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Justice News

Department of Justice
U.S. Attorney’s Office
Southern District of California

FOR IMMEDIATE RELEASE
Monday, August 7, 2017

International Surrogacy Clients Defrauded in Racketeering Scheme

Assistant U. S. Attorney Christopher P. Tenorio (619) 546-8413

 

NEWS RELEASE SUMMARY – August 7, 2017

 

SAN DIEGO – Acharyya Rupak, also known as Rudy Rupak, was sentenced today before U.S. District Court Judge Cynthia A. Bashant, and ordered to serve 24 months in custody for crimes relating to his international surrogacy company, Planet Hospital. Judge Bashant also ordered Rupak to pay a $10,000 fine, and scheduled a restitution hearing on September 13, 2017, to determine how much Rupak must pay back to his victims.

 

Rupak was the founder and operator of Planet Hospital (“PH”), beginning in approximately 2003. PH has had business addresses in San Diego, Calexico, and Calabasas, California. PH facilitated medical tourism services, which are the visit of foreign patients to hospitals across international borders in order to receive medical treatment, including organ transplants and cosmetic surgery. In approximately 2006, PH began offering international surrogacy services, which is a surrogacy agreement involving an overseas country, and generally involves the carrying of a pregnancy by a surrogate for intended parents.

 

Beginning in approximately September 2012, and continuing through at least January 2014, Rupak made interstate wire transfers, with the intent to facilitate commercial bribery, in violation of California law. In furtherance of the commercial bribery, Rupak solicited, and instructed PH employees to solicit, medical tourism and international surrogacy clients by falsely representing that their funds would be “set aside,” or put in escrow accounts, and used only to pay for medical services provided to the respective client. In some instances, however, Rupak caused funds obtained from new PH clients to be used to pay for services provided to existing PH clients.

 

In particular, in December 2013, Rupak directed a PH employee to solicit funds from PH clients by fraudulently representing that the clients’ funds would be maintained in an escrow account. The clients were also told their funds would be sent to My Donor Cycle, a San Diego-based business for surrogacy egg donation services. Rupak instructed the PH employee to make the representation to the clients, however, without the knowledge or consent of My Donor Cycle. On December 5, 2013, the PH clients wire-transferred $24,000 to a bank account controlled by Rupak. Rupak, however, did not place the funds into escrow. Instead, Rupak comingled some of their funds with funds received from another PH client. He then wire-transferred the combined funds to My Donor Cycle to pay for services already provided to prior PH clients.

 

Rupak also initially undercharged PH clients for the cost of medical tourism and international surrogacy services in order to induce them to begin services through PH without knowing that additional payments would be required. Rupak, however, often failed to forward PH clients’ funds to service providers. The service providers included the Fertility Clinic Cancun (“FCC”) and the IREGA Clinic (“IREGA”), which were clinics that provided surrogacy services in Cancun, Mexico. Rupak’s failure to forward client funds to FCC and IREGA caused the service providers to demand additional funds from the PH clients in order to initiate or continue international surrogacy services.

 

Rupak made several excuses to PH clients for its failure to provide successful surrogacy services. He created a fraudulent website and email address through which he sent unauthorized emails in the name of a clinic and its physician to PH clients in order give false excuses why PH had not provided promised services. Rupak also instructed PH employees to make misrepresentations to PH clients regarding prior medical tourism and international surrogacy successes, and that unsuccessful surrogacy procedures were the fault of foreign service-providers, restriction from foreign laws, or failed bank transactions.

 

Apart from his work on behalf of PH, in order to obtain employment unrelated to medical tourism or international surrogacy, Rupak identified himself with an alias to potential employers in order to conceal his true identity and pending fraud allegations.

 

Rupak acknowledged that he caused total losses of at least $247,620, although the total losses will be determined at the restitution hearing.

 

In imposing custody, Judge Bashant noted that Rupak lied to vulnerable victims who were sick, and who were desperate for children.

 

Acting U.S. Attorney Robinson said, “The defendant betrayed the trust placed in him by people desperate to have a child. By preying on their vulnerable emotions, he was able to extract more money on the false promise that he was doing everything possible to help them obtain a baby. To use the dream of parenthood as leverage for obtaining fraudulent proceeds is intolerable and heartbreaking.”

 

“Today's sentencing is justice overdue for the many victims affected by this defendant’s deceitful practices,” stated FBI Special Agent in Charge Eric S. Birnbaum. “Acharyya Rupak can no longer prey upon those desperate to have a family.”

 

DEFENDANT

 

Acharyya “Rudy” Rupak Age: 49

 

SUMMARY OF CHARGE Case Number: 16CR1896

 

Title 18, United States Code, Section 1952(a)(3)(interstate or foreign travel in aid of racketeering enterprise)

Maximum penalty: 5 years of custody; $250,000 Fine

 

AGENCY

 

Federal Bureau of Investigation

Topic(s): 
Financial Fraud
Press Release Number: 
CAS17-0807-Rupack
Updated August 7, 2017