Phoenix • A former Phoenix politician already jailed to six years for running an illegal adoption scheme involving women from the Marshall Islands was ordered to serve another five years behind bars for defrauding Arizona’s Medicaid system in fraud to obtain taxpayer-funded health coverage for mothers biological, even though he knows they don’t live in the state.
Paul Petersen, a Republican who was Maricopa County’s elected appraiser for six years and worked as an adoption lawyer, on Friday received the second of three sentences stemming from the adoption scheme. A five-year sentence in Arizona will be served after he completes a six-year federal sentence for conspiring to smuggle people in Arkansas.
Petersen wears an orange prison suit in a Phoenix courtroom where he offers an apology and cries as he describes hurting his clients, former colleagues and his own family through his practice. “No one is to blame but myself,” said Petersen.
Authorities say Petersen illegally paid women from the Pacific island nation to give up their babies in at least 70 adoption cases in Arizona, Arkansas and Utah. Marshall Islands residents have been barred from traveling to the United States for the purpose of adoption since 2003.
Petersen’s third sentencing trial for people smuggling in Utah was scheduled for Monday, but has since been postponed. The trial has not been rescheduled.
He was convicted in Arizona for submitting a bogus application to the state’s Medicaid system so that a pregnant Marshall Islands woman could receive health insurance and for giving written statements to the court containing false information about fees paid to birth mothers.
“The judges in this case were given false information and that undermined the legal process in which the judge took the decision on this adoption,” Judge Thomas Fink said shortly before handing down Petersen’s sentence.
Prosecutors said Petersen knew the birth mothers involved in the scheme did not meet Arizona’s requirements for Medicaid recipients to live in the state, but he still instructed a woman working in adoption practices to queue up for Medicaid protection for them. In one case, authorities said a birth mother whose medical expenses were covered by Medicaid gave birth to her child a day after arriving in Arizona – and was flown out of state about two weeks later.
Prosecutors also said Petersen regularly misrepresented in filings with juvenile courts about how long he had paid for the cost of giving birth to mothers, claiming in one instance the five-month fees for a birth mother who were in Arizona for less than a month. Petersen is accused of instructing women who help practice adoptions to submit residency papers for birth mothers who have left Arizona in a bid to avoid having to cover her medical bills. Authorities say each adoption becomes more profitable for Petersen when the costs are borne by the government.
In a letter last year to the judge in the Arkansas case, Petersen said he was now embarrassed, as a fiscal conservative, of burdening Arizona taxpayers with maternity and delivery costs.
His attorney, Kurt Altman, argues that his client admitted wrongdoing, pleaded guilty to charges in three states, no longer has a license to practice law and has paid back $ 679,000 in health care costs to Arizona of over $ 800,000. Prosecutors say fraud costs taxpayers.
Altman argues that authorities have not asked Petersen to adjust or stop adoption practices in years and argues that his client’s practice was not at issue in the Arizona case, as the conviction was linked to fraud both in health care and in filing court records.
Prosecutors did not specify how many years in prison they were looking for Petersen, but they said he should spend more time behind bars over his sentence in Arkansas. “This is not a one-time situation,” said prosecutor Scott Blake.
In the Arkansas case, Petersen was sentenced to prison that was two years longer than recommended sentencing after a federal judge concluded Petersen was misleading or instructed others to lie to the court about an adoption that would not have been approved had the truth been told to court officials. The judge also emphatically rejected Petersen’s claim that he initially thought he was acting within the bounds of the law, but later realized what he was doing was illegal. Petersen has appealed the Arkansas sentence.
While Petersen was accused of abusing his position as a lawyer, prosecutors said he was not using his elected position to facilitate adoptions.
Petersen is a member of The Church of Jesus Christ of Latter-day Saints and previously in his life completed a missionary mission in the Marshall Islands, a collection of atolls and islands in the eastern Pacific. He became fluent in Marshallese.
After allegations of adoption fraud surfaced, Petersen continued to work as an appraiser for Arizona’s most populous county for nearly three months amid intense pressure to resign – and he did so in January 2020. He is responsible for determining property values in the county that includes Phoenix.
Petersen said he helped people with hundreds of legal adoptions after he found niche locations for homes for vulnerable children from the Marshall Islands and helped needy mothers who wanted a more stable family life for their children.
