United States Attorney Benjamin B. Wagner
Eastern District of California
Modesto Surrogate Parenting Agency Owner Pleads Guilty in $2 Million Fraud Scheme
|FOR IMMEDIATE RELEASE||
Tuesday, February 19, 2013
Docket #: 1:12-cr-00110-AWI-DLB
FRESNO, Calif. —Tonya Ann Collins, 37, formerly of Modesto, pleaded guilty today to four counts of wire fraud in connection with a scheme she carried out through her agency, Surrogenesis USA Inc. and a related escrow company, United States Attorney Benjamin B. Wagner announced.
According to court documents, from approximately November 2006 through March 2009, Collins, as owner of Surrogenesis and the Michael Charles Independent Financial Holding Group, carried out a scheme to defraud prospective parents, surrogates, and other businesses. Surrogenesis was a surrogate and egg donation agency that marketed itself as assisting individuals in having children through third-party assisted reproduction. Michael Charles Independent Financial purported to be an independent personal property escrow company that would hold clients’ funds in trust and pay out those funds upon the clients’ authorization for legitimate expenses associated with the surrogacy process, such as surrogacy fees and medical costs. Collins admitted in her plea agreement that she steered Surrogenesis clients to Michael Charles Independent Financial but concealed her ownership and operation of the escrow company, including creating fictitious employee identities to make it appear that Michael Charles was an independent company with its own staff.
According to the plea agreement, Collins used the Surrogenesis and Michael Charles accounts for unauthorized personal purchases: automobiles, homes, jewelry, clothing, and vacations for herself and others, without the clients’ knowledge or consent. Collins used client trust funds in the Michael Charles accounts to directly pay for her personal purchases and also transferred client funds from the Michael Charles accounts to other bank accounts that she controlled before spending the funds. As a result of Collins’ conduct, Surrogenesis and Michael Charles Independent Financial suffered substantial cash flow problems and various surrogate mother fees and related surrogacy expenses were not paid by the companies as required. Collins nonetheless continued to solicit new surrogate parent clients and funds. As a result, Surrogenesis and Michael Charles clients, surrogates, and other businesses suffered losses of more than $2 million.
U.S. Attorney Wagner said: “Tanya Collins cruelly took advantage of clients who sought nothing more than to bring children into the world. Her greed left a trail of devastation, both financial and emotional, in its wake.”
“Clients of Surrogenesis and Michael Charles Independent Financial confidently entrusted large sums of money in trust, believing that the expenses related to expanding their family would be paid,” said Herbert M. Brown, Director in Charge of the Sacramento Division of the Federal Bureau of Investigation. “Unfortunately, Tonya Collins’ greed has forever tarnished what should be happy memories of the arrival of children and the financial well being of her victims.”
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Kirk E. Sherriff is prosecuting the case.
Collins is scheduled to be sentenced by U.S. District Judge Anthony W. Ishii on May 13, 2013. Collins faces a maximum statutory penalty of: 20 years in prison and a $250,000 fine for each count. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.