Surrogacy scammer pleads guilty to defrauding families, faces up to 20 years in prison

A woman who stole hundreds of thousands of dollars from clients to whom she promised surrogacy services to has pled guilty to fraud.

Last year, Lillian Markowitz (also known as Lilly Frost) was accused of stealing money from clients through three surrogacy agencies, all of which she owned. Markowitz told clients she could keep their costs low by outsourcing surrogates from Mexico; she also promised them that they would become parents, no matter how many IVF attempts it took or how many miscarriages were experienced.

“She had brilliantly hidden everything beneath the surface,” one client, Gabrielle Ackerman, said. “We had no idea we were stepping into the most horrific chapter of our lives.”

Ackerman and her husband created multiple embryos, but their surrogacy attempts repeatedly failed, allegedly due to substandard medical care in Mexico. Their last attempt ended with a baby born prematurely at 28 weeks, with the doctor in Mexico admitting the baby could have survived if born in the United States. Markowitz promised to send the Ackerman the ashes of their baby, but the remains never came; at that point, the Ackermans gave up. Now, they live in fear of what may have happened to their leftover embryos. They worry that Markowitz may have secretly sold them to other clients.

“I’m holding onto hope that our other embryos weren’t sold,” Ackerman said. “I worry someone is going to call me one day after a DNA search and say, ‘I’m yours.’”

READ: Former surrogate: ‘I would never encourage another woman to do it’

Other clients gave Markowitz money to be placed into an escrow account, meant to be used for medical expenses. However, the money often went missing, and Markowitz rarely had an explanation. The surrogates she did hire were paid just $14,000 — less than the average annual salary in Mexico. Other women, largely poor and desperate for money, were impregnated and then never paid, even as their health deteriorated and medical bills racked up.

“I’m putting my life at risk,” one surrogate wrote in Spanish.

Kristen Armstrong, a lawyer who often represented the would-be parents, wrote in another e-mail, “Lilly, This is VERY ALARMING. Why is she not being paid? Why has she not received medical attention in the US? What is going on?!”

Markowitz disappeared before eventually being found by the FBI in Portland, Oregon; after suffering a drug overdose, she left the hospital and tried to flee to a nearby bus stop. Her escape attempt was quickly thwarted, and once she was recovered, she was taken to jail.

Now, a Department of Justice press release has confirmed that Markowitz has pled guilty to the charges against her. She will be sentenced in April, but has already agreed to pay nearly $400,000 in restitution to her victims. She faces up to 20 years in prison.

“Instead of aiding her hopeful clients on their path to parenthood, the defendant took advantage of their vulnerability, betrayed their trust, and stole their money,” FBI San Diego Special Agent in Charge Stacey Moy said. “FBI will continue to investigate these unique fraud schemes to protect the public against those who employ empty promises and prey upon vulnerable individuals.”