California couple arrested on child abuse charges in horrifying surrogacy probe

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California couple arrested on child abuse charges in horrifying surrogacy probe

2026-10-07 03:20 Last Updated At：03:30

LOS ANGELES (AP) — A California couple has been arrested on child abuse charges following an investigation into a surrogacy scheme involving at least 21 children ranging in age from a few months to 13 years, authorities said Tuesday.

Guojun Xuan, 66, and his wife, Silvia Zhang, 39, face several counts of child abuse, as well as conspiracy to commit child abuse, accessory after the fact, and dissuading a witness, Los Angeles County District Attorney Nathan Hochman said.

“This case is unprecedented. It is horrific,” Hochman said during a news conference Tuesday morning. “The physical abuse, beating and punishment that these very young children received is despicable.”

Prosecutors are seeking $100 million bail for the couple because of the serious nature of the charges and because they are flight risks, Hochman said. They were scheduled to be arraigned at the Pasadena courthouse later Tuesday.

Fifteen children were removed from the couple’s opulent home in Arcadia last year after an allegation of abuse, and another six living elsewhere were also located. They ranged in age from 2 months to 13 years, with most between 1 and 3. Police believe Zhang gave birth to one or two of the children while the rest were carried and delivered by surrogates.

Hochman said the couple set up a surrogacy agency that they operated from their home and used that agency to hire surrogates throughout the U.S.

“The house could only be described as a house of horrors for these incredible young children,” Hochman said.

Zhang and Xuan were first arrested in May 2025 after a hospital reported that their 2-month-old infant had a traumatic head injury, the result of a nanny at the home violently shaking the baby, according to Arcadia police.

Arcadia police did not file charges at the time, saying they needed to complete the investigation.

Hochman said the couple set up three rooms they called learning centers, where the children spent several hours a day sitting at desks under the supervision of nannies.

Through an extensive surveillance system including motion-activated cameras, the couple watched as the nannies subjected the children to physical abuse including daily beatings, he said.

In one video, Xuan enters one of the rooms and tells a nanny to strike a child harder, and in another he joins the nanny in hitting the child, Hochman said.

He said the nannies were told “not to leave any physical marks on the children,” and when police arrived to investigate in May 2025, the couple told the children to deny they had been beaten.

After examining the surveillance footage, police issued an arrest warrant for Chunmei Li, the nanny seen hurting the 2-month-old infant, but she could not be found.

Hochman said “there will be a reckoning” for the defendants, one of whom faces more than 17 years in prison if convicted.

When asked about the couple’s motivation, Hochman said that was part of the ongoing investigation, as was the parentage of each child.

Mitchell Krems, Xuan’s attorney, previously told ABC7 that Xuan’s goal was to raise children who become productive adults.

“The reason he has all these children is because he wants them to contribute to society. He is not a man who is self-indulgent,” Krems said. “Some who are wealthy might spend on jewelry or cars, but he is actually spending his resources to help his children become educated so that they can be the philosophers, the physicians, the researchers and the inventors that help society.”

Krems did not immediately respond to an emailed request for comment on Tuesday’s arrests.

Surrogacy is an arrangement in which a woman agrees to carry and deliver a child for another person or couple, often after an embryo transfer.

There is no comprehensive federal law regulating surrogacy, leaving most rules to the states.

California is considered a “surrogacy-friendly state” because it has clear laws governing the process. Both sides are required to have lawyers, and there must be a written, notarized contract before an embryo transfer takes place.

Investigators have said they were looking into whether the couple had misled surrogates around the country and that at least eight women came forward to say they were aggressively pursued by the couple to serve as surrogates.

The women, many of whom were first-time surrogates, say they were given misleading or incomplete information about the couple’s family situation and intentions.

At least one, Kayla Elliott, is now trying to get custody of a baby she birthed for the couple.

Marcelo reported from New York City.

Wall Street rallies toward an all-time high

NEW YORK (AP) — The U.S. stock market is closing in on an all-time high on Tuesday.

The S&P 500 climbed 0.7% and is on track to finish the day above its record closing level set in August. Even with worries about war, high inflation and pressure from the bond market continuing to weigh on it, the backbone of many 401(k) accounts has soared 23% since hitting a bottom in late March.

The Dow Jones Industrial Average was up 283 points, or 0.6%, with roughly an hour remaining in trading, while the Nasdaq composite was adding 0.6% to its own all-time high set the day before. The spurts for stock prices are helping investors feel better about their finances, or at least less bad, when Americans are generally feeling more discouraged about keeping up with the fast-rising cost of living.

Many of the fears that sent the U.S. stock market to its bottom in March, sparked by the war with Iran, have indeed come true. Oil prices have jumped, which has made inflation worse. That has helped crank yields higher in the bond market, which is threatening to slow the economy by making it more expensive for everyone to borrow money.

But despite all those challenges, one vital source of support has remained resolute for the U.S. stock market: the relentless ability for U.S. companies to make bigger profits.

Lamb Weston, which sells frozen fries and other potato products, said on Tuesday that its profit and revenue during its latest quarter topped its projections, for example. The results also beat analysts’ expectations, and its stock rallied 8.2%.

CEO Mike Smith said the company continues to deal with unexpected increases in freight and other expenses as inflation remains high. But the company nevertheless raised its forecast for an underlying measure of profit for its full fiscal year.

It's not just potato products proving to be more profitable. All kinds of companies are lining up to report soon how much profit they made from July through September, and expectations are high for strong growth. Delta Air Lines will report its third-quarter results on Friday, with several of the country’s biggest banks headlining the following week.

Analysts expect companies in the S&P 500 to deliver overall growth of nearly 30% in earnings per share from a year earlier, according to FactSet. If they’re correct, it would be the third straight quarter of growth better than 25%.

That's crucial because corporate profits are one of the big levers that help set prices for stocks, along with interest rates. At the moment, high bond yields are pushing downward on stock prices because they make investors less willing to pay high prices for investments that aren't bonds. But earnings are rising at the same time “to win the tug-of-war against yields” and keep the market high, according to strategists at Barclays Capital.

Bond yields worldwide offered some slack on Tuesday after falling back from their highest levels in years or even decades. The yield on the 10-year Treasury, which is the focal point of the U.S. bond market, eased to 5.26% from 5.31% late Monday.

It fell after oil prices steadied themselves somewhat. The price for a barrel of Brent crude oil, the international standard, fell as low as $97.06 in the morning before pulling back to settle at $100.58. While that was up 0.3% from Monday's settlement price, it's still below the nearly $110 it was at a few weeks ago, and the easing removes some of the pressure from inflation.

On Wall Street, stocks involved in the artificial-intelligence frenzy have been behind much of the market's record-setting run, and Constellation Energy jumped 11.7% on Tuesday.

It announced a long-term deal to supply Google with about as much electricity as a new nuclear reactor makes. The boom in AI data centers has made not just electricity more in demand but also construction crews and materials throughout the economy.

Elsewhere on Wall Street, Option Care Health soared 32.9% after CD&R and McKesson said they’re buying the provider of infusion services. The two are paying $32.05 for each Option Care Health share, valuing it at roughly $5.8 billion.

CDR is a private investment firm. Shares of McKesson, the healthcare services company, added 1.2%.

They helped offset a drop for Stryker, which fell 2.2% after the medical technologies company said Kevin Lobo will step down as its chief executive at the end of the year. He's held the position since 2012 and will become Stryker's executive chairman. The company said its current chief operating officer, Spencer Stiles, will replace Lobo.

In stock markets abroad, indexes ticked higher in Europe as yields continue to swing in their bond markets amid concerns about high government debts and tight budgets.

In France, tens of thousands of demonstrators marched in support of protests by students demanding more funding for schools.

In Asia, Japan’s Nikkei 225 jumped 1.1%, and Hong Kong’s Hang Seng climbed 1%, but South Korea’s Kospi dropped 0.9%.

AP Business Writers Chan Ho-him and Matt Ott contributed to this report.

An earlier version of this story incorrectly identified Constellation Energy.