Paul Petersen sentenced to additional 5 years on AZ charges connected to adoption scheme

Paul Petersen was sentenced Friday to five years in an Arizona prison on fraud and forgery charges related to his illegal adoption scheme.

The former Maricopa County assessor will serve that sentence on top of a 74-month federal prison term that began in January, meaning he will be incarcerated for at least 11 years before he is eligible for release.

A judge in Maricopa County Superior Court gave Petersen 10.5 years on four separate charges, but he ordered all but five years to run concurrently with the other sentences.

Santa Cruz Superior Court Judge Thomas Fink, who presided over the case, said Petersen engaged in separate crimes to deceive the court about adoptions, to steal taxpayer money and to subvert the legal process as part of his adoption scheme.

Petersen admitted to fraudulently enrolling birth mothers in Arizona's Medicaid system and cheating the state out of $800,000 as part of his adoption business. He also admitted forging documents to boost the fees he charged adoptive parents.

In addition to the Arizona charges, Petersen pleaded guilty last year to a federal human smuggling charge in Arkansas and human trafficking charges in Utah.

During the hearing, which was streamed live from the courtroom because of COVID-19 restrictions, Petersen said he had learned his lesson.

"I promise to this court now, I'm never going to grace the halls of a court again," he said.

Fink rejected arguments by Petersen's lawyers that the four charges should be considered as part of the same crime. He said smuggling women from the Republic of the Marshall Islands to give birth in the United States was distinct from defrauding Arizona taxpayers and lying to the court.

Fink said Petersen did all of it to put money in his own pocket.

The judge hammered Petersen for making false representations in order to get adoptions certified, which enabled him to get more money from adoptive parents. He said juvenile court judges relied on Petersen's experience and testimony as an attorney to render decisions.

"I cannot think of a more important decision that a judge has to make than when a judge certifies an adoption," Fink said. "A judge is deciding to change the parental rights ... a judge is deciding that someone else is going to be the parents of a newly born child."

Fink seemed unmoved by Petersen's repayment of $700,000 to the state for the fraudulent Medicaid charges.

"The state of Arizona, the taxpayers of the state of Arizona, the state Legislature and the governor did not authorize $800,000 in taxpayer's funds to be paid for women to be brought over 5,000 miles away from the Marshall Islands."

Fink could have sentenced Petersen to 16.5 years in Arizona in addition to the federal charge, which he began serving on Jan. 21 in a prison near El Paso.

But Petersen's case isn't over. He still faces sentencing on the Utah charges, where he could get an additional 15 years. His sentencing, originally set for March 22, was postponed and has not been rescheduled.

He also is challenging his federal sentence. In February, he asked a federal appeals court to cut his sentence in half, calling it unreasonable.

Tears, apologies from Petersen

Petersen appeared before the judge in an orange jumpsuit with a scruffy beard. With his hands cuffed in front of him, Petersen wiped away tears as he addressed the court. He said he takes responsibility for his crimes and apologized for hurting families.

He spoke without notes about how the case forced him to reevaluate his relationship with his ex-wife, who divorced him after his arrest and spoke on his behalf Friday. Petersen said while he was awaiting sentences, he connected with his children in a way he never had.

He distinguished between being a father and becoming a dad; golfing with his son, grocery shopping with his oldest daughter and making his youngest daughter's toast just right.

"The long and short of all this now is that by becoming their dad and getting closer to them I'm missing out, and that is my own fault," he said.

Petersen pleaded with prosecutors and the court to go easy on his Arizona co-defendant, Lynwood Jennet, who pleaded guilty to fraud, conspiracy and theft charges for her part in the adoption scheme.

Jennet, 47, worked for Petersen for six years and served as his link to the Marshallese birth mothers. Women living in the Marshall Islands would connect with Jennet if they wanted to place their babies for adoption in the U.S.

Jennet acted as a translator for the women. She was their driver and medical contact, according to court documents. She also lived with them during their pregnancies.

"She's not just my co-worker, she's my friend," Petersen said. "All she did was what I asked her to do in my business."

Petersen said he was ashamed that he could have jeopardized families who trusted him to facilitate their adoptions.

"My biggest regret is that my actions put a cloud on anyone's adoption," he said.

Adoptive parents say they were betrayed

Two adoptive mothers told the court that Petersen betrayed and used them.

As the women told their stories over the internet connection, some of Petersen's supporters were seen on the court feed mocking them by rolling their eyes or getting close to their cameras and mouthing the word "lies."

One woman silently said "no" as one of the birth mothers talked. She later held up a handwritten sign: "Love you Paul."

The birth mothers gave no indication they saw.

Andrea Callicutt said she and her husband dreamed of having an "open adoption" and intended for their newborn daughter to embrace her Marshallese heritage. She said Petersen knowingly "endangered and tainted" their plans.

"While we may have suffered some financial loss, the most difficult aspect is the damage this has done to us emotionally."

Callicutt said Petersen assured them their adoption was legal. It wasn't. She said now she is afraid to publicly talk about her daughter's adoption, and she is afraid what will happen when their daughter discovers the truth.

"This will always hang like a shadow over us and our daughter," she said.

Lisa Elzey described how the baby Petersen arranged for them to adopt died shortly after birth. She said Petersen never expressed grief or remorse and never once came to see them or the birth mom.

"The birth mom wasn't even told he passed away," Elzey said. "We now have to go visit a grave."

Prosecutors sought maximum sentence

Prosecutors with the Arizona Attorney General's Office asked the judge to give Petersen the stiffest penalty possible. They said he took advantage of vulnerable people — birth mothers and adoptive parents — for profit.

This wasn't a one-time situation, they said in court; he did it over and over for a number of years.

Phoenix lawyer Kurt Altman, who represented Petersen, asked Fink for leniency. He said stacking on additional time to Petersen's federal sentence would not serve the interests of justice.

"He stands before this court, frankly, a broken man," Altman said before the sentence was handed down.

Altman did not raise the points he made in a March 10 motion filed with the court. In it, he said Fink should dismiss arguments by state prosecutors tying the fraud to the adoptions, which he described as "irrelevant" to sentencing. The "actual legality" of the adoptions is unrelated to the fraud, he said.

Fink wasn't swayed. He first announced Petersen's sentence would run consecutively with the federal sentence and gave Petersen five years on the first fraud charge. He then sentenced Petersen to 1.5 years, 2.5 years and 1.5 years on the remaining three charges and ordered those run concurrently.

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A pipeline of women and babies

Petersen was arrested in October 2019. Federal and state authorities said he created a pipeline to bring women to the U.S. from the Marshall Islands, arranged for them to give birth in local hospitals and set up adoptions of their babies to American families for up to $40,000 each.

Authorities said Petersen and his associates convinced as many as 70 women to give up their babies.

Virtually all of the adoptions Petersen arranged through his Mesa law office were with birth mothers from the Marshall Islands.

Citizens of the Marshall Islands, which is located near the equator in the Pacific Ocean between Hawaii and the Philippines, can travel to the U.S. freely under the Compact of Free Association between the two countries.

In 2003, the compact was amended to forbid women from traveling for adoption purposes.

Petersen resigned as county assessor in 2020 to focus on his criminal defense. He was first elected in 2014 and again in 2016. His taxpayer-funded salary was about $77,000 per year.

But Petersen's biggest money-making operation was his private adoption business.

Contracts, texts, emails and internal documents obtained by The Arizona Republic showed Petersen treated the birth mothers and their children like monetary transactions.

He moved multiple women in and out of homes he owned in Mesa, outside Salt Lake City and Springdale, Arkansas; took cuts for living expenses out of money he promised birth mothers; and made them live in cramped, squalid conditions.

A Republic investigation in April found 20 of the Marshallese women gave birth at Banner Gateway Medical Center in Mesa.

The women were admitted to the hospital within weeks of arriving in the U.S. Most did not speak English. They listed the same addresses on Medicaid forms. Yet Banner officials continued filing Medicaid paperwork for the women and submitting reimbursement claims to the state, records show.

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 said he was disgusted and sickened by the details of Petersen's case.

Petersen's parents maintain online that he was forced to take a guilty plea. They have established a website to help raise funds for his defense.

The website contends Petersen spent "20 years doing good" and "facilitated the legally approved adoptions of five hundred children into homes with parents who wanted them."

Robert Anglen investigates consumer issues for The Republic. If you're the victim of fraud, waste or abuse, reach him at robert.anglen@arizonarepublic.com or 602-444-8694. Follow him on Twitter @robertanglen.

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