Co-Defendant in Alleged Marshallese Adoption Fraud Scheme Pleads Guilty

PHOENIX - Attorney General Mark Brnovich announced Lynwood Jennet pleaded guilty to Conspiracy to Commit Fraudulent Schemes and Artifices, Two Counts of Theft, and Failure to File a Tax Return. With two pending cases filed against her by the Arizona Attorney General’s Office in Maricopa County Superior Court, Jennet took steps to resolve both today by entering a plea agreement.

“Today’s development is a significant step towards justice in this case,” said Attorney General Mark Brnovich. “We will continue to pursue any individual who rips off Arizona taxpayers.”

In September 2019, Jennet was indicted by a State Grand Jury for fraudulent filings to the Arizona Health Care Cost Containment System (AHCCCS), the state’s Medicaid system, and failing to file a tax return. Later, in October 2019, Jennet and Paul D. Petersen were both indicted by a State Grand Jury in an alleged adoption fraud scheme.

As stated in Jennet’s plea agreement, between November 30, 2015, and May 30, 2019, Jennet coordinated certain aspects of the Marshallese adoptions, including helping birthmothers in applying for medical benefits through AHCCCS. Jennet admits she fraudulently misrepresented that the applicants were Arizona residents in order to obtain payment for medical services, including birth costs.

In 1983, the United States entered into a Compact of Free Association with the Republic of the Marshall Islands (RMI), which prohibits RMI citizens from entering the United States under the Compact if their travel is for the purpose of adoption.

As part of Jennet’s plea agreement, she will provide complete and truthful testimony and information in any matter involving Petersen regarding the transportation, fraudulent AHCCCS applications, and the status of any birthmother flown to and from Arizona for the purpose of giving up a child for adoption between November 30, 2015, and May 30, 2019, and other associated crimes and conduct.

Jennet stipulates to pay restitution in the following amounts:

  • $53,971.70 to the Arizona Health Care Cost Containment System (Theft – Class 6 Felony)
  • $6,591.00 to the Arizona Department of Revenue (Failure to file Tax Return – Class 5 Felony)
  • $814,383.01 to the Arizona Health Care Cost Containment System, joint and several with the co-defendant (Theft – Class 2 Felony)

Jennet faces between two to four years in the Arizona Department of Corrections. A sentencing date has not been scheduled.

Pending court approval, Jennet will be placed on house arrest and subject to electronic monitoring until March 20, 2020. After that date, she will be taken back into custody until her sentencing hearing.

The case involving Petersen is ongoing. No further comment will be made on his case at this time.

All defendants are presumed innocent until convicted in a court of law.

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

Copy of plea agreement related to CR2019-006037.
Copy of plea agreement related to CR2019-006302.