a designer clothing company partly owned by Syed and Hall, showed a clothing line funded with her parents’ escrow funds at Las Vegas Fashion Week.
The lawsuit alleges that the defendants committed fraud by failing to disclose the location and status of client funds as part of a larger scheme to defraud families of escrow funds.
Ariel said her heart aches for all the families who are part of the survivors’ Facebook group, especially one family who may never have a baby after two failed embryo transfers.
“All the stories are horrible but that one really hit me hard. I feel lucky to have a surrogate who is pregnant,” said Ariel, who said she wants to take a break from it all but can’t stop thinking about the company owner who allegedly stole her money.
“If she’s listening, I just want to ask her: ‘How can you sleep at night doing this to people who have already experienced so much pain in their lives?'” Ariel said.
But Ariel said the one thing Syed can’t take away is the “joy” of being a mother to a new baby girl who will one day get to call herself mom.
