Nearly 2 dozen families claim owner of Houston surrogacy escrow company stole millions to fund lavish lifestyle

(CNN) — Nearly two dozen families are listed in a lawsuit accusing the owner of a Houston-based surrogacy escrow company of stealing millions of dollars from their accounts, intended to pay their surrogates and cover medical expenses, to fund her lavish lifestyle.

The lawsuit claims that Surrogacy Escrow Account Management LLC, or SEAM, and its owner, Dominique Side, systemically misappropriated millions of escrow dollars, allegedly using the funds to enrich herself and fund side businesses – including a clothing line and a career as a rap and R&B singer and producer.

The escrow funds also paid for Side’s “lavish trips all over the world,” designer clothing, luxury vehicles, real estate, and membership at the “Soho House,” a chain of private clubs, the filing alleges.

The lawsuit was initially filed by one family last month, but 22 additional families across the country – as well as prospective parents in France and Italy – asked to join the lawsuit, the plaintiffs’ attorney announced Tuesday, claiming there are “hundreds more families” that have been victimized by SEAM’s conduct. 

The lawsuit alleges that Side and the other defendants “have lured families and their surrogates into entering into a fiduciary relationship with SEAM so they could steal their escrow funds” for their benefit.

SEAM provides surrogacy escrow account management services to couples and women who have agreed to act as their surrogates. The company has an obligation as the intended parents’ escrow agent to hold escrow funds, review the expenses incurred by their surrogates and distribute payments to the surrogate, the lawsuit states.

During a court hearing on Wednesday, a judge issued a temporary injunction, ordering funds and assets of the defendants be frozen for the duration of the lawsuit. A trial in the case has been scheduled to begin in January 2025, according to the judge’s order.

Last month, the FBI said in a news release it was “seeking to identify potential victims” of SEAM and asked any other potential victims to fill out an online form.

The lawsuit, filed in June in the district court of Harris County in Texas, names Side as a defendant, along with one of her business partners, Anthony Hall and Life Escrow, LLC, an escrow company created by Hall.

The judge’s order says in March, Hall formed a new escrow company called Life Escrow, LLC, which is located at the same business address as SEAM.

Dominique and SEAM “may have transferred any escrow funds remaining in SEAM’s accounts” as of June 14 to bank accounts in the name of Life Escrow, according to the judge’s order.

CNN has reached out to Hall for comment on the lawsuit and did not receive a response. But in a statement posted on his Facebook page, Hall said he defended himself from the accusations in court and has agreed “to turn over specific assets I control that can be traced to the alleged mismanagement by Ms. Side.

“I also presented a sworn affidavit from Ms. Side that’s states I have no insight or access to any of the funds or, processes of SEAM. Also it states that no monies have been transferred to me fraudulently,” Hall said.

Hall added that Life Escrow was a passion project he started in 2023 that “has no financial accounts, or clients,” and was “not a front for illegal activity.”

In an automatic reply to an email sent by CNN, Side said she and her company “have been notified” that we are subject to an active investigation by federal authorities.”

“Under advice of counsel, I am not permitted to respond to any inquiries regarding the investigation,” her reply continued.

In a statement on behalf of the families, attorney Marianne Robak said: “This is an important step for our legal team as we fight to help those affected by this scheme receive the recovery and answers they deserve.”

“We will continue to investigate where the money went and the best course of action to hold the defendants accountable for their deceitful actions,” the statement continued.

Defendants’ actions ‘nothing short of evil,’ lawsuit says

The lawsuit describes the defendants’ actions as “nothing short of evil,” and says more than 800 families who belong to a private Facebook group for victims of the alleged scheme have been defrauded by SEAM and its owner for over $16 million.

Mindy and Aaron Herstein who are not part of the lawsuit but who are members of the Facebook group told CNN they are down $50,000 after using SEAM’s escrow services to pay a surrogate who is now 24 weeks pregnant. They say after a devastating stillbirth and health problems, they chose surrogacy as it was still their dream to have a child.

“We are heartbroken and devastated about losing the money that was supposed to be safely managed in a trusted escrow account for our surrogate as that is how she was paid. Now we are down 50K, and I do not see this money ever being returned. I feel for everyone going through this at this time,” Mindy told CNN.

The families each deposited between $31,000 and $100,000 into a SEAM escrow account, only some of which was used to pay surrogates, the lawsuit said.

“Troubles with SEAM came to light in June when expectant parents who had each deposited tens of thousands of dollars to pay women carrying their children learned instead that their money was apparently lost,” the plaintiffs’ attorney said in a Tuesday news release. “Initially, it looked as though millions had vanished.”

The families were notified by SEAM on June 4 their accounts had been put “on hold” by Capital One Bank due to “fraudulent charges,” the judge’s order states.

Ten days later, Side informed all of the company’s clients in an email: “Due to legal action all operations have been placed on hold. At this time, I am unable to provide further details regarding the matter,” according to the order.

The judge cited evidence that shows SEAM’s escrow accounts do not have enough funds to pay the families’ escrow fees, and the 23 families incurred damages ranging from roughly $12,400 to $90,400 – totaling over $1 million, not including attorney fees.

“The evidence shows that it is likely – and probable – that SEAM misappropriated millions of its clients’ escrow funds,” the judge wrote.

The judge determined the intended parents have a probable right to recovering their claims because it appears likely the defendants transferred SEAM’s assets “in order to hinder, delay or defraud SEAM’s creditors.”

The families’ forensic accountant reviewed bank records that show SEAM transferred the escrow funds into an operating account, most of which was then transferred to other bank accounts, the order says.

Bank records show Side transferred more than $2.2 million to launch her career as “Dom,” a “racy rap and R&B singer and music producer,” according to the filing. She allegedly used some of the funds to create music videos and social media content.

The records also show SEAM transferred nearly $5 million to pay for a credit card that “appears to be related” to a music studio that was owned by Side and Hall, along with $275,000 to Side’s clothing line.

In October 2023, a designer clothing company named Nikki Green, LLC – partially owned by Side and Hall – showcased its clothing line at Fashion Week in Las Vegas, which was funded with the parents’ escrow funds, the lawsuit says.

The lawsuit alleges the defendants committed fraud by failing to disclose the whereabouts and the status of their client’s funds, as part of a larger scheme to defraud the families of their escrow funds.

“Records reveal that SEAM, Dominique and their other Defendants have been methodically transferring the Intended Parents’ escrow funds out of SEAM’s bank accounts for their personal use, for years,” according to the suit. “As a result, hundreds of families are unable to financially assist their surrogates or ensure the safe delivery of their babies.”

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