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Allison Layton, who owned a California company called Miracles Egg Donation (Miracles), claimed she was in the business of helping infertile couples have children. But her business turned out to be a fraud, and she ended up stealing her victims’ hopes and dreams as well as their money.

Would-be parents paid Miracles tens of thousands of dollars—sometimes their life savings—for egg donation and surrogacy services that Layton promised to coordinate. Instead, during a three-year period beginning in 2008, she defrauded couples, egg donors, and surrogate mothers while living a lavish lifestyle off the proceeds.

“This was not a typical white-collar case,” said Special Agent Dana Eads, who led the investigation from the FBI’s Los Angeles Division. “Many of the victims were in a vulnerable place in their lives—working against their biological clocks and trying to afford this expensive and time-consuming procedure. Some told the judge that because of Layton’s actions, they had effectively missed the opportunity to have children.”

The fees paid to Miracles by would-be parents—known in the surrogacy world as intended parents—were supposed to go into escrow accounts...