Baltimore, Maryland – U.S. District Judge Ellen L. Hollander today sentenced Gregory Ray Blosser, age 39, of Tampa, Florida, to 32 months in federal prison, followed by three years of supervised release, for a wire fraud charge in connection with a scheme to defraud clients of The Surrogacy Group (TSG), which he owned and operated from offices in Annapolis, Maryland and Tampa, Florida. Judge Hollander also ordered that Blosser must forfeit $1,104,706 and pay restitution in the amount of $1,194,519.54. Blosser was arrested on April 29, 2019 in Florida and has been under home confinement since his arrest.
The sentence was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner and Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office.
“Gregory Blosser took advantage of and defrauded 44 individuals who were trying to become parents,” said Acting U.S. Attorney Jonathan F. Lenzner. “Blosser misappropriated funds from escrow accounts that belonged to families and were owed to surrogates carrying babies. This sentence should send a message to heartless criminals like Blosser who choose to line their pockets by taking advantage of people who are simply trying to start a family.”
“Dreams, hopes and bank accounts were wiped clean by Mr. Blosser who preyed on couples who were already in a vulnerable place,” said Jennifer C. Boone, Special Agent in Charge of the FBI Baltimore Field Office. “Today’s sentencing is a reminder that the FBI will use our resources appropriately to root out fraudulent surrogacy schemes that violate the trust of the American public.”
According to Blosser’s plea agreement, TSG was incorporated in Maryland on January 5, 2012 and offered and sold surrogacy-related services throughout the United States and internationally to individuals who desired to have children using a pregnancy surrogate. From at least 2015 until his arrest in 2019, Blosser solicited and accepted funds from TSG clients who desired to have children using a surrogate, representing that these funds would be held in escrow. Blosser told the clients that he would act as their agent disbursing the funds to the surrogate pursuant to contracts between the TSG client and TSG, and the TSG client and the surrogate.
Instead, Blosser admitted that beginning in 2017, he converted a significant portion of the funds he promised to hold in escrow to his own use without the authorization of the TSG client and failed to pay the surrogate as he had agreed to do. Blosser did not, as promised, create separate escrow accounts for these funds and as a result, those funds intermingled with TSG’s operating accounts and were used to pay business expenses, service business loans, and for other purposes not permitted under the escrow agreements. TSG clients were forced to pay the surrogate’s expenses themselves, effectively paying twice for the services Blosser had promised to deliver.
As detailed in his plea agreement, at Blosser’s direction, at least seven victims paid fees to establish an escrow account to be controlled by Blosser, with the funds to be used to find a suitable surrogate, and to support the surrogate during a pregnancy. The victims lived in Maryland, Australia, North Carolina, Germany, and Virginia. In each case, after the victims deposited funds into the escrow account, Blosser either did not locate a suitable surrogate, or did not pay the surrogate the agreed-upon fees.
In total, Blosser fraudulently obtained approximately $1,104,706 from approximately 44 victims.
Blosser is also facing related civil suits filed by the States of Maryland and Florida.
Acting United States Attorney Jonathan F. Lenzner commended the FBI for its work in the investigation. Mr. Lenzner thanked Assistant U.S. Attorney Leo J. Wise, who prosecuted the case.
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