United States Attorney Benjamin B. Wagner
Eastern District of California
Modesto Surrogate Parenting Agency Owner Sentenced to Over Five Years in Prison in $2.4 Million Fraud Scheme
|FOR IMMEDIATE RELEASE||
Monday, May 13, 2013
Docket #: 1:12-cr-00110-AWI-BAM
FRESNO, Calif. — Tonya Ann Collins, 37, formerly of Modesto, was sentenced today by Senior United States District Judge Anthony W. Ishii to five years and three months in prison for a fraud scheme she carried out through her agency, Surrogenesis USA Inc., and a related escrow company, United States Attorney Benjamin B. Wagner announced.
Collins was ordered to pay restitution to the victims and to pay a forfeiture judgment to the United States. She was ordered to begin serving her sentence on June 27, 2013. A hearing is scheduled for July 29, 2013, to determine the restitution amounts due to each victim and the total amount subject to the forfeiture order.
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 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 steered Surrogenesis clients to Michael Charles, but concealed her ownership and operation of the escrow company. She created fictitious employee identities to make it appear that Michael Charles was an independent company with its own staff.
Court documents show that Collins used the Surrogenesis and Michael Charles accounts for unauthorized personal purchases, including 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. As a result, Surrogenesis and Michael Charles 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. Surrogenesis and Michael Charles clients, surrogates, and other businesses suffered losses of more than $2.4 million.
“Tonya Collins orchestrated a cruel fraud, the effects of which are still being felt by the victims,” U.S. Attorney Wagner said. “She not only stole victims’ funds from their escrow accounts, but in many cases caused other injuries to victims, permanently foreclosing certain victims’ ability to proceed with a surrogate pregnancy for which they had planned for many years. When greed leads individuals to break the law, we will do everything in our power to investigate, prosecute and punish those responsible.”
“No family should endure the heartbreak caused by this fraud scheme. Collins’ clients were victimized at a time when they were most vulnerable, entrusting her with both their finances and their families’ future,” said Manuel Alvarez Jr., Acting Special Agent in Charge of the Sacramento Division of the Federal Bureau of Investigation.
This case was the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Kirk E. Sherriff prosecuted the case.