Paul Petersen Pleads Guilty to Arizona Charges in Adoption Fraud Scheme

PHOENIX – Attorney General Mark Brnovich announced today that former Maricopa County Assessor Paul Petersen pleaded guilty in Maricopa County Superior Court to running an adoption fraud scheme that involved bringing pregnant women from the Marshall Islands to the U.S. to give birth, fraudulently paid for by Arizona taxpayers. Today's plea agreements only resolve Petersen’s criminal cases in Arizona.

On Thursday June 18th, Petersen pleaded guilty to:

  • Fraudulent Schemes and Artifices, a Class 2 Felony
  • Fraudulent Schemes and Practices, a Class 5 Felony
  • Forgery, a Class 4 Felony 
  • Fraudulent Schemes and Practices, a Class 5 Felony

“While Paul Petersen enjoyed a position of respect and trust in the community, he manipulated adoptive families and bilked Arizona taxpayers for his own profit,” said Attorney General Mark Brnovich. “Mr. Petersen must now answer for his crimes. It doesn’t matter if you’re politically connected, wealthy, or an elected official, the rule of law applies equally to everyone.”

As part of the plea agreement with the State of Arizona, Petersen will pay the following in restitution:

  • $650,000 to AHCCCS
  • $11,000 to an uncharged victim
  • $18,000 to the Arizona Attorney General’s Office for investigative costs

A sentencing hearing for Petersen has not been scheduled yet. A Maricopa County Superior Court Judge will consider both aggravating and mitigating factors. Petersen faces between 3 to 12.5 years in the Arizona Department of Corrections in his first case. Petersen faces between .5 to 4 years in prison for the second case.

Petersen ran an adoption agency out of Mesa, Arizona. For more than a decade, Petersen had been involved in arranging adoptions from the Marshall Islands.

In October 2019, a State Grand Jury indicted Petersen after a multistate investigation. Petersen charged adoptive families on average $35,000 per adoption and claimed the money could be used for various expenses like legal, medical, and living. However, Petersen directed his co-conspirator, Lynwood Jennet, and the birth mothers to provide false information about their residency status to obtain medical services from the Arizona Health Care Cost Containment System (AHCCCS), the state’s Medicaid system. The birth mothers 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.

Second Criminal Investigation

Following the October 2019 indictment, the Arizona Attorney General’s Office opened a second criminal investigation against Petersen. Petersen had provided false information regarding birth mothers’ fees to prospective adoptive parents and to the Maricopa County Superior Court Juvenile Division. Petersen would often include fraudulent or false information on court paperwork to ensure adoptions were approved. Additionally, Petersen would inflate the duration of time he paid for a birth mother’s living expenses to the adoptive family. For example, one family paid Petersen $33,000 for an adoption. According to an affidavit, $11,000 was for living expenses that Petersen had paid for the birth mother to live in Arizona for five months. In reality, the birth mother arrived in Arizona one day prior to giving birth and only stayed for an additional 14 days.

Co-Defendant Lynwood Jennet

In December 2019, Petersen’s co-defendant Lynwood Jennet pleaded guilty for her involvement in the adoption fraud scheme. As part of her plea agreement, Jennet agreed to testify against Petersen. Jennet faces between 2 to 4 years in the Arizona Department of Corrections.

A sentencing hearing for Jennet is scheduled for August 21, 2020 at 11 AM.

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