This is a terrible story and a reminder of the sometimes-dangerous world of publishing. There are many reputable self-publishing companies, but there are also unfortunately some scammers. That is why it is SO important to research thoroughly before signing -- or paying -- anything.
If you are looking into self-publishing, I have been thrilled with my experience publishing with iUniverse and would highly recommend them. iUniverse treats each author as a valued individual and publishing consultants work with you to make your book the best it can be.
Finally, a reminder: if an agent *ever* charges you money to read your work, turn around and run!