Arizona official who ran fraud scheme for adoption sentenced to six years in prison

A former Arizona county assessor who pleaded guilty to running an adoption fraud scheme has been sentenced to six years in federal prison, according to prosecutors.

Paul Petersen was also ordered to serve three years of supervised release and must pay a fine and court costs totaling $105,100, the US Attorney’s Office for the Western District of Arkansas said in a statement Tuesday.

Petersen, 45, pleaded guilty in June to state and federal charges of running an adoption fraud scheme that involved bringing pregnant women from the Marshall Islands to the United States to give birth. Petersen was an adoption lawyer licensed in Utah and Arizona, and an elected assessor for Maricopa County.

Petersen exploited a legal loophole and used it to run an international adoption business outside of United States and the Republic of the Marshall Islands’ oversight, federal prosecutors said.

As part of a plea agreement, Petersen pleaded guilty in Arkansas to one federal charge of conspiracy to smuggle illegal aliens for financial gain.

He pleaded guilty in Arizona to three state charges of fraudulent schemes and one count of forgery, all felonies in Arizona. In Utah, Petersen pleaded guilty to three state counts of human smuggling and one count of communications fraud.

He faces sentencing in January on the Utah and Arizona charges. In Utah, Petersen faces up to 15 years in prison while he faces up to 16.5 years for the Arizona charges and must forfeit his law license, officials said. Petersen has been disbarred in Arizona, according to the State Bar of Arizona.

Petersen operated the international adoption scheme in Arizona, Arkansas and Utah, according to the Utah attorney general’s office. He was accused of running an enterprise to transport pregnant women from the Marshall Islands to the state for adoptions. The women came from the islands in the central Pacific and were housed in residences he allegedly owned or leased.

He transported or secured transportation for more than 40 pregnant Marshallese women to Utah between August 2016 and August 2019, federal prosecutors said.

He resigned from his Maricopa County assessor’s job and was arrested in October 2019.

Petersen’s attorney, Kurt Altman, told CNN affiliate KTVK that his client did not coerce the birth mothers and said they voluntarily participated in the adoptions.

KTVK reported that Petersen acknowledged in a letter to US District Judge Timothy Brooks that he had violated the law and was prepared to pay his debt to society.

“Unfortunately, I crossed that line and must accept the consequences of my actions,” Petersen wrote, apologizing to any mother whom he treated poorly.

Arizona Attorney General Mark Brnovich said in a statement that Petersen allegedly falsified information to place the Marshallese women on state-funded health care to cover delivery costs. The scheme defrauded the state out of more than $814,000, according to Brnovich.

As part of the plea agreement with Arizona, Petersen will pay $650,000 to the Arizona’s Medicaid agency. He’ll also pay $11,000 to an uncharged victim and $18,000 to the Arizona Attorney General’s Office for investigative costs, Brnovich said.

In December 2019, his co-defendant Lynwood Jennet pleaded guilty over her involvement in the adoption fraud scheme. As part of her plea agreement, Jennet agreed to testify against Petersen, Brnovich’s office said.

After the adoptions, the women either moved to Arkansas or returned to the Marshall Islands. Petersen and Jennet were accused of directing the mothers to fraudulently misrepresent their residency status to obtain health care benefits.

Authorities in Arizona and Utah said they have no interest in interfering with adoptions that have already taken place. “They are not under investigation, and their adoptions are not in danger if they are complete,” said Richard Piatt, a spokesman for the Utah attorney general.

Jennet faces a prison sentence of up to four years and is scheduled to be sentenced in January, according to court records.