Lawsuit filed against surrogacy escrow fund, court froze assets
HOUSTON - In an update to the story we reported on FOX 26, a lawsuit has been filed against Surrogacy Escrow Account Management (SEAM) and its owner, Dominique Side, after multiple families claimed money is missing from their surrogacy escrow accounts.
According to Shackelford, McKinley & Norton, LLP, attorneys at the law firm have taken legal action against the company for surrogate mothers following an alarming incident where a surrogate mother discovered her account, containing over $60,000, had been completely drained.
FIRST STORY: Families allege missing funds in Houston surrogacy escrow account scandal
A Harris County judge has since issued a temporary restraining order, freezing the assets of the escrow agency and any bank accounts belonging to Side and her business partner, Anthony Hall, which may hold escrow funds. The restraining order also halts the operations of a new entity recently formed by Hall.
"Many of these families have struggled with infertility for years and this is yet another blow to their finances and emotional well-being," said Shackelford partner Marianne Robak, who filed the lawsuit.
Parents intending to use surrogacy services placed significant sums into SEAM's escrow, which Side owns, to manage expenses relating to their surrogates. Managing attorney Andrew Bluebond suspects that the funds were pooled into a single account rather than keeping the money in individual accounts.
RELATED: Houston families demand answers over missing surrogacy funds
Concerns were further highlighted when it was found that the management's method for tracking funds was seemingly via a Google Docs spreadsheet, without a tangible connection to bank accounts.
According to the complaint, many couples, including Robak’s client and her husband, entrusted SEAM with thousands of dollars intended for their surrogate's medical expenses and fees. SEAM's role was to safeguard these funds, review the surrogate’s expenses, and disburse the money according to the surrogacy agreement.
The press release states SEAM notified parents earlier this month it was experiencing "significant issues" with its bank, leading to a hold on all SEAM accounts and a transition to new accounts. Despite these assurances, two accounts that should have contained Robak's clients' funds were found to be empty.
The situation has also been stressful for Kelly and Daniel Palladino. After going through two miscarriages due to Kelly's Lupus autoimmune disease, surrogacy was their only option, and they currently have more than $60,000 in their escrow account with SEAM.
Further complicating matters, the lawsuit reveals that public records indicate Side may have pledged a portion of the escrow funds to two different lenders in exchange for cash. When these payments failed, both lenders filed lawsuits against SEAM and Side over the missing funds.
"Defendants’ actions are nothing short of evil," the lawsuit states.
In a concerning development, Side deleted all her social media accounts and business websites in June. Additionally, SEAM announced that its staff is no longer employed.