The former assessor for Maricopa County has pleaded guilty to multiple charges related to an adoption fraud scheme that spanned three states and a U.S. territory.

Arizona Attorney General Mark Brnovich announced Thursday that Paul Petersen pleaded guilty in Maricopa County Superior Court to running an adoption fraud scheme that involved bringing pregnant women from the Marshall Islands to the U.S. to give birth, bilking Arizona taxpayers out of over $800,000.

The plea agreements only resolve Mr. Petersen’s criminal cases in Arizona.
 
On June 18, Mr. Petersen pleaded guilty to:

• Fraudulent Schemes and Artifices, a Class 2 Felony
• Fraudulent Schemes and Practices, a Class 5 Felony
• Forgery, a Class 4 Felony 
• Fraudulent Schemes and Practices, a Class 5 Felony

“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,” Mr. Brnovich stated. “Mr. Petersen must now answer for his crimes. It doesn’t matter if you’re politically connected, wealthy, or an elected official, the rule of law applies equally to everyone.”
 
As part of the plea agreement with the State of Arizona, Mr. Petersen will pay the following in restitution:

• $650,000 to AHCCCS
• $11,000 to an uncharged victim
• $18,000 to the Arizona Attorney General’s Office for investigative costs

A sentencing hearing for Mr. Petersen has not been scheduled yet. A Maricopa County Superior Court Judge will consider both aggravating and mitigating factors. Mr. Petersen faces between three to 12.5 years in the Arizona Department of Corrections in his first case. He faces between .5 to 4 years in prison for the second case.

Mr. Petersen ran an adoption agency out of Mesa. For more than a decade, Mr. Petersen had been involved in arranging adoptions from the Marshall Islands, according to a release.

In October 2019, a State Grand Jury indicted Mr. Petersen after a multistate investigation. He charged adoptive families on average $35,000 per adoption and claimed the money could be used for various expenses like legal, medical, and living.

However, Mr. Petersen directed his co-conspirator, Lynwood Jennet, and the birth mothers to provide false information about their residency status to obtain medical services from the Arizona Health Care Cost Containment System, the state’s Medicaid system. The birth mothers should not have qualified for AHCCCS benefits because they were not Arizona residents, the release states. Between November 2015 and May 2019, AHCCCS paid for at least 29 births.

Second Criminal Investigation

Following the October 2019 indictment, the Arizona Attorney General’s Office opened a second criminal investigation against Mr. Petersen. Mr. Petersen had provided false information regarding birth mothers’ fees to prospective adoptive parents and to the Maricopa County Superior Court Juvenile Division, according to officials. Mr. Petersen would often include fraudulent or false information on court paperwork to ensure adoptions were approved. Additionally, he would inflate the duration of time he paid for a birth mother’s living expenses to the adoptive family. For example, one family paid Mr. Petersen $33,000 for an adoption. According to an affidavit, $11,000 was for living expenses that Mr. Petersen had paid for the birth mother to live in Arizona for five months. In reality, the birth mother arrived in Arizona one day prior to giving birth and only stayed for an additional 14 days.

Co-Defendant Lynwood Jennet

In December 2019, Lynwood Jennet pleaded guilty for her involvement in the adoption fraud scheme. As part of her plea agreement, Ms. Jennet agreed to testify against Mr. Petersen. Ms. Jennet faces between two and four years in the Arizona Department of Corrections.
 
A sentencing hearing for Ms. Jennet is scheduled 11 a.m. Aug. 21.

Assistant Attorneys General Evan Malady and Scott Blake are prosecuting both cases.