Health Law

Surrogacy agency is in involuntary bankruptcy; lawyer says he lost $37K

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The owner of a medical tourism company that expanded to provide surrogacy services is defending his oversight even as some former clients allege they paid tens of thousands of dollars and received nothing in return.

The company is Planet Hospital and its founder is Rudy Rupak. According to the New York Times, Planet Hospital is in involuntary bankruptcy and under investigation by the FBI. Planet Hospital’s story, the Times says, “stands as a cautionary tale about the proliferation of unregulated surrogacy agencies, their lack of accountability and their ability to prey on vulnerable clients who want a baby so badly that they do not notice all the red flags.”

Planet Hospital’s surrogacy program started in India, which later restricted surrogacy, the story says. Rupak moved his company to Thailand and then to Mexico. Representatives from two fertility clinics in Mexico who worked with Planet Hospital told the Times the relationship was fraught with problems; one couple says a clinic told them it had not been paid.

Among the unhappy clients is Washington, D.C., lawyer Jonathan C. Dailey, who says he wired the company an initial payment of $37,000 for a woman in Mexico to carry his child. He says there was no baby. “It’s like we paid money to buy a condo, they took the money, and there was no condo,” he told the Times. “But it’s worse, because it’s about having a baby.”

Some unhappy clients did receive partial refunds, the story says. Rupak told the Times he “made some horrendous mistakes” but his intentions were good. He says he became overextended when he expanded into surrogacy and fell behind on payments.

“What happened is entirely 100 percent my fault, but it’s mismanagement rather than outright fraud,” Rupak said. “I am an entrepreneur, but I am notoriously, notoriously bad at contracts.”

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