A Surrogacy Agency That Delivered Heartache

By tamar Lewin – The New York Times, July 27, 2014

CANCÚN, Mexico — Rudy Rupak, the founder ofPlanet Hospital, a medical tourism company based in California, was never shy about self-promotion. Over the last decade he has held forth about how his company has helped Americans head overseas for affordable tummy tucks and hip replacements. And after he expanded his business to include surrogacy in India for Western couples grappling with infertility — and then in Thailand, and last year, Mexico — he increasingly took credit for the global spread of surrogacy.

But now Mr. Rupak is in involuntary bankruptcy proceedings, under investigation by the F.B.I. and being pursued by dozens of furious clients from around the world who accuse him of taking their money and dashing their dreams of starting a family.

Where it is permitted, as in parts of Mexico, businesses like Mr. Rupak’s — many reputable, some not — have flourished by serving as intermediaries connecting clients with egg donors, in vitro fertilization clinics and surrogates. Those able to pay more than $100,000 for services often turn to an American agency in a state where surrogacy is legal and fairly widely practiced. Those with less money often go to India or to Mexico through agencies like Planet Hospital that advertise heavily and charge less than half the American price.

Jonathan C. Dailey, a lawyer in Washington, wired Planet Hospital $37,000 in December 2013, the first installment on a contract for a single mother in Mexico to carry his child. He and his fiancée flew to Cancún to leave a sperm deposit at the clinic that would create the embryo and to visit the downtown house where their surrogate would live while pregnant. They picked a “premium” egg donor from the agency Planet Hospital sent them to. But nothing happened.

“It was just outright fraud,” said Mr. Dailey. “It’s like we paid money to buy a condo, they took the money, and there was no condo. But it’s worse, because it’s about having a baby.”

The emerging Planet Hospital story, which Mr. Rupak characterized as one of mismanagement rather than fraud, stands as a cautionary tale about the proliferation of unregulated surrogacy agencies, their lack of accountability and their ability to prey on vulnerable clients who want a baby so badly that they do not notice all the red flags.

Catherine Moscarello, who worked with Mr. Rupak and handled communications with clients, said the company was engaged in unsavory practices “from the moment I stepped aboard.”

“The object was to get money,” she added. “He would keep changing clinics, and whenever his relationship with a clinic in India or Thailand or Cancún broke off, he would disparage the clinic and the doctors there. But what was really happening was that he wasn’t paying his bills.”

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