Surrogacy Scandal Exposed: Who Is Lillian Markowitz?

Doctor uses stethoscope on pregnant woman's belly.

Fraudulent surrogacy schemes don’t just harm financially—they devastate hopes and dreams, as unraveled in the case of Lillian Markowitz.

Key Takeaways

Lillian Markowitz orchestrated a $400,000 surrogacy fraud under the alias Lilly Frost.
Victims were misled into believing their funds were secure in escrow accounts.
Markowitz now faces up to 20 years in prison and is ordered to pay restitution.
The surrogacy industry is called to implement enhanced safeguards.
Markowitz’s fraudulent activities commenced around 2018 amid financial distress.

Surrogacy Fraud Unfolds

Lillian Markowitz, using the alias Lilly Frost, pleaded guilty to defrauding clients through her surrogacy consulting businesses, a fraud scheme amassing nearly $400,000. She operated under businesses such as My Donor Cycle and Surrogacy Beyond Borders, luring families with affordable surrogacy options in Mexico. This elaborate scheme involved submitting fraudulent requests to an escrow company, even forging client signatures to procure funds.

Between January 2019 and May 2021, nine clients were misled into believing their funds were to be held securely. Instead, monies intended for surrogacy proceedings were funneled into a business checking account for personal and business expenses, leaving hopeful parents financially and emotionally strapped.

The Devastating Impact

Victims like Gabrielle Ackerman experienced more than financial loss; they underwent emotional turmoil as their surrogacy attempts failed due to inadequate medical care. In some heartbreaking instances, babies were born prematurely and did not survive. The ashes of these babies were promised but never delivered, and fears arose about the secret sale of leftover embryos.

“She had brilliantly hidden everything beneath the surface,” said Ackerman.

FBI Special Agent Stacey Moy condemned this exploitative behavior, highlighting the betrayal of trust for financial gain. The aspiring parents’ funds, promised for securing surrogates and medical expenses, were mismanaged drastically, with escrow accounts showing missing amounts.

Legal Proceedings and Future Safeguards

Markowitz has been ordered to pay at least $389,142 in restitution, facing charges under wire fraud violations with potential imprisonment up to 20 years. U.S. Attorney Tara McGrath emphasized the emotional and financial hardships inflicted on her clients, underscoring the trust they’ve lost. Surrogates themselves suffered, frequently unpaid, all while their medical bills soared.

“The path to parenthood through surrogacy can be fraught with emotional and financial challenges,” said McGrath.

This case urges the surrogacy industry to establish stronger safeguards. Potential victims are encouraged to contact authorities, like the FBI’s San Diego office, to halt similar frauds. Prosecuted by U.S. Attorneys Jeffrey D. Hill and Mark W. Pletcher, the legal proceedings continue with a scheduled sentencing on April 11, 2025.