Selling genetically engineered designer babies ended with a jail term for a New Zealand woman. TVNZ reporter Phil Vine reports from San Diego.

An empty Starbucks cup in one hand, a picture of her dead baby in the other, Kim waits outside the Federal Courthouse in San Diego.

She is watching out for New Zealander Carla Chambers.

"A horrible lady," says Kim, a red-head mother-of-five barely taller than the camera tripods that have gathered, including CNN, ABC and Fox News.

A team from TVNZ's Sunday programme are also present.

Chambers, 52, from Lower Hutt, has been identified as a major player in an international baby trafficking ring busted by the FBI.

The former nurse befriended young American women on surrogacy messageboards, flying them to an unregulated IVF clinic in the Ukraine, implanting them with designer embryos and then selling the unborn babies in the US to the highest bidder.

They were "blonde, blue-eyed, Caucasian babies", says Los Angeles lawyer Andrew Vorzimer, who alleges Chambers was creating white, designer children, using specially selected sperm and eggs.

"Finding a Caucasian child for adoption here in the United States is very, very difficult. They tried to fill that void."

Heather, one of the other surrogates "duped" by Chambers is less restrained than Kim, whose designer baby was stillborn.

"She's a very evil person."

They thought they were acting as surrogates for specific childless couples. They say they had no idea that Chambers was making designer babies for later sale.

Heather and Kim were the last two baby mules to be flown to Lviv, Ukraine, in this six-year-long operation. Their evidence would help the FBI bring Chambers to justice.

Once the surrogates got back to the US, after the first trimester, the unborn babies would be sold to the highest bidder.

New York socialite Taylor Stein, daughter of rock promoter, Rick Stein, paid $US180,000 ($219,000) for her infant.

"You get caught up in the emotion and you lose perspective," she told ABC news.

The FBI used Stein and the two surrogates in an undercover wiretap to crack the unusual criminal enterprise.

"It kind of crosses over into the realm of Brave New World or a science fiction novel," says FBI special agent Bradlee Godshall, who is here for the final chapter, the sentencing of Chambers and her associate, high-profile lawyer Theresa Erickson.

Erickson, a renowned surrogacy specialist with her own radio and television shows, provided the stamp of authenticity. She would file false documents showing that the unborn babies had been commissioned by fictitious parents.

Erickson brings bodyguards and a family entourage for her entrance to court. Her fall from grace has fascinated the US media. Tall, blonde, dark glasses, downcast head, she is just visible above the melee.

Her lawyer will point out that her husband served his country in the US Marines. She will tell the court that she "lost her way", breaking down in tears, hugging and apologising to the surrogates.

Inside the court, Judge Anthony Battaglia names Chambers as a kingpin.

She was investigated by New Zealand police 12 years ago for inseminating Kiwi women at her home in Avalon with a view to selling the babies to childless couples in the US. She was convicted of fraud and received 200 hours' community service.

Chambers arrives five minutes before proceedings start in a fast-moving party of two. A reporter suggests that some consider her a monster. "Wow, that's tough," says her smiling defence lawyer, Michael Berg. Chambers says nothing.

A quiet apology from Chambers in the dock: "I am actually very sorry for the way this turned out."

Erickson and Chambers were sentenced to five months in jail.

See Phil Vine's full report on Sunday, 7.30 tonight on ONE.

- © Fairfax NZ News