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Ex-politician pleads guilty to fraud in adoption scheme

Former missionary to Marshall Islands accused in illegal adoption scheme in Utah, Arizona, Arkansas

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Paul Petersen looks on following an initial court appearance in Salt Lake City on Nov. 15, 2019. Petersen, a former elected official in metro Phoenix accused of running an illegal adoption scheme in three states involving women from the Marshall Islands, pleaded guilty on Thursday, June 18, 2020, to fraud charges. He faces a maximum of 17 years in prison for his guilty pleas on Arizona charges of fraudulent schemes and forgery.

Rick Bowmer, Associated Press

PHOENIX — A former elected official in metro Phoenix accused of running an illegal adoption scheme in Utah, Arizona and Arkansas involving women from the Marshall Islands pleaded guilty Thursday to fraud charges for submitting false applications to Arizona’s Medicaid system for the mothers to receive state-funded health coverage.

Paul Petersen, a Republican who served as Maricopa County’s assessor for six years until his resignation in January, faces a maximum of nearly 17 years in prison for his guilty pleas on Arizona charges of fraudulent schemes and forgery. He also agreed to pay $650,000 to the state’s Medicaid system.

He still faces human smuggling charges in Utah and Arkansas as part of the alleged scheme. His attorney, Kurt Altman, said Petersen is scheduled to enter guilty pleas on Friday in Utah and next week in Arkansas.

Petersen is charged in Utah with four counts of human smuggling, three counts each of sale of a child and communications fraud, and one count of pattern of unlawful activity. He scheduled to be in 3rd District Court at 11 a.m. Friday.

An adoption lawyer licensed to practice in Utah, Arizona and Arkansas, Petersen is expected to plead guilty to four of the felony charges as part of a plea agreement, according to the Utah Attorney General’s Office. The office will hold a news conference at 1 p.m. Friday to provide details about the agreement.

On behalf of Petersen, Altman acknowledged that his client and another person collaborated on getting state-funded health care for adoptive mothers, even though Petersen knew the women didn’t live in Arizona. 

Asked by the judge whether Altman’s summary was correct, Petersen answered, “It’s true.”

He is accused of illegally paying women from the Pacific island nation to come to the United States to place their babies in at least 70 adoption cases in Arizona, Utah and Arkansas over three years. Citizens of the Marshall Islands have been prohibited from traveling to the U.S. for adoption purposes since 2003.

Authorities say the women who went to Utah to give birth received little or no prenatal care. They also said Petersen and his associates took passports from the pregnant women while they were in the U.S. to assert more control over them.

Previously, Petersen had proclaimed his innocence. His attorneys have said Petersen ran a legal adoption practice and has been vilified before his side of the story comes out.

“While Paul Petersen enjoyed a position of respect and trust in the community, he manipulated adoptive families and bilked Arizona taxpayers for his own profit,” Arizona Attorney General Mark Brnovich said in a statement.

Petersen completed a proselytizing mission for The Church of Jesus Christ of Latter-day Saints in the Marshall Islands, a collection of atolls and islands in the eastern Pacific.

Lynwood Jennet, who was accused of helping Petersen in the scheme, pleaded guilty late last year in Arizona to helping arrange state-funded health coverage for the expectant mothers, even though the women didn’t live in the state. She agreed to testify against Petersen.

Authorities say Jennet, who is scheduled to be sentenced on Aug. 21, assisted the birth mothers in applying for the health benefits at the direction of Petersen.

Officials have said 28 Marshallese women gave birth in the Phoenix area as part of the scheme, costing Arizona more than $800,000 in health care expenses, and that their children were put up for adoption through Petersen. 

After Petersen was indicted in October in Arizona, the state opened a second investigation of him that centered on false paperwork that he submitted in adoption cases. 

Altman said Petersen provided documents to adoptive families that contained false information incurred by a birth mother and provided records to a county juvenile court that contained false information about expenses.

No sentencing date has been set for Petersen in Arizona.