Calls For Reform After A Shocking $400K Surrogacy Scam Discovered

Doctor uses stethoscope on pregnant woman's belly.

Lillian Markowitz faces 20 years in prison for a $400,000 surrogacy scam that shattered dreams and exploited vulnerable clients.

Key Insights

Lillian Markowitz, aka Lilly Frost, pleaded guilty to defrauding clients of nearly $400,000 through her surrogacy consulting businesses.
She created fraudulent requests to an escrow company, forged client signatures, and misused funds for personal expenses.
Markowitz faces up to 20 years in prison and must pay at least $389,142 in restitution to her victims.
The case highlights the urgent need for stricter oversight in the surrogacy industry to protect hopeful parents.
Victims experienced failed surrogacy attempts, financial losses, and emotional trauma due to Markowitz’s fraudulent practices.

A Web of Deception Unravels

Lillian Markowitz, also known as Lilly Frost, has admitted to orchestrating a complex fraud scheme that preyed on individuals desperate to start or expand their families. Operating through her San Diego-based businesses—My Donor Cycle, Surrogacy Beyond Borders, and Expecting Surrogacy—Markowitz stole nearly $400,000 from nine clients between January 2019 and May 2021.

The fraudster’s modus operandi involved making false promises to clients that their funds would be securely held in escrow accounts. Instead, Markowitz diverted these funds into a business checking account, using the money for personal and business expenses. To facilitate her scheme, she submitted fraudulent requests to the escrow company complete with forged client signatures.

The Human Cost of Fraud

The impact of Markowitz’s actions extends far beyond financial losses. Clients like Gabrielle Ackerman experienced heartbreaking setbacks and emotional trauma. Ackerman endured failed surrogacy attempts due to substandard medical care in Mexico, where Markowitz had promised affordable surrogacy options.

“She had brilliantly hidden everything beneath the surface,” said Ackerman.

In a tragic turn of events, Ackerman’s final surrogacy attempt resulted in a premature birth at 28 weeks, with the baby not surviving. Adding insult to injury, the promised ashes were never sent. The ordeal has left victims like Ackerman grappling with uncertainty about the fate of their remaining embryos.

Justice and Accountability

The legal system has now caught up with Markowitz. She faces wire fraud charges that carry a maximum penalty of 20 years in prison and a $250,000 fine. As part of her plea agreement, Markowitz has committed to paying at least $389,142 in restitution to her former clients. Her sentencing is scheduled for April 11, 2025.

“The path to parenthood through surrogacy can be fraught with emotional and financial challenges,” stated the U.S. Attorney Tara McGrath.

FBI San Diego Special Agent in Charge Stacey Moy echoed this sentiment, condemning Markowitz’s exploitation of vulnerable clients. The FBI is actively investigating the case and encourages potential victims to come forward and contact their San Diego Field Office.

A Call for Industry Oversight

The Markowitz case underscores the pressing need for stricter regulations and oversight in the surrogacy industry. The emotional and financial stakes for hopeful parents are exceptionally high, making them particularly vulnerable to unscrupulous operators.

“Instead of aiding her hopeful clients on their path to parenthood, the defendant took advantage of their vulnerability, betrayed their trust, and stole their money,” FBI San Diego Special Agent in Charge Stacey Moy stated.

As the surrogacy industry continues to grow, it is crucial for lawmakers and regulatory bodies to implement robust safeguards. These measures should aim to protect prospective parents, surrogates, and the children born through these arrangements. The Markowitz case serves as a stark reminder of the potential for abuse in an industry built on hope and trust.