(CNN) He was handsome and healthy, with several degrees and a genius-level IQ. On paper, Donor 9623 embodied the best genetics had to offer. At least 36 children were born using his donated sperm.

According to a lawsuit filed by three families, it took almost 14 years before the donor's true identity was revealed: A schizophrenic college dropout with a felony conviction.

Families that used his sperm are suing the Georgia-based sperm bank Xytex Cryo International, saying it should have done a better job of vetting its sperm donors.

Donor 9623, 'one of the best'

Angela Collins and Elizabeth Hanson, who live in Port Hope, Canada, began researching sperm donors in 2006. After learning only three sperm banks were approved by Health Canada, the federal agency overseeing health care, the couple chose Xytex.

In the civil lawsuit filed in Ontario, Collins says she called the company and asked specifically how well donors were vetted. She says she was told the vetting is so thorough she would ultimately know more about her Xytex sperm donor than she could ever find out about a potential donor she met in everyday life.

After poring through the donor profiles, Collins and Hanson settled on Donor 9623, based on his Xytex profile: an IQ of 160, multiple degrees in neuroscience and a clean health history.

The couple says Xytex employees told them this donor was among their best and his sperm was in such high demand that it was rarely available.

Collins gave birth to a son in 2007.

Foundation allegedly based on lies

Seven years later, the couple learned the donor's name after Xytex breached its own confidentially rules. In several emails to recipient families, the company mistakenly disclosed the donor's identity.

Curious about the man whose DNA ran through their children, the families looked him up.

Their research left them in shock. All it took was a quick Google search, they said, something they allege Xytex never did.

The donor was a convicted felon and college dropout who was diagnosed as having schizophrenia in 2002, the lawsuit alleges.

Frightened by what they found, the families began researching the genetic risk for schizophrenia. Recent research has shown that interacting gene clusters can create between a 70% and 100% risk of developing the disorder.

The families allege they shared their discovery with the sperm bank, but the donor remained on its database.

Sperm donor regulatory requirements

Last year, a Georgia judge dismissed a case Collins filed against Xytex, but he acknowledged the laws are outdated when it comes to alternative reproductive issues.

The Food and Drug Administration has created minimum requirements for sperm and egg donation.

Those regulations require testing for sexually transmitted diseases, HIV, hepatitis B and C and a few other conditions. Current FDA guidelines also recommend that sperm be quarantined for at least six months before it is used.

In its 2012 recommendations , the American Society for Reproductive Medicine expands the types of diseases and behaviors that should be screened in potential donors.

Psychological testing gets one paragraph: "Psychological evaluation and counseling by a qualified mental health professional is strongly recommended for all sperm donors. The assessment should include a clinical interview, and where appropriate, psychological testing."

Later, the recommendations suggest that "genetic screening for heritable diseases should be performed in potential sperm donors." However, no such test exists to identify schizophrenia.

And those recommendations are not reflected in the society's online patient guide.

The guide does recommend sperm donors have a psychological evaluation and counseling by a mental health professional.

"The assessment should seek any psychological risks and evaluate for financial and emotional coercion," it says. "The donor should discuss his feelings regarding disclosure of his identity and plans for future contact. Psychological testing may be performed, if warranted."

Lawsuit claims negligence

Last week, attorney James Fireman filed a civil lawsuit on behalf of three families, including Collins and Hanson, in the Ontario Superior Court against Xytex and its subsidiaries, asking for $15 million in damages.

The lawsuit claims the donor lied on his application, and the sperm bank did not vet him thoroughly.

"The fundamental core of this case is the fact that each of these families have children exposed to a much higher risk of serious and psychological disorders. There are prevention protocols that obviously cost money," Fireman said.

Join the conversation See the latest news and share your comments with CNN Health on Facebook and Twitter.

"We are asking for monetary damages to set up a fund for the childrens' future medical costs."

In a statement to CNN, Xytex said through a lawyer that it complies "with all industry standards in how they safely and carefully help provide the gift of children to families who are otherwise unable to have them without this assistance."

CNN left phone messages and emailed the person believed to be the sperm donor. They were not returned.