'A baby-selling enterprise': Former Arizona electe

JESSICA BOEHM ,  ROBERT ANGLEN   | Arizona Republic

PHOENIX – A U.S. District judge sentenced former Maricopa County Assessor Paul Petersen to 74 months in federal prison for perpetrating illegal adoptions in what prosecutors called a "get-rich-quick scheme ... hidden behind the shiny veneer of a humanitarian operation."

The judge also fined Petersen $100,000. 

"He subverted what should be a joyous time for everyone into a baby-selling enterprise. The conduct Mr. Petersen engaged in violates public policy. We don't sell babies. That is the public policy of the United States of America," U.S. District Judge Timothy L. Brooks said during Petersen's virtual sentencing hearing Tuesday morning. 

Petersen has 14 days to appeal the sentence.

Petersen, who was arrested last year on charges related to human smuggling and Medicare fraud, could face additional time on state charges after he completes his federal sentence. 

This summer, Petersen pleaded guilty to charges in Arizona and Utah state courts and to federal charges in the Western District of Arkansas in hopes of combining his sentences and serving them in a federal penitentiary.

The Arizona Attorney General's Office says it is not party to any agreement to cut the sentence for the former Maricopa County assessor, and it's unclear whether Utah prosecutors will cut any deals, either. 

"The Arizona sentencing agreement is completely devoid of any concurrent language or a global settlement," Arizona Attorney General's Office spokesperson Ryan Anderson said. "The attorney general has not agreed to that."

Petersen is scheduled for sentencing in Utah on Jan. 20 and in Arizona on Jan. 22.

Petersen faces up to 15 years in Utah and about 16.5 years in Arizona.

Brooks said he would recommend that the Utah and Arizona sentences be served concurrently with the federal sentence but noted that he cannot force the state courts to agree with his recommendation. 

Before he was sentenced, Petersen read a statement saying it was not his intention to harm anyone and expressing remorse that some women he worked with may have felt that he took advantage of them for his own profit. 

"To any (birth mother) that felt misled, slighted, disregarded, disrespected or even coerced, I say, 'I'm sorry,'" Petersen said. 

He also lamented the time he'd have to spend away from his own four children while serving time in prison.

"I tried to make happy families, and in so doing ruined my own," Petersen said. 

How Petersen's adoption operation worked

Petersen was the elected county assessor in Maricopa County until earlier this year, when he resigned to focus on his criminal defense. The Maricopa County Board of Supervisors had attempted to remove him from his post after his October 2019 arrest.

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

Virtually all of the adoptions Petersen arranged through his Mesa law office were with birth mothers from the Republic of 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 in 1998 served a Church of Jesus Christ of Latter-day Saints mission in the Marshall Islands, where he learned to speak the language. He quickly started working in the adoption industry when he returned. Prosecutors allege Petersen conducted more than 70 illegal Marshallese adoptions over the course of his career.

According to court records, law enforcement investigation records and paperwork from Petersen's law office obtained by The Arizona Republic of the USA TODAY Network, Petersen orchestrated his adoption practice this way: 

• Pregnant women in the Marshall Islands would contact a "fixer" who had contact with Marshallese women in the U.S. that Petersen employed.
• These employees would connect a woman with Petersen, who would send money and arrange for the woman to get a passport and fly to the U.S. 
• The woman often would arrive four to five months before her due date and live in a house Petersen owned or rented in Arizona, Utah or Arkansas. 
• Petersen would pay the woman about $1,000 a month, minus rent and utilities. 
• Petersen or his employees would help the woman sign up for Medicaid so the government health care system would cover the cost of the baby's birth. 
• He then charged American families about $40,000 to carry out their adoptions. 
• Once the baby was born and the adoption was complete, he would pay the woman "postpartum money" for one or two months and purchase a flight back to the Marshall Islands or to wherever the woman wanted to go within the United States. 

Law enforcement investigators allege that Petersen not only violated the Compact of Free Association by bringing pregnant women to the U.S. for the purpose of adoption — he also broke dozens of other laws related to Medicaid fraud, racketeering and human smuggling. 

Marshallese citizens are not eligible for Medicaid unless they have lived in the U.S. for five years. 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.

Federal judge in Arkansas rips Petersen

The judge blasted Petersen before he announced his sentence. 

Petersen in 1998 served a Church of Jesus Christ of Latter-day Saints mission in the Marshall Islands, where he learned to speak the language. He quickly started working in the adoption industry when he returned. Prosecutors allege Petersen conducted more than 70 illegal Marshallese adoptions over the course of his career.

According to court records, law enforcement investigation records and paperwork from Petersen's law office obtained by The Arizona Republic of the USA TODAY Network, Petersen orchestrated his adoption practice this way: 

• Pregnant women in the Marshall Islands would contact a "fixer" who had contact with Marshallese women in the U.S. that Petersen employed.
• These employees would connect a woman with Petersen, who would send money and arrange for the woman to get a passport and fly to the U.S. 
• The woman often would arrive four to five months before her due date and live in a house Petersen owned or rented in Arizona, Utah or Arkansas. 
• Petersen would pay the woman about $1,000 a month, minus rent and utilities. 
• Petersen or his employees would help the woman sign up for Medicaid so the government health care system would cover the cost of the baby's birth. 
• He then charged American families about $40,000 to carry out their adoptions. 
• Once the baby was born and the adoption was complete, he would pay the woman "postpartum money" for one or two months and purchase a flight back to the Marshall Islands or to wherever the woman wanted to go within the United States. 

Law enforcement investigators allege that Petersen not only violated the Compact of Free Association by bringing pregnant women to the U.S. for the purpose of adoption — he also broke dozens of other laws related to Medicaid fraud, racketeering and human smuggling. 

Marshallese citizens are not eligible for Medicaid unless they have lived in the U.S. for five years. 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.

Federal judge in Arkansas rips Petersen

The judge blasted Petersen before he announced his sentence. 

Ableser, a former Arizona lawmaker, said he had known Petersen since the two were in student government in college. He described Petersen as gentle, kind and a "teddy bear" to his children.

He said he adopted a child from China who was abandoned at a subway station and spent the first two years of her life in a crowded orphanage. He said he wished his daughter's birth mother had received the kind of respect and care Petersen showed the Marshallese birth mothers. 

Lars Christensen, who said he had known Petersen since kindergarten, told the court that he and his wife paid Petersen's $500,000 cash bond the morning after his arrest because they believed in Petersen's character and knew he was "the kind of person who would never intentionally hurt anyone else."

"I'm proud to call Paul Petersen one of my dearest friends," Christensen said. 

Petersen's brother Landon Petersen spoke on behalf of his parents and siblings. He recounted the pain he felt reading the prosecution's allegations that his brother was a smuggler and controlling over women. 

"I know who my brother is," Landon Petersen said. "I know the prosecution doesn't know who my brother is." 

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."

The website says Petersen was wrongly accused of defrauding the state's Medicaid system and indicates he has reimbursed the state. The website says taxpayers should not be forced to pay for Petersen's prosecution and incarceration.

"The only victims are Paul, his family, and the taxpayers," according to the website. 

As part of his plea agreement, Petersen agreed to pay $679,000 in restitution and fees. That includes $650,000 to the Arizona Health Care Cost Containment System, $18,000 to the Attorney General's Office and $11,000 to the adoptive family he overcharged.

The defense website also directs supporters to sign a petition to overturn asset seizure laws in Arizona.

Follow reporters Jessice Boehm and Robert Anglen on Twitter: @jboehm_NEWS, @robertanglen