MESA, AZ (3TV/CBS 5) - Maricopa County Assessor Paul D. Petersen and a woman have been indicted on fraud charges in connection to his adoption business.

Petersen was arrested Tuesday evening and was transferred to Maricopa County, where he made his initial court appearance. The judge set a $500,000 cash bond. Petersen's next court appearance is Oct. 15, where he will be required to relinquish his passport.

[CONTINUING COVERAGE: Adoption fraud investigation]

According to court paperwork obtained by Arizona's Family, Petersen and associate Lynwood Jennet arranged and paid for pregnant women to travel from the Republic of the Marshall Islands (RMI) to the United States to place their children for adoption. The Compact of Free Association law, passed in the mid-1980s, bans women from RMI from coming to the U.S. just for adoption. The law allows for exceptions if a special visa is obtained.

[READ: Nurse who delivered Marshallese babies said she reported Petersen, Jennet years ago]

The paperwork indicates Petersen has been involved in adoptions with Marshallese babies as far back as 2005. Between Nov. 30, 2015, and May 30, 2019, investigators identified 28 women from the Republic of the Marshall Islands who gave birth in the Phoenix area and then placed their babies up for adoption through Petersen. Petersen allegedly paid these women as much as $10,000 plus $1,000/month during the time they were staying at his home in Phoenix. Additionally, he allegedly covered travel, food, and cell phone costs.

Investigators found eight pregnant women from the Marshall Islands in raids of his properties outside Phoenix, and several more are waiting to give birth in Utah, authorities said.

[READ: Woman indicted with Paul Petersen for adoption fraud scheme facing similar charges]

According to investigators, Petersen helped the women get state health benefits through the Arizona Health Care Cost Containment System (AHCCCS) once they were ready to give birth. Petersen and Jennet lied on legal documents and claimed the women were from Arizona, the documents allege. They did this, investigators say, through the Law Office of Paul D. Petersen, where Jennet worked. AHCCS investigators estimate the current loss to Arizona exceeds $800,000.

[READ: Couple shares their own Paul Petersen adoption horror story]

Petersen also is accused of hiring Marshallese women in Arizona, Utah and Arkansas to help the birth mothers in a variety of capacities, including translating for them, caring for them, helping them apply for Medicaid, taking them to and from appointments, and notorizing legal documents.

MULTI-STATE INVESTIGATION

Arizona's Attorney General calls this a "multi-state investigation." Utah's Attorney General's Office said that Petersen is alleged to have "transported over 40 pregnant Marshallese women" into that state over the last three years as part of the scheme.

The Utah Attorney General's Office added that they worked closely with authorities from Arizona, Arkansas, and the Republic of the Marshall Islands in parallel investigations into this scheme.

In Utah, Petersen is being charged with 11 felony offenses, including human smuggling, sale of a child, and communications fraud.

Women got little to no prenatal care in Utah, and in one house slept on mattresses laid on bare floors in what one shocked adoptive family described as a "baby mill," according court documents.

[PHOTOS: A look inside Utah home that used to be owned by Petersen]

The Utah probe began after investigators got a call to a human-trafficking tip line in October 2017. Staff at several hospitals in the Salt Lake City area would eventually report an "influx" of women from the Marshall Islands giving birth and putting their babies up for adoption, often accompanied by the same woman.

Additionally, a grand jury in Arkansas indicted Petersen on 14 federal charges connected to smuggling, wire fraud, mail fraud, visa fraud, and money laundering.

In Arkansas, it wasn't uncommon to find a dozen Marshallese mothers on the verge of giving birth in one house, said Duane Kees, the U.S. attorney for the western district of Arkansas.

"Many of these mothers described their ordeal as being treated like property," Kees said. "Make no mistake: this case is the purest form of human trafficking."

Arkansas has one the largest concentrations of Marshallese immigrants in the U.S. and the women would then be flown there or back to the Marshall Islands after giving birth, authorities said.

ADOPTIVE FAMILIES

Petersen allegedly charged each adoptive family $35,000 per adoption. It was actually a family who had contacted Petersen about adoption that tipped off authorities. Col. Frank Milstead with the Arizona Department of Public Safety said the investigation began in 2018. Milstead says a DPS trooper's friend had gone to Petersen's law office to look into an adoption. That friend told the trooper he had concerns about the fees and the legitimacy of the operation.

[WATCH: How investigation into Maricopa County assessor's alleged illegal adoption ring started]

Arizona Attorney General Mark Brnovich stressed that the investigation is centered on Petersen and his associates, not the adoptive families.

"The people that adopted these children are not the focus of this investigation," said Brnovich.

When asked "What will happen to the kids?" Brnovich reassured the public that "Anyone who has adopted a kid has nothing to worry about."

INVESTIGATORS ASK ANYONE WITH INFORMATION TO CALL HOTLINE

Brnovich says he expects the investigation to grow and is asking people with information to call in with anything they might know.

Anyone with information or questions pertaining to adoptions involving children from the Marshall Islands is urged to call the Arizona Attorney General's Office at 602-542-8888. (Click the phone number to call from this story your mobile device.)

According to the Maricopa County Assessor's website, Petersen has been helping people across the U.S. adopt for nearly 15 years.

Petersen was appointed to the position of county assessor in 2013, won a special election in 2014, and was re-elected in 2016. The county assessor is in charge of property valuation.

A Maricopa County spokesperson said Petersen is still the Maricopa County Assessor and the Board of Supervisors will seek legal advice on the matter.

[VIDEO: Maricopa County Assessor Paul D. Petersen arrested]

[RAW: Maricopa County Assessor Petersen makes initial court appearance after indictment]

[WATCH: Neighbors' shocked' by DPS raid of County assessor's law office]

RMI is a small country of islands and atolls in the north-central Pacific, about halfway between Hawaii and Australia. The U.S. controlled RMI from the end of World War II until the country became self-governing in 1979, but it was still under U.S. administration. In 1986, RMI was granted its sovereignty in exchange for, among other things, allowing the U.S. to keep using a missile testing range on one of its atolls. The U.S. is responsible for the defense of RMI.

 


Copyright 2019 KPHO/KTVK (KPHO Broadcasting Corporation). All rights reserved.

 

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