A San Diego surrogacy consultant pleads guilty to a $400,000 fraud scheme, leaving hopeful parents devastated and financially ruined.
At a Glance
- Lillian Markowitz, also known as Lilly Frost, admitted to defrauding clients of nearly $400,000
- Markowitz operated three surrogacy consulting businesses in San Diego
- She faces up to 20 years in prison and must pay at least $389,142 in restitution
- Nine clients were defrauded between January 2019 and May 2021
- The FBI is investigating and seeking potential additional victims
The Fraudulent Scheme
Lillian Markowitz, the former owner of three San Diego-based surrogacy consulting businesses, has pleaded guilty to orchestrating a fraudulent scheme that stole nearly $400,000 from hopeful parents. Markowitz, who also used the alias Lilly Frost, operated My Donor Cycle, Surrogacy Beyond Borders, and Expecting Surrogacy. From January 2019 to May 2021, she deceived nine clients by falsely promising that their funds would be secured in an escrow account.
Instead of safeguarding the funds as promised, Markowitz deposited client money into a business checking account, which she then used for personal and business expenses. She created a complex scheme to steal the money by submitting fraudulent requests to an escrow company holding her clients’ funds, even going so far as to forge client signatures.
The fraud perpetrated by Markowitz has left a trail of devastation for families hoping to become parents through surrogacy. One victim, Gabrielle Ackerman, experienced failed surrogacy attempts due to substandard medical care in Mexico, where Markowitz had promised low-cost surrogacy services.
“The path to parenthood through surrogacy can be fraught with emotional and financial challenges,” U.S. Attorney Tara McGrath said.
Ackerman’s last attempt resulted in a premature birth at 28 weeks, with the baby not surviving. Adding insult to injury, the ashes were never sent as promised. The emotional toll on families like the Ackermans is immeasurable, compounded by the financial losses they’ve suffered.
Legal Consequences and Investigation
Markowitz now faces severe legal consequences for her actions. The wire fraud charges carry a maximum penalty of 20 years in prison and a $250,000 fine. As part of her plea agreement, she has agreed to pay at least $389,142 in restitution to her former clients. Her sentencing is scheduled for April 11, 2025.
The FBI is actively investigating the case and encourages potential victims to come forward. There are concerns that the full extent of Markowitz’s fraudulent activities may not yet be known. Some clients fear their leftover embryos may have been secretly sold to other clients, adding another layer of distress to an already traumatic situation.
As the legal proceedings against Markowitz continue, many families are left grappling with the aftermath of her actions.
