Federal prosecutors have charged three people connected to Surro Connections, a Washington-based surrogacy agency, with running a scheme that allegedly diverted millions of dollars entrusted by intended parents and surrogates into gambling debts, luxury vacations, and designer jewelry. The defendants are identified as agency owner Megan Hall-Greenberg, 49, her husband Jeffrey Greenberg, 45, both of Washougal, Washington, and business manager Heather Morgan, 47, of Camas, Washington. All three are scheduled to make an initial appearance in U.S. District Court in Oakland at 10:30 a.m. on September 3.
The charges were announced by the FBI, working in partnership with the U.S. Attorney's Office for the Northern District of California, according to a case update posted by FBI San Francisco. Per the FBI, the three individuals connected to Surro Connections are alleged to have misappropriated millions of dollars that intended parents and surrogates had entrusted to the agency, and to have concealed the company's collapse from clients even as it was happening.
#FBI Case Update: The FBI, working in partnership with the U.S. Attorney’s Office for the Northern District of California, has announced charges against three individuals connected to Surro Connections, a Washington-based surrogacy agency. The defendants are alleged to have… pic.twitter.com/3L6ahtshC1
— FBI SanFrancisco (@FBISanFrancisco) August 27, 2026
Where the Money Allegedly Went
According to an indictment summary published by the Department of Justice, Hall-Greenberg and Jeffrey Greenberg spent more than $1.1 million in misappropriated client escrow funds on personal gambling debts, cruises, trips to Las Vegas, and a Mexican resort vacation. Prosecutors say another $60,000 went toward luxury watches, Louis Vuitton purses, and jewelry, with client deposits that were meant to cover medical and legal fees instead diverted for personal enrichment.
Federal prosecutors claim more than $300,000 in diverted client funds was funneled into a cheerleading business owned by Hall-Greenberg, while additional funds were routed through her personal account into an account connected to her husband's vehicle-repair shop, the International Comparative Legal Guides reported. Those transfers form the core of the money-laundering charges the trio now faces.
Fake Balance Statements Hid a 19-Month Collapse
The indictment alleges the defendants concealed the agency's insolvency for more than 19 months by issuing fictitious balance statements. In one instance detailed by the same outlet, a couple was told in 2025 that nearly $32,000 remained in their escrow account when it actually held 33 cents.
Surro Connections had operated for roughly 15 years before it abruptly shut down in December 2025, sending an email to around 150 client families stating the company had no liquid capital and no ability to return client deposits, according to Columbia Countercurrent. The closure left pregnant surrogates without stipend disbursements and left intended parents without the savings they had put toward building their families.
Losses Estimated Between $2 Million and $5 Million
Surro Connections typically collected client deposits exceeding $100,000 per family, and total estimated client losses from the agency's collapse are estimated between $2 million and $5 million, per federal court filings and Columbia Countercurrent's reporting. Many of those deposits came from personal savings, loans, or family contributions, the outlet noted.
Wire fraud under 18 U.S.C. § 1343 and money laundering under 18 U.S.C. § 1956 each carry a maximum statutory penalty of up to 20 years in federal prison per count upon conviction, according to a legal analysis from the Helfend Law Group. Actual sentences, if convictions occur, would depend on loss calculations under federal sentencing guidelines.
A Regulatory Gap Across the Surrogacy Industry
California law offers a pointed contrast to what allegedly happened at Surro Connections. California Family Code § 7961, enacted after the 2009 SurroGenesis surrogacy escrow fraud, requires non-attorney surrogacy facilitators to deposit client funds into a licensed, independent, bonded escrow depository or an attorney trust account, and it strictly prohibits facilitators from holding any financial interest in the escrow provider, according to FindLaw. Surro Connections instead operated its own in-house escrow system in Washington state, without a similar statutory separation.
That gap is not unique to Washington. Commercial surrogacy escrow accounts and agencies face no federal licensing authority or federal regulation in the United States, and most states impose zero financial oversight or bonding requirements, according to an analysis by the Law Office of Matthew G. Goodwin. While the medical side of surrogacy is heavily regulated, agency fund management largely is not, allowing owners to commingle client funds with little external check.
The Surro Connections case follows a similarly large surrogacy escrow collapse in June 2024, when Houston-based Surrogacy Escrow Account Management, or SEAM, shut down after its owner allegedly misappropriated more than $10 million from hundreds of families to fund personal luxuries and a music career, as reported by the Los Angeles Times. That scandal similarly triggered federal investigations and civil asset freezes, and Hoodline previously covered the fallout for affected families.
It remains unclear whether federal prosecutors will seek pre-trial asset freezes or a restitution fund to help recover losses for the families affected by the Surro Connections collapse. It is also unresolved how the Northern District of California will handle jurisdictional questions, given that the defendants lived in Washington state while the alleged scheme touched families across multiple states and internationally.
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