Embattled Maricopa County Assessor Paul Petersen a no-show at his suspension hearing

PHOENIX (3TV/CBS 5) — Embattled Maricopa County Assessor Paul Petersen was a no-show Wednesday for his hearing to appeal his four-month suspension.

“His criminal counsel has asked that he save his testimony for criminal proceedings,” Petersen’s attorney Kory Langhofer told the board. “There’s no reason for him to be here today.”

[WATCH: No decision on Petersen’s suspension made]

John Doran, a lawyer for the board, disagreed.

“At the end of the day, only Mr. Petersen knows what he would have or should have done in terms of his day-to-day routine as the county assessor that he didn’t do because he was too busy preparing legal pleadings and bankruptcy matters or personal injury cases for facilitating abortions. And he’s not here to tell us what he did and didn’t do,” Doran said.

“The fact of the matter is the man was elected. He’s entitled to hold that position until the charges justify suspension or removal from office,” Langhofer said. “There is no evidence in your report or anyone outside report that the man has failed to perform his duties.”

The board sidelined Petersen for 120 days without pay following his arrest on human trafficking and fraud charges. Petersen spent 20 days in federal custody in October following his arrest on allegations that he ran an illegal adoption scheme. Petersen has pleaded not guilty to the charges he faces in Arizona, Arkansas and Utah.

[CONTINUING COVERAGE: Adoption fraud investigation]

The board does not have the legal authority to fire the assessor because it is an elected position so they suspended Petersen for neglect of duty and using county computers to run his adoption business. During the hearing, Petersen’s attorneys argued Petersen carried out the duties of the office even while he was behind bars.

[RELATED: Arizona lawmaker proposes law to expel county officials in wake of Paul Petersen’s arrest]

The board did not decide whether to lift the suspension or keep it in place. A lawyer representing the county said that decision will “come as soon as possible.'”

 

Paul Petersen seeks trial delay in human trafficking case

 

Paul Petersen’s property, bank accounts frozen in $1.5 million seizure warrant

The listing price on Paul Petersen’s Mesa law office was slashed by $24,000 Monday. But there is a snag to a quick deal: The property is embroiled in a criminal case.

The price cut came hours before the Arizona Attorney General’s Office confirmed Petersen’s office was one of several assets listed in a $1.5 million seizure order.

A Maricopa County Superior Court judge gave the green light for authorities to seize Petersen’s office building. The judge also allowed them to seize Petersen’s vehicles, his Mesa home, his family’s vacation home, four properties he owned in Arizona, Utah and Arkansas and to freeze 11 personal and business bank accounts.

Authorities in the seizure warrant allege Petersen made at least $1,459,578 as part of an illegal adoption scheme he operated in three states.

Petersen is the elected Maricopa County assessor and a Mesa attorney specializing in private adoptions. Federal and state authorities say his business was built on human trafficking.

Petersen is facing charges in Arizona, Utah and Arkansas on allegations that he illegally transported pregnant women from the Marshall Islands to the U.S., fraudulently enrolled them for Medicaid and orchestrated adoptions of their children to American families for up to $40,000 each.

He has pleaded not guilty in all three states and has been released on bond.

‘Nobody has been kicked out of their home’

The seizures don’t mean the Petersen family will be out on the street for Thanksgiving. The court order prevents Petersen and his wife, Raquel “Rocky” Petersen, from transferring their assets to other individuals or converting them to cash before trial.

“Nobody has been kicked out of their home,” Attorney General spokesman Ryan Anderson said Tuesday. “This was an attempt by the state to hit pause.”

Anderson said the seizure will help Arizona taxpayers recoup losses if Petersen is found guilty.

The building housing Petersen’s law firm went up for sale Nov. 18, a day before Judge Patricia Starr signed the seizure order. Originally listed for $499,000, the price was cut Nov. 25 to $475,000, according to the online real estate site, Zillow.

The office, at 37 N. Hibbert in downtown Mesa, also housed an agency Petersen co-owned called Bright Star Adoptions and a development company operated by his wife’s family.

Neither Petersen nor his attorney Kurt Altman could be reached for comment Tuesday. Petersen can challenge the seizure in court before his property rights are forfeited.

In Arizona, Petersen and co-defendant Lynwood Jennet are charged with 32 counts involving Medicaid fraud. Jennet served as Petersen’s liaison for the Marshallese women and lived with them in Mesa.

The Arizona Attorney General’s Office alleges Petersen and Jennet fraudulently registered birth mothers living in Arizona for Medicaid so they could use the state health-care program for low-income individuals. Adoption contracts show Petersen attempted to use the Medicaid system in other states as well.

Marshallese citizens are not eligible for Medicaid unless they have lived in the U.S. for five years. But according to state investigators, Petersen and his associates lied about the residency status of birth mothers so they could illegally access the health-care benefits.

An investigation by The Arizona Republic, based on contracts, texts, emails and internal documents, found Petersen treated birth mothers and their children like monetary transactions.

He moved multiple women in and out of homes he owned in Mesa and Utah, took cuts for living expenses out of money he promised birth mothers and made every effort to  enroll them in Medicaid programs.

The Republic found Petersen was connected to at least three other adoption agencies in Arizona and Colorado.

Petersen’s adoption practice was rooted in his 1998 mission to the Marshall Islands for the Church of Jesus Christ of Latter-day Saints. A top church official this month said he was disgusted and sickened by the details of Petersen’s case.

Similar property seizures in Utah

The Arizona seizure warrant follows a similar effort in Utah, where Petersen is charged with 11 counts related to human smuggling. Prosecutors have asked the court to secure homes owned by Petersen in West Valley City where he allegedly housed women from the Marshall islands.

Prosecutors said in court filings the properties can be used to pay restitution if Petersen is convicted.

Anderson said the seizures do not prevent Petersen from mounting a strong defense or from paying for lawyers.

He said the law allows “untainted” property seized in connection with a criminal case to be released in order to pay for legal representation.

“Untainted means the property was not the proceeds of, or was not used to facilitate, the illegal activity,” he said, citing a two-year-old U.S. Supreme Court case.

Suspended from elected office for 4 months

The criminal charges are not Petersen’s only legal fight. He is also challenging the Maricopa County Board of Supervisors, which voted last month to suspend him from his government job for 120 days.

Because Petersen was elected, the board was barred from permanently removing him from office.

Petersen has worked at the Assessor’s Office since 2006. He served as the agency’s public information officer and lobbyist at the same time he operated his law practice.

He was elected assessor in 2014 and again in 2016. His taxpayer-funded salary is about $77,000 per year, but his attendance record is spotty.

County parking records obtained by The Republic show he used a garage reserved for county government workers 53 times from Jan. 1 through Oct. 2, 2019. That’s less than 30% of the available workdays.

On each of those days, he spent an average of four hours in the office.

Arizona Elected Official Arrested for Allegedly Running a Baby Farm

An elected official in Arizona has been indicted for his role in a scheme to recruit pregnant women overseas and sell their babies on the U.S. black market.

Paul Petersen, an adoption lawyer and county assessor in Maricopa County, Ariz. who was arrested on Tuesday, is alleged to have orchestrated an illegal scheme in which dozens of pregnant women from the Marshall Islands were recruited to give birth in the United States, then sell their babies to adoptive couples for as much as $40,000. As many as 70 pregnant Marshallese women may have been involved, according to prosecutors.

Prosecutors allege that Petersen has been running the scheme since as early as 2005, and that his victims number in the dozens. He is being charged with a total of 62 charges in three states, including Arkansas, Utah, and Arizona. The charges include wire fraud, human smuggling, and adoption fraud, among others.

According to court documents from all three states, Petersen started running the adoption ring as early as 2005. Petersen allegedly paid people in the Marshall Islands to find local pregnant women, then offered them $1,000 for every month they were pregnant, in addition to a $10,000 flat rate, to deliver their babies in the United States and give them up for adoption. After arriving in the United States, the women allegedly stayed at a residence owned by Petersen in Mesa, Arizona until they were ready to give birth. According to court documents, the women were subject to poor living conditions, with as many as 15 women sleeping on mattresses on the floor at one time. (In fact, at the time of his arrest on Tuesday night, Arizona police found eight pregnant women living in Petersen’s Mesa home.)

Adoptive couples reportedly paid Petersen anywhere between $26,000 and $41,000, a sum that Petersen said would also help cover the cost of the birth mothers’ medical expenses. All told, Petersen may have netted as much as $2.8 million between 2016 and 2018 for his role in the scheme, according to banking records.

Petersen’s scheme was reportedly uncovered in 2017, when an anonymous individual called in a tip to the FBI. But as early as 2006, a judge had questioned the legality of Petersen’s adoption practices, denying an Arizona couple’s petition to finalize the adoption of a Marshallese child. But that ruling was overturned by then-Arizona Court of Appeals judge Ann Scott Timmer, who ruled that the adoption was in the child’s best interest. Timmer is now an Arizona state Supreme Court Justice.

In a press conference following Petersen’s arrest on Tuesday, Utah Attorney General Sean D. Reyes said that both the birth mothers and the adoptive parents would be treated as victims, and the children whose adoptions had already gone through would stay with their adoptive parents. “We have no interest, none whatsoever, in interfering with any adoption that has already taken place,” said Reyes. “Protecting the victims…is paramount to us.”

An adoptive mother interviewed by Utah investigators claimed she had no idea that Petersen had orchestrated such a wide-ranging scheme, referring to it as a “baby mill.” Another adoptive mother interviewed by Phoenix CBS 5 said she had no idea that Petersen’s scheme was fraudulent, only discovering that was the case after receiving the hospital bills for the birth mother’s delivery, which were dated from before the adoption process had even been set up. “If we knew, we honestly would not have adopted our son,” she said.

 

Maricopa County Assessor Paul Petersen indicted in adoption fraud

Maricopa County Assessor Paul Petersen has been indicted in an adoption fraud scheme, the Arizona Attorney General’s Office confirmed late Tuesday.

The assessor has for years run an adoption law practice in Mesa, which involves bringing women from the Marshall Islands to the U.S. to give birth. Their babies have been placed for adoption with U.S. parents.

Petersen is accused in the indictment of illegally obtaining services from Arizona’s Medicaid system for the women, falsely claiming the women are Arizona residents. Petersen is accused of bilking the state out of more than $800,000, the Arizona Attorney General’s Office said Wednesday.

He also is accused of violating a compact between the U.S. and the Marshall Islands. It prohibits citizens of that country to come to the U.S. if their travel is for the purpose of adoption, unless they have a special visa.

The 32-count indictment alleges conspiracy, theft, forgery and 29 counts of fraudulent schemes.

Petersen was indicted along with another person, Lynwood Jennet. Little information was immediately available about Jennet.

“The scheme in this case fraudulently represented the pregnant women in question were residents of Arizona in order to obtain medical services by the Arizona Health Care Cost Containment System because without residency Arizona Health Care Cost Containment System services cannot be obtained,” the indictment reads.

According to his website, Petersen charges $40,000 per adoption.

The Attorney General’s Office planned a news conference for 11 a.m. Wednesday to discuss the “multi-state investigation, arrest and criminal indictment” involving Petersen.

According to a news release, the Arizona Department of Public Safety, Homeland Security Investigations and the Utah Attorney General’s Office also were involved in the investigation.

Late Tuesday, the Salt Lake Tribune reported that the Utah attorney general charged Petersen with 11 other felonies, including communications fraud, human smuggling and sale of a child.

The Utah attorney general alleged that Petersen recruited more than 40 pregnant women from the Marshall Islands over the past three years and transported them to Utah, where they were paid to give up their children for adoption in the U.S., the Tribune reported.

An investigation by Honolulu Civil Beat last year questioned the legality of the adoptions Petersen administers through his private-sector job as a private adoption attorney.

According to the report, Petersen arranges and pays for pregnant Marshallese women to fly to Utah and live in a four-bedroom house he owns outside of Salt Lake City. He then matches them with adoptive families.

The Compact of Free Associations, a treaty enacted in the early 2000s, prohibits Marshallese women considering an adoption plan for their children from traveling to the U.S. without a special visa.

The treaty was enacted to control black market adoptions from the Marshall Islands. Civil Beat reported that pregnant women, who did not understand the consequences of adoption, were rampantly exploited in the 1990s. Some were told that their children would return when they turned 18.

The travel restrictions were supposed to protect pregnant women. But, according to Civil Beat, some high-dollar adoption attorneys, including Petersen, have found a way around the law. Marshall Islands citizens not planning adoptions do not need visas to travel to the U.S.

A spokesman for the state Attorney General’s Office said the families involved in the adoptions administered by Petersen are not the focus of the Arizona investigation.

Anyone with information or questions related to Marshall Islands adoptions cal call the Attorney General’s Office at 602-542-8888.

About Paul Petersen

Petersen is in his second term as assessor. He won a special election in 2014 to replace Keith Russell in the job and was reelected in 2016.

Before his election, Petersen served nearly eight years in the Assessor’s Office working as the assessor’s representative at the Arizona Legislature and as the agency’s public information officer, according to his biography on the county assessor’s website.

Petersen is an active member of the Maricopa County Republican Party, the Arizona Republican Party, and a precinct committeeman in Legislative District 25, according to the bio.

Petersen said his Mesa-based law practice focuses on “helping people all across the country in their effort to adopt children” and has done so for nearly 15 years.

He is a 2002 graduate of the Sandra Day O’Connor School of Law at Arizona State University.

 

How big was County Assessor Paul Petersen’s adoption operation?

Dozens of birth mothers.

Dozens of adoptive parents.

Dozens of children.

More than 70 pregnant women from the Marshall Islands may have traveled to the United States to give birth in an adoption scheme orchestrated by Maricopa County Assessor Paul Petersen, court documents from three states allege.

The elected official has been indicted in Arizona, Arkansas and Utah in cases that became public Tuesday, accused of running a multimillion-dollar operation that involved adoption fraud.

Prosecutors in the three states allege Petersen committed a range of offenses as an adoption attorney, from wire fraud in Arkansas to human smuggling in Utah to fraudulent schemes in Arizona, 62 charges in all.

Petersen in his private-sector career has been involved in arranging adoptions from the Marshall Islands as early as 2005, although the charges involve actions starting in 2015, according to court records.

It is illegal for Marshallese women to travel to the United States for the purpose of adoption — it’s also how prosecutors claim Petersen made a living.

Utah’s attorney general, Sean Reyes, said victims fall into three categories: the mothers from the Marshall Islands who traveled 5,000 miles to give birth in the U.S.; the adoptive parents who paid Petersen as much as $40,000 to facilitate an adoption; and the children at the center of the complex scheme.

ACCUSED: Petersen illegally brought women to Mesa in adoption scheme, AG says

“The commercialization of children is illegal, and the commoditization of children is simply evil,” Reyes said.

The total number of victims involved is unknown. But the scale of Petersen’s adoption operation has started to emerge with the flurry of court records.

More than 70 pregnant women

Investigators in Utah and Arizona say they tracked dozens of Marshallese women who gave birth in both states, which suggests dozens of families adopted children through Petersen’s firm.

In the scheme, the attorney first paid individuals in the Marshall Islands to locate pregnant women interested in adoption, then matched them with adoptive families in the U.S., according to court records.

Investigators in Arizona found:

• 28 women from the Marshall Islands gave birth in Phoenix-area hospitals between Nov. 30, 2015, and May 30, 2019, according to court documents.
• The women, as they waited as long as six months to deliver their children, lived in a Mesa home owned by Petersen. Eight pregnant women were found at the residence in Mesa on Tuesday night when Arizona Department of Public Safety investigators executed a search warrant.

Investigators in Utah found:

• More than 40 women traveled from the Marshall Islands to Utah to give birth, according to court documents. Petersen, in hospital paperwork, claimed to be the facilitator for the adoptions of their babies.
• Records of plane tickets paid for by a credit card in Petersen’s name were found for 28 of the Marshallese women who gave birth in Utah hospitals and placed their babies for adoption.
• Two adoptive parents told investigators they visited a home owned by Petersen in a suburb of Salt Lake City where the pregnant women lived. They said they saw as many as 15 pregnant women living in the house, some sleeping on mattresses on a bare floor.

One of the adoptive parents interviewed by investigators in Utah who visited the home where the pregnant women lived said they had no idea Petersen was processing adoptions for so many women at a time, comparing the operation to a “baby mill.”

Investigators in Arkansas found:

• Four women, identified by their initials, were brought to the U.S. from the Marshall Islands to give up their babies for adoption in Arkansas.
• Similar to the cases in Arizona and Utah, the U.S. attorney for the Western District of Arkansas said the women were placed in a single-family home and sometimes confined to a room.

Adoptions through Petersen weren’t cheap.

Adoptive parents paid anywhere from $25,000 to $41,000 for Petersen’s adoption services, according to the court records.

Petersen indicated the cost covered medical expenses. However, according to Arizona court documents, the attorney instead falsely claimed the pregnant women were Arizona residents so they could access state-funded medical benefits.

The medical costs for the 28 pregnant women total more than $800,000, according to the court documents.

Meanwhile, investigators in Utah found that Petersen took in millions of dollars in nearly two years from the adoption deals. Between December 2016 and September 2018, bank account records subpoenaed by an investigator show a little more than $2.7 million going into an account Petersen told families was for wire transfers. Most of the transfers, the investigator with the Utah Attorney General’s Office wrote, included notes that indicated they were adoption payments.

Petersen also offered money to the mothers coming from the Marshall Islands, according to the court documents. Arizona court documents state that birth mothers were promised $1,000 for every month they were pregnant in the U.S and up to $10,000 to place their child for adoption.

Four Marshallese women interviewed by the investigator in Utah said they were offered $10,000 for the adoption. They all told the investigator that the money significantly influenced their decision to go through with the adoptions, according to the court documents.

60-plus charges filed against him

Petersen, arrested Tuesday, is now tangled in a legal mess. He will have to contend with three indictments in three states that accuse him of committing dozens of felonies.

The charges follow different themes in every state. In Arizona, accusations focus on illegal use of state medical benefits on women who were not residents. Investigators could not find any of the women still living in Arizona.

In Arkansas, authorities characterized Petersen’s operation as a scheme to defraud and take advantage of Marshallese women and families to make quick money.

And in Utah, charges against Petersen include human smuggling, communication fraud and the sale of a child.

Reyes, the Utah attorney general, said prosecutors do not intend to overturn any completed adoptions as a result of this case.

If Petersen is found guilty of all the federal charges in Arkansas alone, he could be sentenced up to 315 years in prison and be assessed a $5 million fine, Duane Kees, U.S. attorney for the Western District of Arkansas, said during a news conference on Wednesday.

It is unclear how much prison time he would face if convicted in Arizona or Utah.

 

A judge flagged Paul Petersen’s alleged adoption scheme in 2006. It continued for 13 years

Paul Petersen has been facilitating adoptions between Arizona families and women from the Republic of the Marshall Islands since 2005.

His process — which includes arranging for pregnant Marshallese women to fly to the U.S. to deliver their children — violates a treaty with the Marshall Islands that prohibits  Marshallese women from traveling to the U.S. for the purpose of placing their child up for adoption, according to indictments.

According to court records, a judge picked up on Petersen’s scheme 13 years ago and called its legality into question then.

But the practice continued.

2006 adoption nearly canceled

An Arizona couple represented by Petersen attempted to adopt a Marshallese child in 2006, but was met with blowback by a Maricopa County Superior Court judge with concerns about Petersen’s adoption method, according to court records.

Much like in the recent cases outlined by the Arizona Attorney General’s Office, Petersen arranged for a pregnant woman from the Marshall Islands to travel to Mesa to deliver her baby. When the adoptive couple attempted to finalize the adoption of the child about six months later, a judge denied the couple’s petition.

Brian Rees, a Maricopa County Superior Court commissioner in the juvenile division, said Petersen violated the Compact of Free Association, the treaty that prevents Marshallese women from traveling to the U.S. to place their children for adoption.

The Arizona Court of Appeals, in a decision written by Ann Scott Timmer, ultimately reversed Rees’ decision, ruling that it was in the child’s best interest for the Arizona couple to adopt him.

That said, the Court of Appeals wrote in its decision, “we appreciate the juvenile court’s well-expressed concerns about the manner in which this prospective adoption was arranged.”

Rees remains a Superior Court commissioner. Timmer is now an Arizona Supreme Court justice.

It does not appear that the Court of Appeals or any other legal or law enforcement entity scrutinized Peterson’s practices any further — until late last year, when the Arizona Department of Public Safety opened an investigation after receiving a tip.

According to the Arizona attorney general’s investigation, Petersen arranged for 28 Marshallese women to travel to Arizona to give birth between 2015-2019.

It’s unknown how many additional women were involved in previous years.

 

Arizona Official Arrested In Alleged ‘Baby Mill’ Adoption Fraud Scheme

A public official in Arizona has been arrested in connection with charges that he ran a multimillion-dollar scheme in which he smuggled pregnant women from the Marshall Islands to profit from their newborn babies. Authorities say Maricopa County Assessor Paul Petersen’s fraudulent adoption enterprise left a trail of forged documents and violated U.S. and international laws.

Petersen operates an adoption law firm. For years, he has connected American families seeking to adopt with women from the Marshall Islands — but state and federal prosecutors say Petersen falsified documents and lied about the mothers’ residency so he could enrich himself.

Federal prosecutors in Arkansas on Wednesday unsealed a criminal indictment against Petersen and an associate, Maki Takehisa, on smuggling, money laundering and visa fraud charges.

“Many of these mothers described their ordeal as being treated like property,” said Duane Kees, the U.S. attorney for the western district of Arkansas. “Make no mistake: this case is the purest form of human trafficking.”

In Arizona, Petersen has been indicted on theft, fraud and forgery charges for allegedly claiming pregnant women from the Marshall Islands were residents of Arizona in order to obtain medical care for them. He is also accused of violating an international agreement between the U.S. and the Marshall Islands that allows Marshallese residents to travel and take jobs in the U.S. but that bans them from entering the U.S. for the purpose of placing a child for adoption.

Prosecutors say the women were instructed by Petersen to lie to federal officials that they were not traveling for adoptions.

In separate charging documents, Utah prosecutors accuse Petersen of human smuggling for “adoption-related exploitation in the Republic of the Marshall Islands,” claiming Petersen has targeted birth mothers in the Marshall Islands as well as adoptive parents in the United States.

In Utah, prosecutors said Petersen transported more than 40 pregnant women from the Marshall Islands and charged parents in the U.S. tens of thousands of dollars for the adoption of the women’s newborns. Each time, authorities say, he lured the pregnant women to the U.S. with payments of $10,000.

During that same period, $2.7 million related to the alleged smuggling operation flowed into Petersen’s bank account, according to Utah authorities.

The women sometimes came to Utah just days before they were expected to give birth. They stayed in a home owned by Petersen, according to the charging documents. At times, Petersen allegedly housed as many as 15 pregnant women in the same home, leading one tipster to describe Petersen’s business as a “baby mill.”

Parents interviewed by Utah investigators said Petersen and his associates lied or omitted information about the adoptions, including that the pregnant women were paid for the adoptions and that the process was forbidden under international law.

“It is heartbreaking that these families from both countries were so cruelly manipulated,” Utah Attorney General Sean Reyes said in a statement.

Families who adopted children are considered victims in the scheme, according Kees. Parents who adopted children will not be forced to return them.

The Marshall Islands, which gained full independence in 1986, is an island nation of some 53,000 people that was formerly the site of U.S nuclear weapons tests.

Neither Petersen nor his lawyer has replied to requests by NPR for comment.

According to a website for Petersen’s firm, the average cost he charges for completing an adoption from a Marshallese mother is $30,000 to $40,000.

The site touts Petersen’s expertise in arranging adoptions from the Marshall Islands, citing testimonials from people who note his “genuine passion” and praise him for “making a difference in the world.”

The site says Petersen’s firm is uniquely suited to carry out adoptions in the Pacific Island nation.

“Paul is the only attorney involved with the Marshallese community in the United States who is fluent in the Marshallese language. Because of this fact, Paul has been successful in hundreds of Marshallese adoptions across many different states,” according to Petersen’s site. It adds, “Paul lived in the Marshall Islands for two years, and therefore is familiar with their language, customs, and unique cultural perspective on adoption.”

In November, Honolulu Civil Beat published an investigation titled “Black Market Babies” that focused on Petersen’s question-raising practice of flying in pregnant women from the Marshall Islands and connecting their newborn children with American adoptive parents.

The news outlet interviewed women from the Marshall Islands who said they never expected to sever all ties with their children before handing their kids over to parents in the United States. The investigation called Petersen the most active Marshallese-adoption lawyer in America.