On December 13th, 2022

Former Gold River Resident Charged with Defrauding Clients of Surrogacy Agencies California Department of Consumer Affairs – Division of Investigation and Homeland Security Investigations investigated this case

“Intended-parents working with surrogacy agencies certainly don’t need the added financial stress that this individual is suspected of causing through his alleged fraudulent actions.  California Department of Consumer Affairs investigators work to protect consumers from harm.  Their work investigating cases rarely is in the spotlight, but the jobs they perform are of great public service.” – CSLEA President Alan Barcelona

SACRAMENTO – On December 12, 2022, Darryl Lynn Kauffman, 74, of Las Vegas, was arrested in Los Angeles, after being charged in a scheme to defraud intended-parent clients of surrogacy agencies in Placerville and San Francisco.

A federal grand jury returned an indictment charging Kauffman with 17 counts of wire fraud. The indictment was unsealed following his arrest.

According to court documents, Kauffman, who was a CPA, held himself out as an escrow agent who specialized in providing escrow services to surrogacy agencies and their clients, the intended parents. California law requires that intended parents using the services of a surrogacy agency use escrow services and a licensed escrow agent for the payment of medical expenses and other fees to surrogate mothers. Kauffman provided escrow contracts to the intended parents through the agencies that listed him as an escrow agent. Kauffman, who was not a licensed agent, also advertised that his specialty was in providing escrow services for surrogacy cases.

According to the indictment, beginning in 2015 and continuing until March 2018, Kauffman defrauded clients from two surrogacy agencies. Intended parents in the United States, Asia, and Europe wired money to Kauffman believing he was an escrow agent and was segregating their funds into individual accounts. In fact, the intended parents were wiring money directly into Kauffman’s business bank accounts where it was co-mingled with funds from other intended parents’ and Kauffman’s other business ventures. Kauffman eventually stopped paying surrogacy fees and expenses as required by the escrow contract and converted the intended parents’ money to his own personal use. Kauffman sent false account statements to the intended parents that listed remaining funds in their escrow accounts when, in fact he had already spent their money. Kauffman ultimately defrauded the intended parents of more than $900,000.

This case is the product of an investigation by Homeland Security Investigations and the California Department of Consumer Affairs – Division of Investigation. Assistant U.S. Attorney Heiko P. Coppola is prosecuting the case.

If convicted, Kauffman faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

 

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