Preying on Parents

Update: This report, originally produced in October 2005, spurred California lawmakers to take action, and in September 2006, Governor Arnold Schwarzenegger signed legislation aimed at curbing adoption fraud.

Four years ago Mary Perdue was contemplating her family's future. Perdue was 51, divorced and a machine operator in a factory in Cedar Rapids, Iowa. Perdue had raised two daughters but the idea of having a son had always intrigued her. She considered foster care. But why bring a child into your home, she asked herself, if you were just going to show him the door one day? Then Mary and her daughters discovered international adoption. Expensive, yes. Risky, perhaps. But the child would be part of the Perdue family forever.

So like thousands of other Americans, Mary Perdue and her daughters started trolling Web sites devoted to finding homes in America for overseas orphans. The Perdues looked at photos of hundreds of orphans. And then they saw Victor, a seven-year-old boy living in an orphanage in Russia.

"He just struck me," Perdue says as she recalls seeing Victor's photo for the first time. "The real thick head of hair, dimples. A smiley happy little boy."

Kim Perdue, Mary's younger daughter, saw a future brother in Victor's blurry digital image.

"He looked like a friend of mine," says Kim. "The write-up said he was very bright and cheerful, eager to have a family. You fall in love with the picture, and that's how they get you."

In Lititz, Pennsylvania, PJ Whiskeyman and her husband, Mike Bard, also took to the Internet. Whiskeyman is a 46-year-old writer who already had six children. She was casually browsing international adoption Web sites when she came across photos and brief descriptions of two girls, Vika, 9 and Karolina, 11. "The blurb and pictures just tugged at our hearts," says Whiskeyman. The Web site listed the girls as orphans in Ukraine and said they were available for adoption.

The images of the orphans nagged at both families: It was as if they could see the children in their homes and hear their voices. Eventually, the Internet listings led Mary Perdue and PJ Whiskeyman to the same California-based adoption company, Yunona USA.

"And when I called Yunona about these girls, the first thing they told me the day I called them in November was, 'Well, some other parents have expressed interest in those girls and you'd better send your down payment immediately because the first one to get their money in, we'll hold the children for them,'" says Whiskeyman. "And I remember I called Mike and we scrambled together to wire them the first down payment of $7,500 to hold these girls."

Both families signed contracts and placed deposits without ever meeting a Yunona representative and with only scant information about the children they wanted to bring into their lives. That's not unusual today in the world of international adoption. As the number of overseas adoptions has exploded, so too has the number of companies battling for business in cyberspace. It's a market worth hundreds of millions of dollars each year. And while adoptive parents face a blizzard of red tape, groups that help arrange those adoptions face little government scrutiny.

"We like to say that your neighborhood health club is probably more heavily regulated than anybody who's doing adoptions in the United States," says Trish Maskew, president of Ethica, a group that lobbies for better rules governing adoption.

Maskew says most adoptions are set up by reputable companies and work out well. But there have also been scandals involving child trafficking and Internet scams that prey on prospective parents.

That's something that worried PJ Whiskeyman and her husband when they traveled to Ukraine. The couple was expecting to return to Pennsylvania with two new daughters. But instead they could never locate Vika. And they were shocked to learn that Karolina had a 14 year-old brother and could not be adopted without him. The couple refused to consider other children suggested by Yunona and returned home empty-handed.

"We got suckered," says Whiskeyman. "We would never have gone if not for the picture and the promise."

Many large adoption agencies no longer post orphans' photos on the Internet. But Yunona still does. The company maintains more than 20 Web sites with flashy graphics, mood music and pages and pages of photos of children. Company president Ivan Jerdev defends the practice, saying photo listings are necessary to link up prospective parents and orphans.

"That's a very good instrument to find parents," says Jerdev. "Because parents want to see the child. They want to have information."

But are the children really available for adoption, or are they advertisements as some critics contend? Jerdev insists the children on his photo listings can be adopted. "They're available when the family signs the contract," he says. But there's a big catch.

"It very clearly states in our contract that we can't guarantee that the child will be available for your family when you are there (overseas)."

In other words, Jerdev claims a particular child is available when prospective parents sign a contract. But that might not be the case months later when the parents go to bring the child home. So if photo listings are so unreliable, why doesn't Yunona stop using them? In a word, business.

"I would lose 80 percent of my clients," says Jerdev. "But in this way they will go to another agency with photo listings and they will have exactly the same problems."

Business is especially important to Jerdev since Yunona USA is a for-profit company. Though he runs an affiliated non-profit fund to raise money for orphanages, all families sign contracts with Yunona USA. And making money is something Yunona's founder doesn't hide.

"It (Yunona) happened not because of charity purposes, but to tell you the truth, because I had to pay bills," Jerdev says.

Jerdev says Yunona started small soon after he moved to the United States from Russia in the early 1990s. Then the company expanded aggressively on the Internet to compete with larger agencies. Jerdev hired a slew of freelancers to run the company's Web sites like a sales team. By 2001, the company reported it was handling as many as 400 adoptions a year with fees running as high as $15,000 and $20,000. Jerdev says he has many happy clients. But PJ Whiskeyman is disgusted with the company.

"It's basically a bait and switch operation because the children they're pulling you in with aren't available," says Whiskeyman.

Since posting her story on the Internet, PJ Whiskeyman says she's emailed or spoken with dozens of other families who say they were duped by Yuonona and are out thousands of dollars. One of those people was Mary Perdue.

Perdue had spent many months working to arrange Victor's adoption from Russia. Because of Yunona's prominent Web sites, she assumed the company was a big, professional agency.

But after signing her contract, Perdue soon found the Yunona wasn't living up to its promises, with lost documents, unanswered phone calls and long, unexplained delays. She worried that her adoption of Victor was in trouble.

Perdue's phone conversations, which she recorded with a small tape machine, reveal chaos within Yunona "I didn't go into this thinking people would hold my hand," she says on tape. "But I did expect information and honesty."

By pushing Yunona's staff, Perdue soon discovered some secrets about the company. On her contract, Yunona was listed as an "adoption agency." But Yunona wasn't a licensed adoption agency at all. The company operates through a loophole in California law that allows unlicensed facilitators to arrange adoptions for families across the nation, virtually unregulated. Nor did Yunona have legal standing in Russia. Instead, Mary was told Yunona had a contract and "legal cover" with an agency that was accredited in Russia,

. A Christian World representative declined to discuss the case, citing confidentiality laws. Christian World also declined to answer questions about Yunona.

As the delays continued, Perdue also heard about another family that was having problems adopting a child in the same region of Russia where Victor was living. A Yunona secretary told Perdue that the company was bribing a judge to try to get the case sorted out. Perdue raised the matter with the Yunona representative handling Victor's case.

Perdue: She told me that Yunona had bribed the judge and they're still not getting anywhere with her.

Yunona representative: But you know what, I will tell my client that Kazakhstan's judges are all bribed by us.

Perdue: Oh sure. I know it's everywhere.

Yunona representative: Kazakhstan especially. Russia is kind of the same thing.

Perdue says the conversation suggested Yunona was willing to bribe judges, but she doesn't know whether Yunona paid off judges in her case. When Perdue finally was cleared to travel to Russia, she was told not to mention Yunona to any officials and to take $9,000 in cash to give company representatives. At last the Perdues brought Victor to his new home in Iowa. But their troubles were just beginning.

Yunona told Mary Perdue that Victor was gentle and a deep sleeper, but in Iowa she discovered a different child: a boy, now eight, who never slept for more than four hours, was obsessed with fire and knives and was prone to long, violent rages.

Victor's screams, shouts and moans were captured on Perdue's small tape recorder. "I taped (him) because nobody believed that he would scream for hours," she says.

Victor often focused his rage on Kim, Mary's younger daughter, who's disabled and in a wheelchair.

"He really took it out on Kim," says Perdue. "He threatened to eviscerate her. He popped her in the mouth for no reason. He would push her wheelchair into walls and corners. And I just knew he was going to open that basement door one day when I was at work and put her down there."

A psychologist diagnosed Victor with numerous emotional disorders and concluded he had been severely abused and physically scarred in Russia.

"He had scars all over his head and we couldn't get it out of him what it was," says Perdue. "Come to find out he was given punishment by being put in a great big plastic garbage can, full of water, and they closed the lid."

For 18 months, the Perdues tried counseling and even residential treatment. Nothing worked. So last year, with a heavy heart, Mary gave up custody of Victor. An Iowa judge sent the boy to a special facility where he lives as a ward of the state. The Perdues believe Yunona and the Russian orphanage concealed Victor's medical history to make him more marketable.

"I made it crystal clear from the beginning that I wanted a healthy child," says Perdue. "At the very best, they lied. At the very worst, they're doing everything illegal."

The Perdues thought about filing a lawsuit. But that was too expensive, especially since the adoption had cost about $25,000. They did tell their story to the FBI, which has been investigating Yunona. Other families have complained to the state of California. But earlier this year state investigators determined they have no enforcement power over Yunona since it's not a licensed adoption agency.

That doesn't surprise Trish Maskew of Ethica.

"We've had cases where people have done investigations, they believe they've found evidence of child trafficking or purchase of children and yet they have no law to prosecute anyone under," says Maskew. "And so they can't bring those kind of charges."

Yunona president Ivan Jerdev claims he's been cleared by the state of California and says he's done nothing wrong. Jerdev says the company's problems are mainly due to a few disgruntled families and rival companies. He says all risks, including the possibility that medical information about the child is unreliable, are enshrined in Yunona's contracts with parents. But Jerdev doesn't deny using bribes. He says payoffs are necessary for all agencies to circumvent Soviet-era laws and rescue children from wretched conditions.

"It's everywhere. It's the reality," he says.

But Jerdev says he's not violating US law because independent coordinators make the actual payments.

"We don't pay," he says. "The coordinators must go do this. And they pay. They have to pay a lot of people. Bribes. The money always finds a way to go around."

Bribes are a sensitive topic for other more established agencies. Many have signed a voluntary standards of practice that discourages or bans such payments. But many of those same agencies routinely require adoptive parents to deliver large amounts of cash when they travel abroad without saying where the money is going.

"There really is no accounting for most of the money that goes overseas," says Trish Maskew. "Whether that money is being paid to an official, a family member, to a facilitator to pay a middle man somewhere to find a child. There are all kinds of schemes. That is trafficking. We're using money to move the child through the system."

Maskew says U.S. laws against trafficking and paying bribes are difficult to enforce and rarely applied to adoptions. And it's not illegal to make so-called grease payments to make adoptions happen faster.

Maskew says many agencies do have the welfare of children and parents at heart. But in a competitive industry with uneven regulations, a few rogue operators can accelerate a "race to the bottom." And Maskew says sometimes it's hard for good agencies to keep up.

"If you have an agency saying we're going to follow all the rules and it's going to take you 13 months (to adopt a child) and you've got somebody else saying we can do this in six (months), adoptive families are going to instinctively say I want the child sooner," Maskew says.

When they are exposed, illegal or unethical adoptions often have broad consequences. Nations such as Vietnam and former republics of the Soviet Union have temporarily shut down international adoptions following reports of baby trafficking.

New laws are in the works. The United States has signed the Hague Convention on International Adoption, a treaty aimed at stopping child trafficking. Based on the treaty, the State Department is drafting regulations that could require licensing for all adoption service providers. In theory, that could close loopholes for so-called facilitators like Yunona, at least if they are arranging adoptions in countries that also have signed the Hague convention. And new regulations could require agencies to disclose more information about their financial transactions and the medical histories of orphans. But some people worry that if the regulations are implemented, children will languish in overseas orphanages as agencies fight through more red tape. And adoption experts say even with new regulations, parents should carefully research the agencies they work with.

"You're not placing an order with Amazon.com," say Joan Hollinger, an adoption specialist at Boalt School of Law at the University of California at Berkeley. "And as sympathetic as I am to prospective parents who get emotionally connected through images to a particular child, I would also say that people have to understand that there just are enormous risks and uncertainties in any kind of adoption."

Each year thousands of Americans take that risk through international adoption, and create happy families. Some families are still adopting children through Yunona, though Ivan Jerdev says business has dropped since rumors of an FBI investigation started circulating on the Internet. Nevertheless, the company has expanded its offerings. This summer Yunona announced a new program.

. Yunona says one day soon the children might be available for adoption.