Here’s what we know about a Valley official’s alleged adoption scheme

Petersen, 44, and Lynwood Jennet, who was also listed in the indictment, were accused of recruiting, transporting and offering to pay more than 40 pregnant women from the Marshall Islands to adopt out their babies in the United States between November 2015 and May 2019.

The indictment said Petersen falsely claimed the Marshall Islands women were Arizona residents on paperwork to get them state-funded health care coverage, bilking Arizona’s Medicaid system out of $814,000.

“What Mr. Petersen is also accused of doing is an affront, frankly, to all Arizona taxpayers,” Arizona Attorney General Mark Brnovich said at a press conference Wednesday.

An Arizona Health Care Cost Containment System spokeswoman told KTAR News on Wednesday the agency does not comment on fraud investigations.

Petersen was also accused of violating U.S. law prohibiting citizens of the Marshall Islands from traveling to the U.S. for the purpose of adoption without a special visa.

At least 29 women gave birth in Arizona, Brnovich said. He said his office believes many of the children have been adopted in other states.

Petersen’s business website noted the average cost of an adoption with his firm was $30,000-$40,000 and that the money covered “the birth mother’s monthly expenses, prenatal and delivery medical expenses and assistants and office expenses.”

According to the indictment, he and Jennet paid for the women to travel and stay in Arizona for the purpose of placing their babies up for adoption.

The pair also allegedly paid the women $1,000 per month, and some were offered up to $10,000 to complete the adoption process, according to court documents.

The documents stated Petersen employed Marshallese women to care for the birth mothers and translate for them. Jennet was allegedly the point of contact for all the mothers.

After the adoption process was complete, Petersen and Jennet allegedly paid for the women to leave Arizona and either go to Arkansas or back to the islands.

The arrest

Arizona Department of Public Safety Director Col. Frank Milstead said the agency began investigating when a trooper was contacted by a friend last year who had gone to Petersen’s office to adopt a child.

“After the initial meeting, this particular person was concerned about the legitimacy of the process, the fees involved in the process, and talked to our detective trooper,” Milstead said.

Petersen was taken into custody Tuesday near Gila Bend. He was indicted on 32 counts that included human smuggling and sale of a child in Utah, and conspiracy and fraud in Arizona.

Milstead said Petersen invoked his right to remain silent and did not speak to authorities when arrested.

The U.S. Attorney for the Western District of Arkansas Duane Kees said Petersen could face a $5 million fine and up to 315 years in prison.

He said as the investigation continues, Petersen could face additional charges. He was being held on $500,000 cash-only bond.

The aftermath

Authorities executed search warrants in multiple locations Tuesday and found eight pregnant women from the Marshall Islands, Milstead said.

The parents who adopted the children and the birth mothers will not be a focus of the investigation, Brnovich said.

He said none of the completed adoptions are in jeopardy and children will not be returned.

The suspects

Petersen is in his second term as county assessor. He previously spent eight years in the office working as the assessor’s representative at the Arizona Legislature and as public information officer.

He is a five-generation Arizonan and an active member of the Maricopa County and Arizona Republican parties, according to his online biography.

He graduated from Arizona State University’s law school in 2002 and is admitted to practice law in Arizona, Utah and Arkansas, according to a video on his law office’s website.

Details about Jennet’s background were not immediately released.

Reaction

Gov. Doug Ducey suggested Peterson should resign from his position.

“There’s an investigation ongoing, so I want the investigation to be complete and understand all the facts,” he told reporters Wednesday.

“I imagine that he should resign because this is going to take up all of his time in having to deal with this and there’s no way that he can serve in his public role in this capacity.”