Sacramento-area accountant pleads guilty to misusing money meant for surrogate moms
A Sacramento-area accountant who was hired to safeguard funds meant to pay the expenses of surrogate mothers pleaded guilty on Friday to six counts of wire fraud for transferring the money to his own accounts.
Darryl Lynn Kauffman, 67, was arrested in 2023 after a federal grand jury in Sacramento indicted him on charges of taking about $900,000 that clients of surrogacy agencies in Placerville and San Francisco had set aside to pay for prenatal care and other costs associated with delivering a baby.
The Gold River accountant, who practiced in Fair Oaks, is currently being held without bail in the Sacramento County Jail, records show. State records show his CPA license was revoked in 2019.
According to the indictment, the scheme worked like this: hopeful parents seeking a surrogate to carry a child are required to put funds aside in an escrow account, managed by a licensed escrow agent. These funds are then paid by the agent to the surrogate as needed to cover such costs as food, medical care and transportation.
Kauffman was not licensed to handle such escrow accounts, but he marketed himself to the two surrogacy agencies anyway, the indictment said. His contract said he would safeguard the funds from the parents, and use them to pay the surrogates’ expenses. But the indictment alleged that between June 2017 and March 2018, Kauffman diverted the funds to his own use and did not pay the surrogates’ expenses.
He initially pleaded not guilty in federal court in Sacramento, but on Friday entered into to a plea agreement in which he admitted guilt to six of the 17 counts of wire fraud with which he was originally charged.
Those counts included transferring to his own account deposits ranging from $20,000 to $60,000 from parents in China, Hong Kong and the United States, for a total of $230,000, court records show.
He is scheduled to be sentenced June 2 by U.S. District Judge Dena M. Coggins, court documents showed.
Online records of the California Board of Accountancy show that Kauffman’s CPA license was revoked in 2019 after he was accused of taking a retainer from a client and then failing to perform the work or return the money.
