The disgraced former Maricopa County Assessor accused of bilking taxpayers in a for-profit adoption scheme has entered into two plea deals which could send him to prison for up to 12.5 years.
Paul D. Petersen, 44, pleaded guilty Thursday to four felonies related to his Mesa-based Bright Star Adoption agency. Sentencing must occur within the next 90 days, although Maricopa County Superior Court Judge Ronne F. Korbin Steiner has not set a hearing date.
Petersen’s pleas include admissions that he engaged in fraudulent schemes with co-defendant Lynwood Jennet from November 2015 to May 2019 to transport pregnant women from the Republic of the Marshall Islands so they could give birth in Arizona. Petersen, who is an attorney, then arranged private adoptions of the babies at an average cost of $35,000 each.
In addition, Petersen admitted to aiding the women in fraudulently obtaining healthcare coverage through the Arizona Health Care Cost Containment System even though they were not state residents. AHCCCS paid for at least 29 of the births between November 2015 and May 2019, according to the Arizona Attorney General’s Office.
In 1983, the United States entered into a compact with the Marshall Islands which prohibits its citizens from entering the United States for the purpose of participating in adoptions. Although Petersen pleaded guilty to criminal conduct dating to November 2015, court records show he was involved in arranging adoptions from the Marshall Islands for more than a decade.
Petersen’s indictment in October 2019 garnered national attention, and the attention of Arkansas and Utah law enforcement agencies. He was later charged with state offenses in Utah and federal crimes in Arkansas connected to adoption activities.
The plea deals accepted by Judge Steiner on Thursday involve only the Arizona charges, and stipulate that Petersen will serve 3 to 12.5 years in prison for the most serious charge, with the sentencing judge deciding the length of the term.
Petersen could also be sentenced to shorter sentences for forgery of an adoption record and providing “false and fictitious information” on a report filed with the Maricopa County’s Juvenile Court. However, the sentencing judge has discretion to forgo additional imprisonment on those felonies in order to require Petersen to serve supervised probation upon his release from prison.
The plea deals also require Petersen to pay restitution of $650,000 to AHCCCS, $18,000 to the attorney general for investigative costs, and $11,000 to an unnamed victim.
“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,” Attorney General Mark Brnovich said after the plea hearing. “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.”
During Thursday’s hearing, Petersen’s attorney Kurt Altman told Judge Steiner that plea deals will likely be signed soon to resolve the Utah and Arkansas cases. Altman also revealed that Petersen will be sentenced in the federal Arkansas case first, which will put him in the custody of the Federal Bureau of Prisons (BOP).
He will then serve his Arizona and Utah state court sentences concurrently with the federal sentence.
In the meantime, Steiner is allowing Petersen to remain out of custody until sentencing even though court rules normally require a defendant to be jailed at the time of a guilty plea if a prison term is mandatory. The judge acknowledged it will be easier for Petersen to resolve his other cases, as well as Petersen’s $500,000 cash bond and the fact that he is subjected to electronic monitoring ordered by an Arkansas federal magistrate.
Petersen was appointed by the Maricopa County Board of Supervisors to the office of county assessor in 2013. He handily won the November 2016 election but resigned from office in January. A review of the State Bar of Arizona website shows Petersen’s licenses to practice law in Arizona, Arkansas, and Utah are active as of Thursday.
Lynwood, the co-defendant, pleaded guilty in December to conspiracy to commit fraudulent schemes and artifices, theft, and failure to file a tax return for her role in the fraudulent adoption scheme. She faces two to four years in state prison when sentenced Aug. 21.