Summary
- A Southern California couple, Silvia Zhang and Guojun Xuan, is under investigation for alleged surrogacy abuse and deceptive real estate business practices.
- Authorities took 21 children, all reportedly born via surrogacy, into protective custody after discovering them in the couple’s Arcadia home.
- Former employees accuse the couple of unfair labor practices at their real estate company, Yudao Investments, and have filed two lawsuits.
- Arcadia police, the FBI, and child welfare agencies are conducting investigations; no criminal charges have been filed against the couple as of the latest reports.
- Surrogate mothers allege they were misled about the true nature of the arrangements and the scale of the operation.
- The couple allegedly failed to pay overtime, denied proper breaks, and ran their business from their home, where children were found.
- Authorities seek the couple's nanny, Chunmei Li, who is suspected in the abuse of an infant that sparked the original investigation.
- Surrogacy and real estate regulatory gaps are under scrutiny as the case unfolds.
A Southern California couple accused of orchestrating a massive surrogacy operation and now facing lawsuits from former employees over real estate business practices are at the center of an unfolding legal and ethical controversy that has drawn in state and federal authorities, child welfare agencies, and the wider public.
Why Are Silvia Zhang and Guojun Xuan Under Investigation?
As reported by The Associated Press and corroborated by reporting from ABC7 Chicago and The Business Journal, Silvia Zhang, 38, and Guojun Xuan, 65, drew law enforcement’s attention after their 2-month-old infant was hospitalized with a severe head injury in May 2025. Following this incident, Arcadia police uncovered 15 children in the couple’s home, with six more traced to other locations, bringing the total to 21 children—all believed to be the legal children of Zhang and Xuan.
Lt. Kollin Cieadlo of the Arcadia Police Department told Eyewitness News and The Independent that "many of the children were birthed through surrogacy and then the male and female at the residence took legal guardianship of those kids." The children, mostly under age 3, were immediately taken into protective custody.
Police also issued an arrest warrant for the couple’s nanny, 56-year-old Chunmei Li, believed to be responsible for the baby’s traumatic injuries. She is reportedly still at large, according to police surveillance video reviewed by law enforcement.
What Led to the Surrogacy Probe?
Arcadia police first initiated their inquiry after the injured infant was brought to a hospital, according to ABC7 Chicago and Fox News Digital. The investigation quickly broadened after authorities discovered the children living in cramped conditions in the couple’s Arcadia residence. Of those children, investigators stated most were between one and three years old, and at least 17 of them were under three.
As cited by The Business Journal, Kallie Fell, director of the Center for Bioethics and Culture, described the scope of the operation as “exploitative,” highlighting how surrogate mothers were deceived. “She was lied to. She was told this couple had one other child and they wanted one more child to complete a family,” Fell said of a Texas woman who had delivered a baby for the couple, unaware of the operation’s true scale.
Multiple surrogates told reporters from The Associated Press and the San Francisco Chronicle that they were misled about the size of the family and the nature of the surrogacy arrangements. One woman, Esperanza, revealed she backed out after being asked to recruit her friends for the same program, calling the tactic unnerving and inconsistent with her expectations.
How Did the Couple Operate Their Surrogacy and Real Estate Businesses?
According to The Business Journal, business records show that Mark Surrogacy Investment LLC, a now-terminated entity, had been registered at the couple’s address. Zhang and Xuan’s connection to multiple surrogacy dealings raised questions about oversight and regulatory compliance, as described by Lt. Cieadlo, who admitted to The Associated Press, “We need to do a much deeper dive” into surrogacy law.
As further reported by AOL News and the Los Angeles Times, the couple simultaneously managed a real estate business, Yudao Investments, initially operated out of the same residence where the children were found. Six former employees filed a class action lawsuit accusing Zhang and Xuan of failing to pay overtime wages, denying timely rest breaks, and other unfair labor practices.
Tina Powers, a former assistant at Yudao Investments, told AOL News, "They're terrible people. They just had shady business practices." She described working with the couple for six months in 2022, during which she and several coworkers experienced wage theft and poor working conditions.
What Do the Lawsuits Against Zhang and Xuan Allege?
A class action lawsuit filed in Los Angeles County Superior Court in December 2023 remains ongoing, according to reports from AOL News and NBC Asian America. Plaintiffs, including Powers, allege wage theft violations, egregious treatment, and a lack of mandated employee breaks during their employment at Yudao Investments.
Zhang and Xuan have not issued public statements or commented despite multiple media requests. Attorneys representing them in the lawsuits have also not responded to inquiries.
What Regulatory and Legal Challenges Does the Case Highlight?
The case highlights significant legal ambiguities and regulatory gaps in both surrogacy and real estate oversight in California. Business records obtained by The Associated Press showed the surrogacy company linked to the couple had its license terminated in June 2025. Investigations are ongoing, with the FBI participating, though the agency declined official comment to The Associated Press.
Lt. Cieadlo conceded to the media that,
“I’m not familiar with how the surrogacy laws work…We need to do a much deeper dive.”
Several surrogates told news outlets they did not realize how many other women were involved or that the couple owned the agency operating the surrogacies.
How Are Surrogates Reacting to the Allegations?
Kayla Elliott, a Texas woman who gave birth for Zhang and Xuan, shared in an interview with Bioethics and Culture, cited by the Los Angeles Times and Yahoo News, that she believed she was helping a family in need but later discovered the couple’s true intentions. Elliott said, expressing regret and betrayal about her experience,
"I was tricked into carrying a child for an Arcadia couple who had multiple women serving as surrogates for them."
Another potential surrogate, Esperanza, recounted to The Associated Press that Zhang offered her $60,000 and later asked if she had friends who could also be surrogates, which deterred her from proceeding.
Why Is the FBI Involved, and What Is the Status of the Children?
The FBI’s involvement, as first reported by The Business Journal, suggests federal concerns over potential human trafficking, fraud, or wider abuses linked to surrogacy and adoption arrangements. All 21 children have been placed under the care of county child protection officials, and authorities continue to unravel how many surrogates were connected to the couple’s arrangement. Lt. Cieadlo noted that "all 21 of the kids were confirmed to be the children of 65-year-old Guojun Xuan and 38-year-old Silvia Zhang," but only a small number were believed to be biologically related to the couple.
What Happens Next For Zhang and Xuan?
As reported by multiple outlets including Fox News, Arcadia police, the Los Angeles County Department of Children and Family Services, and federal authorities have not confirmed any formal criminal charges against Zhang and Xuan as of July 2025. The investigation is ongoing, with a special focus on both the surrogacy practices and the business operations at Yudao Investments.
Legal experts and advocates for surrogate mothers have cited this case as evidence for the need for stricter oversight of both surrogacy agencies and real estate operators in California. As noted by the director of the Center for Bioethics and Culture, "They operate with zero oversight," underscoring the regulatory turmoil exposed by these combined investigations.