The founder of a San Diego-based business has been indicted by a federal grand jury on charges that he stole more than $2 million from infertile clients who sought his help in finding surrogacy services.
Acharayya Rupuk, founder of Planet Hospital, a medical tourism comapany, acted as an intermediary between his clients and Mexican clinics that provide egg donors, in vitro fertilization and surrogates.
Medical tourism companies facilitate travel to foreign countries for medical procedures at more affordable prices.
Rupak pocketed money from American clients that was supposed to go to clinics for various surrogacy services, officials said.
The clinics never received the money and the clients never received any services, according to the indictment.
“People who seek the help of a surrogate are on an exhausting, expensive and emotional journey,” said U.S. Attorney Laura Duffy. “They shouldn’t have their dream to have a child trampled by someone they trust to help them.”
Rupak, who has also used the names Rudy Rupak, Rudolph Matthews and Kevin Thomas Rudolph Matthews, made his first appearance in federal court Tuesday.
“Though the FBI investigates many types of fraud, it is concerning when victims have been taken advantage of because of their desire to start a family,” said FBI Special Agent in Charge Eric S. Birnbaum. “The FBI will use our resources appropriately to root out fraudulent surrogacy schemes that violate the trust of the American public.”
Rupak, a Canadian citizen living in Calabasas, had business addresses in San Diego, Calabasas and Calexico.
He began offering international surrogacy services in 2008, by paying women to have an embryo transferred into her womb and bringing the child to term for another woman.
In 2009, he started soliciting international surrogacy clients with promises of discounted prices, but later charged them with additional fees, accoring to the indictment.
Federal officials say he convinced clients to send him thousands of dollars by falsely representing that their funds would be put into escrow accounts and used only to pay for medical services.
Rupak failed to forward the clients’ funds to service providers such as egg donor companies, IVF clinics and surrogacy services, according to the indictment. The companies would then demand additional fees from the clients who had already paid for the services.
Rupak created fake websites and email addresses in the name of different clinics and physicians to cover his thefts, giving excuses or falsely claiming surrogacy procedures were unsuccessful.
He lied to his clients about success rates and falsely claimed ownership interest in two IVF clinics in Cancun, Mexico, the indictment said.
Eventually he started using funds from new clients to pay for services provided to existing Planet Hospital clients, much like a Ponzi scheme.
His bond was set at $50,000 and his next court hearing is scheduled for July 25.