‘It's just really sad': North Texas surrogate reacts to scandal involving Houston escrow company

The scandal involving a Houston-based surrogacy escrow company continues to impact hundreds of people in Texas and around the globe.

A lawsuit accuses the owner of SEAM, Surrogacy Escrow Account Management, of spending millions of dollars of clients' money for personal use.

"These people are putting not only their savings and their last amount of money, but also their last amount of hope," said Katie Lynch, who also used the company herself and lost thousands.

She and her husband, John, have been on an emotional journey for the past five years trying to have a baby. The couple said they tried everything, including in-vitro fertilization, to get pregnant but were met with heartbreak multiple times.

"We had good embryos, but my body couldn't carry them," explained Lynch.

"It was really hard to see your friend go through heartbreak, just minimum disappointment, and every month, and then heartbreak when there were actual losses, it was really tough to go through, to witness," said Vicky Ursi, the couple's close friend.

Ursi, her husband, and their two kids witnessed the pain the Lynchs experienced over the years.

"We had joked for many years making light of the situation. I guess that my uterus seemed to be working just fine, and so if she needed to borrow one, there was one available," said Ursi.

The joke became a reality last year.

"Our friend Vicky had been watching us throughout the whole five years, and all the tears and hope, and then all the hope was gone. She had had children and had pretty easy pregnancies, and so she said, 'Let's try it,'' and the first transfer of her worked, and she had a great pregnancy, and the birth was great," said Lynch.

Ursi gave birth to her friend's son, John Robert, Jr., in May. The miracle baby is almost three months old and thriving.

"He's perfect, he’s happy, he’s healthy, and we’re so excited," expressed Lynch. It's still surreal; it still doesn’t feel real. The sleep exhaustion feels real, but you try for something for so long, and now I’m a mom, and it’s crazy.”

"A lot of people asked me, 'Is it going to be hard handing the baby over?' And I just went into it knowing it was my friend's baby, and I said, ' It's going to be amazing seeing her with her baby, and so I was very excited for them to have that and that I was able to help them,'" said Ursi.

Even though the friends are more like family and bonded even more in the past nine months, to protect everyone involved, they went through surrogacy lawyers. They have a contract and used an escrow account to pay for Ursi's medical bills.

"I was sort of being naive, 'Like, well, we're friends, can I just like Venmo her?' And they [lawyers] were like,' 'No.' This is a huge job. It's a huge amount of money, and to protect both sides, you really need to use an escrow company as a third party," explained Lynch.

The couple said they received some suggestions, including SEAM, and went with the company.

“I just picked SEAM out of the two, and the onboarding was easy. Vicky, getting signed up with them was easy. Everything was great until it wasn't," said Lynch.

They deposited $36,000 into the escrow account last year. SEAM was in charge of dispersing that money to Ursi. They were about to deposit more money in June, but Ursi told the couple to wait.

"We were about to put in another $8,000, and Vicky is the one that actually saw chatter among the surrogates on social media, saying some surrogates weren't getting their payments, and some people were noticing that their accounts were lower than they should be," said Lynch.

"It was a gut feeling. I just had a feeling that we should wait and see make sure things were on the up and up," said Ursi.

In June, the couple and hundreds of others received emails stating there was 'fraudulent activity' in the accounts to explain why payments went through. But soon after, they received an email saying, "Due to legal action, all operations have been placed on hold."

Followed by another automated email from the owner, Dominique Side, stating, "My sincerest apologies for the non-responsiveness. My company and I have been noticed that we are subject to an active investigation by federal authorities. Under advice of counsel, I am not permitted to respond to any inquiries regarding the investigation. Please be kindly advised that the investigation involves only me, as an individual, and SEAM, as a single-member entity. Regards, Dominique."

"It was mid-June, and thankfully, we didn't deposit that next $8,000, but we still lost $6,000," said Lynch, who believes they are one of the luckier intended parents.

"We're lucky with the timing of when it happened in our journey, but you know, that's just luck. Four months earlier, and we would have been running around stressed, not knowing what to do," said Lynch's husband, John.

According to a lawsuit, Side is accused of taking more than $10 million from the escrow accounts to fund a lavish lifestyle, rap and R&B career, music studio, real estate, and payments to creditors and business associates.

"Living it up on other people's money. I mean, it's crazy," said John.

“It's $10 million. What do you even do with that? And then how many families was that supposed to create? And it's, it's gone, and now some people either can't pay their surrogates, and surrogates aren't able to make any income because they're on bed rest, or they're having medical issues being pregnant," said Lynch.

Last month a Harris County judge ordered a temporary injunction to freeze all of her financials accounts and SEAM's accounts.

Attorneys representing dozens of families in the lawsuit are working to find ways to recoup the money.

“I believe all the money's gone, but I want these families to get their money back. It's their money. It's the surrogate's money. It was never the escrow company's money. And I don't really, I don't really care what happens to Dominique. I just want the families to get their money back so that they can try to have a baby," said Lynch.

She and more than 800 others are part of a Facebook group that continues to track what happened and share stories. Some have contacted their various lawmakers.

"I guess we need to actually see if we can get some laws passed," said Lynch regarding protecting those in the surrogacy world using escrow accounts.

"Like Vicky has said, you don't get to surrogacy as your first choice. You usually end up because it's a last resort and because you've gone through some sort of trauma and a lot of loss," said Katie Lynch

“Just really sad, anger, I mean, angry toward her, but really, overwhelmingly sad for all of the people who are missing out on their families and their babies. They've already lost so much, and now they've lost so much financially," said Usri, regarding families who had a tough time conceiving.

The FBI Houston division is investigating and set up a website to collect information from people who believe they were, "victimized by SEAM or have information relevant to this investigation."