Judi Mosley was brimming with anticipation when she traveled to Cambodia in December 1999 to pick up the 6-year-old orphan she and her husband were adopting. According to the Seattle agency to which they'd paid $9,500 to make the adoption arrangements, the little girl had no family and had spent four years in an orphanage near the town of Siem Reap. Soon after meeting her, Mosley, against the agency's advice, took her new daughter back to the orphanage to deliver clothes to her friends. But she was surprised when, after a 15-minute visit, the girl gave instructions to the driver in Khmer that sent them on a journey over rutted dirt roads to a rural hut raised on stilts.

"My daughter's gesticulating at the house, and there's all sorts of excitement," says Mosley. "Suddenly a young woman comes down the steps with a baby on her hip, and the translator tells me, 'This is your daughter's sister.' There are tears all around and hugs and the sister invites us in to sit down." By the time she and her daughter left, Mosley had learned that the girl not only had a sister and nephew but a brother and five aunts, and that contrary to the paperwork, her mother had died just months earlier and she had never lived in an orphanage. "All her paperwork was bogus," says Mosley, 48. "My mind was just spinning."

In December federal authorities, long concerned about allegations of child-trafficking in Cambodia, shut down the agency, Seattle International Adoptions, charging its owner Lynn Devin, 50, and her sister Lauryn Galindo, 52, with fraud and money-laundering. Though Devin and Galindo helped hundreds to become parents—including Angelina Jolie, who adopted son Maddox, 2, in March 2002 (see box on page 76)-court documents allege the sisters falsified visas, switched the records of living children with those of the dead, and in one instance swapped a sick child for a healthy one midadoption without changing the paperwork.

On Dec. 10, Devin pleaded guilty to conspiracy to commit visa fraud, and Galindo, who lives in Kauai, Hawaii, was expected to meet with prosecutors in Seattle Jan. 7. Neither the sisters nor their lawyers would comment for this story. "There are three potential victims—the children, the birth parents and the U.S. families," Christopher Bentley, spokesman for U.S. Citizenship and Immigration Services, says of adoption fraud. "We have an obligation to protect all three."

The case against the sisters is part of a broader problem with adoptions from Cambodia. "We know bad stuff has been going on there," says Adam Pertman of New York City's Evan B. Donaldson Adoption Institute. "This includes baby-selling, coercion and more subtle ways of inducing women to give up their babies." U.S. families have adopted 97,064 children from foreign countries over the past five years, including 1,467 from Cambodia. U.S. federal law requires that foreign adoptees be certified as orphans, but a U.S. Immigration Service investigation found Cambodia's record-keeping so unreliable that, concerned about child trafficking, the U.S. stopped processing visas for Cambodian children in December 2001. (Since then the government has allowed nearly 400 adoptions to proceed because they were initiated before the ban.)

Most Americans who adopt children from Cambodia pay agents like Galindo and Devin about $13,000 to take care of paperwork and smooth the process. Some of this money may go to "facilitators" on the ground who help find the children; they in turn may pay fees and costs to orphanages and "gratuities" to government officials along with their own expenses. But the idea that they might also use money or other means to purchase or coerce children from their birth parents, then alter the paperwork to conceal it, is what has U.S. investigators and human-rights groups particularly concerned.

"The [Cambodian] system," says Jason Barber of Licadho, a human-rights agency based in Phnom Penh, "doesn't distinguish between real orphans and those who have been obtained through dishonest means."

But adoption advocates argue that without U.S. adoptions, many genuine, needy orphans would be left behind. Dr. Daniel Susott, who has facilitated adoptions for a Honolulu agency for 13 years, says a Cambodian orphanage director told him half his facility's children die within a year. "It was like getting kids out of a burning building," he says. Says the Donaldson Institute's Pertman: "We should be trying to serve [those children] at the same time we're trying to clean up the process."

Meanwhile, many grateful adoptive parents have nothing but praise for Devin and Galindo. "Lynn has been made a scapegoat," says Melanie Curtright, 44, of Sammamish, Wash., a single mother who paid about $15,000 to adopt son Nicholas, 2, in May 2002. Curtright credits the sisters with getting her visa in the pipeline before the government ban. "They truly care."

Mosley, for one, would beg to differ. A British native who lives with her husband, Tony, 47, a New Jersey-born telephone company manager, on the island of Saipan, a U.S. territory in the western Pacific, she hired SIA to find a 6-or 7-year old child because its fees were reasonable. In April 1999 the company identified a girl named Songkea. In December, Mosley flew to Phnom Penh, where she met the girl almost immediately upon arriving at Galindo's apartment. "I was surprised at how hasty and informal the arrangement was," she says. "It's all a bit of a mystery."

The intrigue only heightened when Mosley made that trek to Siem Reap. Songkea's relatives told her that the girl, now named Camryn, had been approached in her village and asked if she wanted to go to a better life in America. "She was recruited, solicited—call it what you like—for adoption," says Mosley. When she told Galindo about the family, she says, "her reaction was, 'Oh, really? That's nice.' " Mosley gave Camryn the option of returning to her family. She decided to stay with her new parents. "What a terrible decision to place on a little girl," Mosley notes. "She could see her life had improved no end, but she missed her Cambodian life." Five years later, Mosley reports, Camryn is a happy, bright 6th-grader; they hope to visit her original family this year.

Troubling as it is, their situation, and the alleged business practices of SIA, aren't unique. In 2001 a different agency asked for $19,000 from Dale Edmonds and her husband, Jimmy Yap—a New Zealander and Singaporean, respectively, who live in Singapore—to handle the adoption of an orphaned Cambodian brother and sister. Instead, Edmonds did it herself, paying $3,000 to the agency only for identity papers and $4,000 in government fees. Soon after Edmonds picked up the pair, the girl, Emma, told her that her parents, two sisters and a brother were still alive. The adoption agent said that the mother had abandoned the family. But back in Singapore a few months later, Emma revealed that her father had in fact sold her. "My husband and I looked at each other in horror," she says. "She thought we had bought her, and unwittingly, horribly, we felt we had." They returned to Cambodia and found the children's biological family, who told them the father had collected $200 for them. The mother thanked Edmonds for caring for the children she couldn't support and asked her to keep them.

Officials say there is no risk that foreign children who have been adopted and brought to the U.S.—and are therefore considered U.S. citizens—will be forced to return if they are found to have families in their native countries. The moratorium, however, will continue until immigration authorities are convinced the problems are cleared up.

Meanwhile, parents like Edmonds and Mosley live with the emotional fallout. "There are still secrets locked away that my children are too frightened to tell," says Edmonds. "The happy ending is that they've learned to talk and to trust—and to understand what happened to them was not their fault."

By Thomas Fields-Meyer. Ron Arias and Maureen Harrington in Los Angeles, Karen Emmons in Bangkok, Alexandra Rockey Fleming in Washington, D.C., and Tim Ryan in Honolulu