We have been following the antics of Surrogate Parenting Center of Texas since September of last year. However, what has been lost in the recent media coverage of their business practices is the fact that Merritt Patterson did not merely preside over a failed company. There have been serious allegations of criminal conduct. Patterson’s attempt to spin herself as a victim is insulting and abhorrent.

Let’s be clear about what happened. SPCT received funds from clients that were specifically earmarked to compensate the surrogates and egg donors that were assisting their Intended Parents. These funds were to be held in trust and paid to the surrogates and donors according to written agreements in place. These were not funds available to SPCT to use to operate its business. Even if SPCT fell on hard times and had to cease operations, those trust funds should have been available in a segregated account to cover all current and future cycles. There is absolutely no justification for any surrogate or donor to not have received their payment – regardless of the financial condition of SPCT.

This is not mere speculation on my part. In the Summer of 2010, I helped two egg donors receive their compensation that was long overdue. At the time, the charade being employed by SPCT was to notify its donors that their compensation checks had been mailed in accordance with their contract. Days would go by and these donors would never receive their checks. When the donors called to complain, SPCT feigned surprise and promised to place a stop payment on the checks and reissue them. Patterson than advised these donors that because their funds were “certified”, that the stop payment process would take 45 days.

This was nothing but pure sophistry on Patterson’s part and was part of a clear pattern and practice on the part of Surrogate Parenting Center of Texas to intentionally defraud their donors by failing to make timely payments and then invoking fallacious excuses about the funds being unavailable for 45 days. I was able to speak to the bank identified by Patterson as having this 45 day stop payment policy and they explicitly denied having such a bogus policy. Ultimately we were successful in recovering the funds for these donors but it was clear that either SPCT never collected the donors’ fees in advance as contractually required or the funds were embezzled. I will let you draw your own conclusions as to which is the most likely scenario.

The harm went beyond just the surrogates and donors that were not paid. It also exposed the Intended Parents to liability as even if they deposited the funds with SPCT, they were ultimately responsible to their surrogates and egg donors for payment. Beyond that, SPCT’s shady practices exposed their Recipient Parents to the potential loss of their anonymity as egg donors would have been entitled to pursue them for their compensation — even though these potential parents had already provided those monies to SPCT.

So no one should feel sorry for Merritt Patterson or mistakenly believe SPCT is just another casualty of the economic downturn as she feebly tries to portray in yesterday’s media coverage.