By Chris Caraveo
Twitter: @ChrisCaraveo31

The Maricopa County assessor has been indicted in an adoption fraud case that has cost the State of Arizona over $800,000, according to the state’s attorney general and court documents.

Maricopa County Assessor Paul D. Petersen is facing charges of fraudulent schemes/artifices, theft, fraudulent schemes/practice, forgery and conspiracy. The allegations include arranging the travel of pregnant mothers from the Marshall Islands to Arizona for the purposes of giving birth and putting up their babies for adoption.

In an email to Daily Independent, Alejandra Larios, employee services director with the Maricopa County Assessor’s Office, said there is no disruption in service to the property owners of Maricopa County.

“The leadership team will continue to facilitate the day-to-day operations to ensure the highest level of customer service,” Ms. Larios stated in the email. “As of this moment, Mr. Petersen is still the Assessor.”

However, the Maricopa County Board of Supervisors on Thursday called for Mr. Petersen to resign due to the serious nature of the allegations.

“Petersen’s prompt resignation will ensure his legal issues don’t distract him from leading the County Assessor’s Office,” according to a statement from the county. “The Board will continue to provide the necessary resources and leadership to the Assessor’s Office so the team can remain focused on providing excellent customer service to the residents of Maricopa County.”

Arizona Attorney General Mark Brnovich has said families involved in adopting Marshallese babies are not the focus of the investigation and likely won’t have their children taken away. Anyone with information or questions pertaining to adoptions involving children from the Marshall Islands can call the Arizona Attorney General’s Office at 602-542-8888.

At a news conference Wednesday morning, Mr. Brnovich said taxpayers have basically been paying for the babies to be delivered, and that the alleged actions by Mr. Petersen are unfair to the adoptive parents and hard-working Arizona taxpayers.

Utah also charged Mr. Petersen with 11 felony counts, including human smuggling, sale of a child and communications fraud.

The Utah Attorney General’s Office said more than 40 pregnant women were transported to Utah during the past three years as part of the scheme.

“While Mr. Petersen is entitled to a presumption of innocence, our investigation uncovered evidence that he has committed horrible crimes,” Utah Attorney General Sean D. Reyes said in a statement. “Petersen’s illegal adoption scheme exploited highly vulnerable groups in two countries — the birth mothers and families in the Marshall Islands and the adoptive parents here in Utah.”

Mr. Petersen illegally obtained services from Arizona’s Medicaid system for the women by falsely claiming they are Arizona residents, the indictment said. He also violated U.S. law prohibiting citizens of the Marshall Islands from traveling to the U.S. for adoption, according to the indictment filed in Maricopa County Superior Court.

The investigation

The Arizona Department of Public Safety began looking into the allegations in December 2018, when detectives received information regarding suspicious activity involving an Arizona adoption attorney conducting adoptions with babies from the Republic of the Marshall Islands, court documents state. That attorney was identified as Paul D. Petersen.

A “source of information” had contacted Mr. Petersen and inquired about adopting after being referred by a third party. The SOI later told DPS he believed the practices outlined by Mr. Petersen were suspicious.

DPS learned Mr. Petersen had been involved in adoptions of Marshallese babies since at least 2005.

In 1983, the U.S. and the Marshall Islands entered into an international agreement that allows RMI citizens to live and work in the U.S. without a visa. However, if a person is coming to the U.S. for the purpose of an adoption transaction, they are not eligible for admission under the agreement. As a result, adoption of Marshallese babies born to Marshallese mothers must go through the Central Adoption Authority, which is an entity of the RMI.

Between November 2015 and May 2019, investigators identified 28 women from the RMI who have given birth to 29 babies in the Phoenix area and then gave up the children for adoption through Mr. Petersen, records state.

Documents detail allegations

The pattern for each birth was similar: Mr. Petersen, with help from several people in the RMI and U.S. who are on his payroll, found and matched birth mothers with adoptive families. Mr. Petersen then charged the adoptive family about $35,000 per adoption. However, according to his website, Mr. Petersen charged $40,000 per adoption.

Mr. Petersen reportedly indicated the fee included medical costs, but authorities learned the delivery costs were covered by the Arizona Health Care Cost Containment System.

Mr. Petersen allegedly sent money to the RMI for the women to buy passports, then had them flown to Phoenix and stay for the duration of their pregnancies — some as long as six months. The women were reportedly housed in a home owned by Mr. Petersen.

When a woman was ready to give birth, she was assisted in applying for AHCCCS benefits, even though she was not a resident of the state.

After giving birth, a woman was flown or driven from Arizona back to the RMI or to other states. Arkansas is the most common one, records state.

Records state the flight patterns for all 28 women were similar: fly to Arizona, give birth and fly out shortly after giving birth. Authorities believe the women did this because they were paid $1,000 per month by Mr. Petersen while they were pregnant in the U.S. They also had travel, food, cell phones and other services paid for, records state.

Investigators learned some birth mothers had been promised up to $10,000 by Mr. Petersen or his associates to place their baby up for adoption. Records state Mr. Petersen employs Marshallese women in Arizona, Utah and Arkansas whose roles include translation for birth mothers, care of the birth mothers, helping them apply for AHCCCS benefits, transporting birth mothers to and from appointments, and notarizing legal documents pertaining to the adoptions.

Petersen, Jennet arrested Tuesday

At Wednesday’s presser, DPS Col. Frank Milstead said they conducted a number of search warrants Tuesday night and found eight more pregnant Marshallese women at one of the residences.

It is unknown where they have been relocated.

Mr. Milstead said there is no reason to detain or charge any of the mothers, saying they’re not believed to have committed any crimes and are in the U.S. legally.

Mr. Petersen was arrested in Gila Bend, according to records.

Records state Lynwood Jennet, 45, of Mesa, was the point of contact for all the birth mothers. She was also arrested Tuesday and faces charges similar to Mr. Petersen.

Records state Ms. Jennet authored affidavits to the Arizona Department of Economic Security, stating the birth mothers live with her.

However, AHCCCS investigators determined each mother was not an Arizona resident based on their flight patterns and not having intentions to remain in Arizona after giving birth.

Most of the adoptions occurred out of state, Mr. Brnovich said.

Investigators estimate the current loss to the State of Arizona for the 28 identified mothers to exceed $800,000.

Mr. Petersen was jailed in lieu of a $500,000 cash-only bond. Ms. Jennet was jailed in lieu of a $250,000 cash-only bond.

Mr. Petersen is in his second term as assessor following a special election victory in 2014 and re-election in 2016. He served nearly eight years as the assessor’s office representative to the Arizona Legislature and as the agency’s public information officer.

An investigation last year by the Hawaii news website Honolulu Civil Beat questioned the legality of adoptions Mr. Petersen administers through his work as a private adoption attorney.

The indictment is the result of a multi-state investigation conducted by the Arizona Department of Public Safety, Homeland Security Investigations, the Utah Attorney General’s Office, the Arkansas US Attorney’s Office, and the Arizona Health Care Cost Containment System Office of Inspector General.

Mr. Petersen’s attorney, Matthew Long, defended his client’s actions during a Tuesday court hearing in Phoenix as “proper business practices” and said they disagreed with the allegations.

Mr. Long also disputed the cash bond of $500,000, saying his client had strong ties to his hometown of Mesa, Arizona, and was not a flight risk, despite authorities saying Mr. Petersen has strong ties to the Marshall Islands. Mr. Long said Mr. Petersen has known for weeks that he’s been under investigation.

In Arizona, Assistant Attorney General Scott Blake said Mr. Petersen had previously been told his practice was illegal but he continued anyway.

The Daily Independent reached out to the Arizona Attorney General’s Office and the Maricopa County Board of Supervisors on how the allegations may affect Mr. Petersen’s role as County Assessor.

“The Board wants to make sure they have a full understanding of that as well and will seek legal advice in this matter,” a spokesman for the Board of Supervisors stated.

In a joint statement, Maricopa County Treasurer Royce Flora and Maricopa County Recorder Adrian Fontes called the accusations against Mr. Petersen “troubling at the least.”

“While he deserves his right to due process and the legal presumption of innocence, the county’s taxpayers deserve officers who can prioritize their work on behalf of all residents of Maricopa County,” the statement reads. "Without commenting on Mr. Petersen’s guilt or innocence, we believe that, under the circumstances, he should resign. His remaining in office pending these serious legal questions would detract too much from the work that the county must do on behalf of the taxpayers.”

Mr. Petersen leads an agency that determines the taxable value for more than 1.7 million properties in the nation’s fourth most populous county.

According to authorities, Mr. Petersen faces up to $5 million in fines and/or up to 315 years in jail.

The Associated Press contributed to this report.