Co-Defendant in Marshallese Adoption Fraud Scheme Sentenced to Prison

PHOENIX - Attorney General Mark Brnovich announced Lynwood Jennet was sentenced to two years in state prison for helping her co-defendant, Paul Petersen, run an adoption scheme unlawfully paid for by Arizona taxpayers.

“Today's sentence demonstrates that if you defraud Arizona taxpayers, you will be held accountable,” said Attorney General Mark Brnovich. “This investigation and successful prosecution concludes a model example of how local, state and federal law enforcement agencies can work together to serve their communities.”

Jennet helped Petersen arrange adoptions from the Marshall Islands. Even though Petersen charged families around $35,000 per adoption to cover medical expenses, Jennet helped the birthmothers apply for medical benefits through the Arizona Health Care Cost Containment System (AHCCCS) to pay for their births with tax dollars. The birthmothers should not have qualified for AHCCCS benefits because they were not Arizona residents. Between November 2015 and May 2019, AHCCCS paid for at least 29 births.

In April 2019, a social worker at Mercy Gilbert Medical Center contacted law enforcement after a birthmother listed the same person (Jennet) as her emergency contact, notary, and interpreter. The social worker told detectives she was the third woman in three weeks to show up at the hospital under similar circumstances.

The Arizona Department of Public Safety (AZDPS) and Special Agents with Homeland Security Investigations (HSI) investigated the case. A State Grand Jury indicted Jennet and Petersen in October 2019.

“The defendants in this case, knowingly and willfully defrauded taxpayers for the sole purpose of lining their pockets with proceeds stemming from illegal financial activity,” said HSI Special Agent in Charge Scott Brown. “HSI is committed to working with our law enforcement partners to help stop financial fraud and deceptive practices. Let this sentence serve as a reminder – those who believe they won’t be caught are wrong – you will be brought to justice.”

In December 2019, Jennet pleaded guilty to Conspiracy to Commit Fraudulent Schemes and Artifices, Two Counts of Theft, and Failure to File a Tax Return.

Since December 2019, Jennet has been on house arrest and subject to electronic monitoring. She was taken into custody after today’s sentencing hearing.

In accordance with Jennet’s plea agreement, she will pay restitution in the following amounts:

  • $28,001.97 to AHCCCS
  • $6,591.00 to the Arizona Department of Revenue (Failure to file Tax Return – Class 5 Felony)

Assistant Attorneys General Evan Malady, Scott Blake, and Blaine Gadow prosecuted the cases.

Co-Defendant Paul Petersen

In April 2021, Paul Petersen was sentenced to five years in state prison for running the fraudulent adoption scheme. Petersen’s sentence will run consecutive to his federal sentence of six years. Arizona's sentencing agreements were not part of a global settlement.