Escrow company stole millions from foster parents: lawsuit

A lawsuit says a Texas trust company is accused of stealing millions of dollars from families using surrogacy.

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A Texas trust company is accused of stealing millions of dollars from surrogacy families, the lawsuit says.

According to the company website, Surrogacy Escrow Account Management LLC (SEAM) is a third-party escrow management company designed to help families going through surrogacy manage their funds.

The company claims to have worked with over 1,000 families.

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However, according to the lawsuit, the company’s owner, Dominique Side, recently stole millions of dollars from customers, leaving them with $0 balances in their escrow accounts.

Side told McClatchy News in an email that, per her board’s advice, she is “not permitted to respond to any inquiries regarding the investigation.”

Side and SEAM are accused of defrauding their clients by “luring them into a fiduciary relationship in order to steal their deposit funds,” the lawsuit said.

Funds disappear from accounts

The plaintiff in the lawsuit learned that she would not be able to carry her own child, so she and her husband were matched with a surrogate mother. According to the lawsuit, once the couple was matched, they were told they would have to set up an account with an independent custodial fund.

The lawsuit says the couple entered into an agreement with SEAM and deposited more than $61,000 into the account. Court documents show that SEAM allegedly gave the money to his deputy to cover expenses.

However, on June 4, the couple received an email from SEAM informing them that the company was having problems with its banks and there would be delays in payments. Then on June 14, they received another email.

“Due to legal action, all operations have been suspended. “I am unable to provide further details on this matter,” the second email said, according to the lawsuit.

The lawsuit says Side and her business partner formed a new escrow company called Life Escrow LLC in March. After forming Life Escrow LLC, SEAM clients were told their funds were “withheld,” the lawsuit states.

Side then transferred all the money from SEAM’s accounts into a newly created trust fund, the lawsuit said. The court document shows that SEAM’s accounts currently have a balance of $0.

Hundreds of families affected

A Facebook group called “SEAM Breach” includes over 600 families who say they have been victims of SEAM fraud.

“Over $10 million in escrow fund accounts disappeared,” the lawsuit said.

“It was money that my husband and I were actually saving for, both of our mothers had saved for and donated to our goal,” Riane Woods, who is not named in the lawsuit but was a SEAM client, told KPRC.

“It’s unbelievably bad. It’s disgusting. It’s disgusting,” Michael Rodriguez, another SEAM customer, told the news outlet. “This only increases scrutiny and distrust in a very sensitive issue where we generally face so many challenges in becoming parents.”

Kelly Palladino told WTVT that she and her husband became SEAM clients after years of trying to start a family. But now the $60,000 she put into her trust account cannot be accessed.

“The agency that provides surrogacy services called us and they informed us that our surrogate had not received her payments,” she told the news agency.

According to the daily, Palladino requested a refund from Side via Venmo, but her request was denied.

The lawsuit lists only one plaintiff. It is asking the judge to award punitive damages ranging from $100,000 to $1 million.

Jennifer Rodriguez is a McClatchy National Real-Time reporter covering the Midwest and Midwest. She joined McClatchy in 2023 after covering local news in Youngstown, Ohio for over six years. Jennifer has made several achievements in her journalism career, including receiving the Robert R. Hare in English, the Emerging Leader Justice and Equality Award, the regional Edward R. Murrow Award, and the Distinguished Hispanic Ohioan Award.