Micah Nerio had known since his early 30s that he wanted to be a father, even if he did not have a partner. He spent a decade saving up to pursue surrogacy, an expensive process where he would create embryos with his sperm and a donor’s eggs to transfer to a woman who would carry the pregnancy.
Eventually, Mr. Nerio, now 40, selected a surrogate, who is due to give birth to his baby next month. Since 2022, he has sent over $118,000 to the agency that found his surrogate — money that went into an account to cover her medical bills, monthly compensation and other costs through the end of the pregnancy.
About a third of that money disappeared on Friday when the agency, Surro Connections, closed without warning. Mr. Nerio received a brief email stating that the business, which had operated for 13 years, had “no ability” to return clients’ funds. He had no way to retrieve the $44,000 left in his account with the agency, which was to be used to pay his surrogate’s remaining expenses.
“I trusted people, I worked hard, and this is just a punch in the stomach,” he said.
Surro Connections, based in Portland, Ore., was, until this month, a well-regarded surrogacy agency with clients from around the world. Now, many have lost tens of thousands of dollars, and their surrogates are in the middle of pregnancies.
Clients and employees say Megan Hall-Greenberg, Surro’s president and founder, suddenly became unreachable last week. She has recently faced multiple lawsuits over outstanding credit card and loan debt, court records show. Her company probably held millions of dollars of client funds but had only $100,000 in insurance coverage.
Ms. Hall-Greenberg did not respond to messages from The New York Times.
“You budget for unexpected costs, like if your surrogate opts out — you don’t budget for fraud,” said Jeff Manassero, who estimates that he and his husband, Andrew Garvin, had about $20,000 sitting with the company. Their surrogate is currently eight months pregnant.
The Times interviewed seven families who lost $20,000 to $81,000 each when Surro closed, according to records they shared. Families described scrambling to ensure that their surrogates would be paid, turning to relatives for loans and liquidating long-term savings accounts.
Corinne Mathiopoulos, Surro’s surrogacy program coordinator, said she worried what would happen if families did not have the money to continue paying their pregnant surrogates.
“How are the intended parents supposed to fund that account when everything was taken from them?” said Ms. Mathiopoulos, who had no warning of the closure and has not received her last paycheck. “There’s no money.”
Emily Potts, a surrogate who is eight months pregnant, began to suspect something was wrong when her monthly payment of almost $6,000 did not arrive on Dec. 1. A few days later, she got a call from her surrogacy lawyer, asking if she had heard about the financial trouble at Surro.
“I immediately started panicking,” said Ms. Potts, 30, who lives in Medford, Ore.
The parents whose child Ms. Potts is carrying have set up a new account to pay her.
“I’m grateful, but not every surrogate is in the same position,” she said. “I think about the people who saved for this because they so desperately wanted a child, who aren’t in a position to keep paying. It’s horrible.”
A Largely Unregulated Industry
There are at least 180 surrogacy agencies in the United States. They generally charge fees to match families with women willing to carry their pregnancies, and during pregnancy they often play a coordinating role, ensuring that families are appropriately compensating their surrogates under the terms of their contract.
Clients typically compensate the surrogate for the pregnancy and also cover the medical bills. They pay for incidentals, like Uber rides to prenatal care visits or parking fees at the hospital.
There is little government oversight of the surrogacy industry, making it hard to gauge whether the businesses are financially secure. People seeking surrogacy often rely on word-of-mouth reviews and companies’ own claims to select their agency.
Surro’s collapse is the second failure of a major surrogacy business in the past two years. In June 2024, dozens of families sued the owner of a company that specialized in financing surrogacy arrangements, claiming it stole millions of dollars from intended parents.
“There is a lot of good will and energy in this field but also some bad apples,” said Ron Poole-Dayan, the president of Men Having Babies, a nonprofit that organizes educational conferences on surrogacy. “People are vulnerable.”
His organization is working with 46 couples affected by Surro’s closure and plans to offer financial aid to ensure that surrogates continue to get paid.
Questionable Practices
Parents-to-be said they were drawn to Surro because it had been in business for over a decade. They liked that the company had a good reputation but was smaller than some of the major agencies, and appeared to offer more hands-on support for the complex journey of starting a family with a surrogate.
Its president had a compelling personal story: Ms. Hall-Greenberg had been a surrogate three times before founding Surro in 2011. Couples interviewed by The Times described her as compassionate, friendly and easy to talk to. Some said she seemed reputable because she was an adviser to Men Having Babies and a frequent speaker at the group’s conferences.
Mr. Nerio kept notes on the surrogacy agencies he researched. “Family, close-knit approach to clients,” he wrote of Surro. “Participates in several webinars, conferences. Very good reviews.”
But the company operated in an unusual way. Typically, surrogacy agencies deposit client funds into a third-party escrow account that is independently run. The entity overseeing the escrow will ensure that the surrogate is being properly reimbursed and that the funds are not used for anything outside the contract.
“There has to be an independent escrow,” said Rebecca Mendel, a partner at the New York law firm Rosin Steinhagen Mendel who specializes in surrogacy law. “When you use an independent escrow you’re putting any conflict aside because they are neutral.”
Ms. Hall-Greenberg, however, routinely advised clients to give the funds to Surro directly. When people raised questions, she assured them that the money would be safe and that the option was easier than involving another party.
“How secure are the escrow funds in the event of a bankruptcy?” one client asked in a February 2024 email The Times reviewed.
“Our escrow funds are kept separate completely in F.D.I.C. (government-regulated banking insurance) banks to protect you,” she responded.
Clients believed that their money had been stored in individual accounts. In reality, multiple clients across the world wired transfers to the same account at a Wells Fargo branch near Ms. Hall-Greenberg’s home, according to transfer records from three former clients that The Times reviewed.
Joshua Gold texted Ms. Hall-Greenberg in June 2024 after his surrogate suggested using a large, third-party escrow company. Ms. Hall-Greenberg disparaged that firm for charging a $2,000 administrative fee.
“Lately they are awful,” she wrote in a text message that Mr. Gold showed The Times. “Major problems with payments.”
Mr. Gold, who is a brother-in-law of a Times employee, and his husband followed Ms. Hall-Greenberg’s advice and allowed Surro to handle their funds. At one point, he even joked about the conflict with Ms. Hall-Greenberg, saying that she could be “buying the kids Christmas gifts with my escrow money.”
She responded, “U weren’t supposed to know.”
Their son was born via surrogacy just before Thanksgiving. Their last payment to Surro was for $33,000 in September. Mr. Gold estimates he still has $9,000 in outstanding costs for his surrogate’s delivery. He had expected a refund from Surro of more than $20,000 for the difference but now believes the money to be lost.
In May 2024, the leadership of Men Having Babies became aware that Surro held patient money in-house. The organization advised Ms. Hall-Greenberg that she would need to start using a third-party escrow accounts if she wanted to remain on the group’s council of industry advisers, said Mr. Poole-Dayan, the group’s president.
Ms. Hall-Greenberg declined, he said, and was removed from the advisory council last June.
Outstanding Debts
In November, a former Surro client sent an email to Ms. Hall-Greenberg asking that she return the $39,000 left in his account after deciding to no longer pursue surrogacy.
The email, which The Times reviewed, noted that the client had been seeking a refund for over a year, and threatened to report Ms. Hall-Greenberg to the authorities.
She urged him not to involve law enforcement, promising she would pay him back in installments over the next month. “This is how I support my children,” she wrote of the business in an email reviewed by The Times. “I have failed you. I am truly sorry.”
Ms. Hall-Greenberg made the first payment in her plan but then stopped sending the money.
That interaction was one of multiple signs this year that Ms. Hall-Greenberg and her business were under financial scrutiny and distress.
Ms. Mathiopoulos, the former employee, said that just before Thanksgiving the company’s credit card was repeatedly declined when staff members tried to prepay certain fetal monitoring appointments.
Monthly payments to surrogates were late in November. Some had medical bills sent to collections because Surro had left them unpaid.
American Express has won two lawsuits against Ms. Hall-Greenberg this year for outstanding credit card debt. In September, Ms. Hall-Greenberg signed a contract promising to pay a lender a set share of Surro’s upcoming revenue in exchange for an immediate $15,000 cash infusion. The lender, Alpine Advance, sued her in New York three weeks later for defaulting on the agreement.
Some surrogacy agencies have begun offering to waive administrative fees, which can cost thousands of dollars, to Surro clients who transfer their contracts. But the parents are still responsible for their surrogate’s medical bills and compensation, which make up the bulk of expenses.
Over the weekend, Mr. Nerio began working with one of those companies. He is excited for his child’s birth but angry at the betrayal he experienced. He will tap into his savings to cover his losses.
“At night, I’m staring at the ceiling thinking, Is $44,000 really gone?” he said. “Hopefully it will sting a little less once I’m holding a baby in my arms.”
Kirsten Noyes and Susan Beachy contributed research.
Sarah Kliff is an investigative health care reporter for The Times.
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