US Surrogacy Industry Riddled With Loopholes, Shady Deals

The United States is the only developed country where commercial surrogacy is legal, yet a yearlong investigation published by CBS News finds that minimal oversight and a patchwork of state laws leave surrogates and intended parents exposed to exploitation. Drawing on interviews with 32 surrogates and a review of hundreds of contracts and court documents, the probe describes an industry where a woman can discover only at delivery that she is carrying for a different couple than she expected — and where no federal agency tracks the births at all.

A Patchwork of Laws, Few Safeguards

The investigation found no official tally of surrogacy births in the U.S., though those in the field estimate there are up to about 10,000 a year. No federal agency tracks these births, and regulation is left almost entirely to the states. California is the most permissive jurisdiction, and all 32 surrogates interviewed by CBS News had their embryos transferred there, even those who lived elsewhere.

“We have the most favorable laws and geographically, we are the largest state closest to mainland China or Taiwan,” said Dean Masserman, a partner at a California fertility and family law firm.

The gaps are structural, not incidental. For years, rules focused on protecting the parental rights of those seeking a surrogate rather than safeguarding the surrogates themselves. Most states do not require intended parents to undergo background checks — a standard step in most adoptions — and New York remains the only state requiring surrogacy agencies to be licensed.

“You could open up an agency with $300 and an LLC certificate in most states,” said surrogacy attorney Melissa Brisman.

Surrogates Report Deception and Disparity

The CBS News investigation documents a recurring pattern: women promised a family-building partnership who instead learned they were one of many surrogates working for the same intended parents. One surrogate, an undocumented immigrant from Honduras identified only as Andrea to protect her immigration status, said a couple she had been introduced to on a video call was nowhere to be found when she gave birth in October 2024.

“When the baby was born and they arrived at the hospital, it was a completely different couple,” she said. She handed over the infant and was paid about $40,000 — far below the six-figure sums often advertised.

Mayra Arley Hernandez, 42, said she never met the parents of the twins she carried until delivery. “It was weird,” she said in Spanish. “They wanted the process quick, for me to hurry, to go to the appointments, and for everything to be private.”

Taken together, the surrogates interviewed by CBS News reported receiving typically about $45,000 for single births and under $70,000 for twins, even as agencies and escrow companies processed millions of dollars. Some also reported pressure to implant two embryos at once.

The Arcadia Case

The investigation’s most striking thread is the case of Silvia Zhang and Guojun Xuan, an Arcadia, California, couple who had at least 25 children through surrogates. The couple’s surrogacy businesses were registered to their home. Their 2-month-old son was hospitalized in May 2025 with head injuries suspected to be from abuse, according to CBS News. In July 2025, authorities raided the family’s mansion and removed 21 children. An arrest warrant was issued for a nanny seen on video violently shaking the baby.

Surrogates who carried children for the couple said they had been told the pair had one teenage child and wanted another. Kayla Elliott, a 27-year-old surrogate who delivered a baby in March 2025, said Mark Surrogacy told her the couple had given up on a second child after 10 rounds of failed fertility treatments. After the birth, she said, “I was a bit hysterical. You just don’t expect that you’re going to go through a pregnancy and a delivery and then hand the baby over to their parents and then all of a sudden find out that there was abuse and neglect going on.”

Alexa Fasold, a 26-year-old Pennsylvania surrogate, was still pregnant when the agency dissolved in June 2025. She described to NBC News a process that had, in retrospect, been full of red flags — including an agency that agreed to her every condition. “We were supposed to be completing a family or helping a family start,” she said. “And it turned into this horror movie.”

Neither Zhang nor Xuan has been charged. They have said through court filings that they intended to build a large family and deny wrongdoing, though the investigation remains active.

Going Global

The case has drawn federal attention and exposed the international dimensions of the U.S. surrogacy market. An Emory University study found that from 2014 to 2020, just over 41% of international parents using U.S. surrogates were Chinese. In November 2025, U.S. Sen. Rick Scott introduced the SAFE KIDS Act, a bill that would void surrogacy agreements with citizens of “foreign entities of concern” — including China — and impose criminal penalties on brokers who facilitate them.

The measure’s findings state that “recent events in Arcadia, California reveal that surrogacy is even being used to facilitate human trafficking.” Surrogacy is illegal in China, which helps drive demand to California, where children gain American citizenship at birth.

The investigation also places a spotlight on Chinese billionaire and video game executive Xu Bo, reported by CBS News and the Wall Street Journal to have fathered more than 100 children through U.S. surrogates. A surrogate identified as Judy, carrying a child for Xu Bo through the agency Patriot Conceptions, asked at least five times to meet the intended father, without success. “It leaves me wondering: do I even have a right to know?” she said.

Xu Bo disputed the numbers in a statement carried by the Chinese outlet Tencent News, saying he has custody of 12 children born through surrogacy in the U.S. “Mr. Xu Bo believes in the philosophy that more children bring more blessings,” the statement said.

Analysis: A System That Rewards Silence

The investigation’s central finding is less a single scandal than a systemic vacuum. Because no federal agency tallies surrogacy births and only one state licenses agencies, abuses can go undetected, and the large sums of money changing hands create powerful incentives for silence.

“In most Americans’ minds, it’s completely unethical [for one set of parents] to have 20 surrogates going at the same time in different states without their knowledge,” Brisman said. “But there are no laws governing the number of surrogates intended parents can use.”

She added that requesting a criminal background check “is not a big ask… from a total stranger asking you to carry their baby.” Several of the women CBS News interviewed described that gap as a fundamental failure of oversight.

Industry insiders caution that the legislative response so far — targeting foreign nationality rather than strengthening safeguards for surrogates — risks pushing the practice “underground or overseas to places with even weaker protections.”

What’s Next

The SAFE KIDS Act remains in committee, and the Arcadia investigation is ongoing, with police saying the couple still holds active contracts for more children and that fertility clinics are believed to retain dozens of their unused embryos. Meanwhile, Andrea — who initially agreed to speak on camera before canceling minutes before her interview — offered a window into why abuses so often stay hidden.

“I know I’m not the only one,” she said. “There must be more.” In a final email withdrawing her participation, she wrote simply: “I can’t. I’m too scared.”