The assessor of Arizona’s most populous county has been indicted in an adoption fraud case, accused of arranging for dozens of pregnant women from the Marshall Islands to come to the U.S. to give their children up for adoption, according to an Arizona court filing.
Utah also has charged Maricopa County Assessor Paul Petersen with 11 felony counts, including human smuggling, sale of a child and communications fraud. News conferences are scheduled Wednesday morning in both Phoenix and Salt Lake City on the cases.
A call and email sent to Petersen’s attorney seeking comment were not immediately returned.
The Utah attorney general’s office says more than 40 pregnant women were transported to Utah during the past three years as part of the scheme.
“While Mr. Petersen is entitled to a presumption of innocence, our investigation uncovered evidence that he has committed horrible crimes,” Utah Attorney General Sean D. Reyes said in a statement. “Petersen’s illegal adoption scheme exploited highly vulnerable groups in two countries — the birth mothers and families in the Marshall Islands and the adoptive parents here in Utah.”
Petersen has for years run an adoption law practice in Mesa, Arizona, that involves bringing women from the Marshall Islands to the U.S. to give birth, The Arizona Republic reported. Their babies are then adopted by U.S. parents, authorities said. Petersen charged $40,000 per adoption, according to his website.
Petersen illegally obtained services from Arizona’s Medicaid system for the women by falsely claiming they are Arizona residents, the indictment said. He also violated U.S. law prohibiting citizens of the Marshall Islands from traveling to the U.S. for adoption, according to the indictment filed in Maricopa County Superior Court.
Lynwood Jennet was also named in the indictment. Additional information about Jennet was not immediately available.
Petersen is in his second term as assessor following a special election victory in 2014 and re-election in 2016. He served nearly eight years as the assessor’s office representative to the Arizona Legislature and as the agency’s public information officer.
An investigation last year by the Hawaii news website Honolulu Civil Beat questioned the legality of adoptions Petersen administers through his work as a private adoption attorney.
FAYETTEVILLE, Ark. (AP) — An elected official in Arizona accused of running a human smuggling scheme that brought pregnant women from the Marshall Islands to the U.S. has pleaded not guilty to federal charges in Arkansas.
Authorities say Maricopa County Assessor Paul Petersen illegally paid the Pacific island women to have their babies in the United States and give them up for adoption.
After entering his plea in Fayetteville, Arkansas, on Tuesday, Petersen was released on $100,000 bond and ordered to wear an ankle monitor.
Petersen’s trial in Arkansas on human smuggling and adoption fraud charges is set for Dec. 9.
He also faces charges in Arizona and Utah.
He entered his plea a day after the Maricopa County Board of Supervisors voted to suspend him without pay for up to 120 days.
In a legislative session that saw a record amount of bills filed in both chambers, some measures promised before or even during the session never saw the light of day.
Efforts to allow county boards of supervisors capability to successfully remove the county treasurer or assessor, remove oversight of the state’s Empowerment Scholarship Account program from the Department of Education in favor of the Treasurer’s Office, and even a ballot referral to legalize adult-use marijuana rather than the initiative that would accomplish the same feat all never received a sponsor.
Rep. Anthony Kern, R-Glendale, said in October that he would introduce a measure allowing boards of supervisors to remove by a two-thirds vote an elected county assessor (and treasurer) who are under criminal indictment, which came in light of the indictment of former Maricopa County Assessor Paul Petersen that same month.
Kern said he didn’t file it after all because he didn’t want to rush things and it didn’t seem like a necessary bill once Petersen resigned.
The current law only allows a board of supervisors to suspend those two elected positions for up to a period of 120 days and makes things complicated in terms of an expulsion.
Kern’s seatmate in the upper chamber, Sen. Paul Boyer, R-Glendale, did not fulfill his promise to sponsor an effort that would create a pay cap for city employees. In what started as an announcement on Twitter over frustrations with his own city government resulted in nothing.
Prior to the start of the legislative session, Boyer said he wanted to limit nearly all city employees from earning more than the governor, whose salary is $95,000. Glendale City Manager Kevin Phelps currently makes $229,500, according to The Arizona Republic’s salary database, which is already nearly 2.5 times the limit Boyer wants to install.
A beef with Phelps is a prime reason Boyer planned to introduce this legislation in the first place. He and Phelps didn’t see eye to eye when it came to covering cancer treatment for firefighters in the city, a fight Boyer has been passionate about for years.
“I don’t think anybody could say with a straight face that bureaucrats who are systematically not following the law deserve to get paid more than the governor,” Boyer said at the time.
In that same chamber, Sen. Sylvia Allen, R-Snowflake, told her colleagues on the floor she had concerns over how the Arizona Department of Education was running the state’s Empowerment Scholarship Account program. Not a new fight by any means, but this latest blow was a direct result of the department mistakenly providing records that were not properly redacted.
Allen said early in the session that the state Treasurer’s Office under Republican Kimberly Yee should have oversight of the ESA program. Neither Allen nor any other legislator sponsored an effort to give the Treasurer’s Office control, but on February 26. Allen amended her ESA bill to give partial oversight of the program to the State Board of Education.
A different promise made before the session began, but not from a lawmaker, was the Arizona Cannabis Chamber of Commerce launching its own attempt to legalize adult-use recreational marijuana, with plans to have the Legislature send it to the ballot.
It was an idea many in the marijuana industry didn’t take seriously when it was announced since there did not seem to be an appetite to have lawmakers legalize marijuana, let alone have them send it to the ballot where it would be voter protected, a concern legislators have expressed many times.
With its close ties to lobbyist Brett Mecum, all eyes shifted over to Sen. David Gowan, R-Sierra Vista, to sponsor the referendum, since Mecum pushed Gowan’s marijuana testing bill in 2019.
The Maricopa County Board of Supervisors voted unanimously today to suspend County Assessor Paul Petersen without pay on the grounds he’s in federal custody in Arkansas and can’t serve.
Board of Supervisors Chairman Bill Gates said they sent Petersen a letter before the vote asking him to provide any sort of proof that he could still do his job. They also asked why and how more than 1,000 documents relating to his adoption business came to be on his county computer. That information was provided to the Board through an internal audit that should be made available to the public later today.
Gates said Petersen did not respond to their letter.
Arizona authorities arrested Petersen in early October in connection with indictments in Arizona, Utah and Arkansas on allegations he ran an illegal adoption scheme.
The process to appoint an interim County Assessor has begun, but Gates did not say how long it would take before they name Petersen’s temporary replacement, just that it would not be done today.
Petersen’s lawyer, Kurt Altman, previously told 12 News that Petersen has no plans to resign even though Gov. Doug Ducey, the entire Board of Supervisors and others have called on him to do so. Altman did not immediately respond to a request for comment today.
Gates said Petersen or his lawyer can now opt to appeal the decision.
“We will address that if it happens,” Gates said.
The Board chairman did not say whether the county plans to change the locks or remove Petersen’s access to the garage in order to keep him off the premises.
According to the state statute used to suspend the county assessor or treasurer, the Board of Supervisors may ask the County Attorney to seek the person’s removal from office after suspension by way of a grand jury.
Fields Moseley, a county spokesman, told Arizona Capitol Times that the Board and newly-appointed County Attorney Allister Adel, who was in attendance at today’s vote, have discussed all legal options, including the possibility of removing Petersen via a grand jury, but that she has not yet been asked to do so.
A spokeswoman for Adel could not comment on if Adel was asked either.
Investigators tasked by Maricopa County Officials to investigate Maricopa County Assessor Paul Petersen found no evidence he “neglected” his duties.
However, they said it’s up to county supervisors to determine whether his refusal to cooperate in the probe and his alleged misuse of county resources amount to “neglect of duty.”
“The ultimate issue the board must decide is whether Mr. Petersen’s conduct amounts to ‘neglect of duty’ within the meaning of [statute]. As discussed above, we did not find evidence that Mr. Petersen failed to fulfill any particular statutory obligations of the County Assessor,” the investigators concluded in their report, a copy of which was obtained by the Arizona Capitol Times.
Attorney Kory Langhofer, who represents Petersen, said the report affirms his client’s argument that his suspension from office has no basis.
The Maricopa County Board of Supervisors had suspended Petersen without pay for 120 days on the grounds that he was in federal custody in Arkansas and could not serve.
Officials then asked former Attorney General Grant Woods to oversee the work of two private law firms hired to investigate whether Petersen neglected his duties.
Petersen is challenging his suspension, and supervisors must now weigh their decision against the investigators’ conclusions.
“While Mr. Petersen’s conduct with respect to his misuse of county resources may give rise to criminal charges or may form the basis for removal under ARS 38-341, the board must decide whether that conduct, as well as his absence from office for twenty days and his failure to cooperate with this investigation, amounts to ‘neglect of duty,’” the investigators said in the report.
They said while county supervisors may suspend Petersen for “defalcation or neglect of duty,” the statutes do not define “defalcation” or “neglect of duty,” although other authorities, including case law from Arizona courts, have helped to define those terms.
They noted that elected officials “may not be disciplined as county employees for violating policies.” County employees, on the other hand, are subject to disciplinary actions, including termination.
“Discipline aside, however, no one we spoke with expressed the view that elected officials are free to disregard County policies, and we do not believe that to be the case,” investigators said in the report.
In a statement, the county insisted that the report “confirms” the county supervisors’ grounds for suspending Petersen.
“If the information exonerated Mr. Petersen, the Board of Supervisors would cancel the hearing. That is not the case,” the county said.
The county pointed to findings in the report – that Petersen called adoption agencies and doctor’s offices on taxpayer time; that he stored “sensitive, highly personal ultrasound images and medical records” on his official computer “without encryption or even the most rudimentary safeguards” for privacy; and, that his computer also included documents and wire transfers associated with individuals identified in criminal indictments.
Among other findings, the report said people interviewed generally gave positive impressions of Petersen’s leadership.
“Although relatively hands-off in style, he understands the work of the office, sets a clear vision and direction for the Office, and delegates day-to-day operations to staff, particularly [Chief Deputy Assessor Tim] Boncoskey,” the report said, summarizing the interviews.
Langhofer said the report bolsters his client’s case.
“No matter how badly the Board of Supervisors wishes to overturn the decision of Maricopa County voters, facts are stubborn things and today’s report confirms what we have been saying for weeks: Paul Petersen is the duly elected Assessor – and by all accounts, he has performed his duties well,” Langhofer said in a statement. “Given the conclusions of the attorney paid by the county, we’re even more confident that a neutral tribunal would rule in our favor.”
Petersen stands accused in three states of running an illegal adoption scheme involving Marshallese women. He is free on bail after being booked into federal custody in Arkansas. His suspension appeal hearing is set for December 11.
Woods earlier said he wasn’t sure if less than a month’s time to investigate the matter was sufficient to conduct a “thorough” inquiry.
The investigators sought to interview Petersen, but said the latter put roadblocks to effectively rebuff their request.
“The board will need to decide whether sustained misuse of county resources while at the Office of the County Assessor and failing to cooperate with a county-authorized investigation means that Mr. Petersen neglected his duties as a county official,” their report said.
The investigators made attempts to interview Petersen on Nov. 19 and did not receive any response from him or his legal counsel by Nov. 25.
They also asked Petersen for a written statement and to return his county computer. The next day Petersen’s attorneys responded that he will have the laptop ready soon, the report said.
The report said Petersen would only agree to an interview with the caveat that Maricopa County release records about how much time other county elected officials spend in their offices.
“By placing these wide-ranging conditions on Mr. Petersen’s interview, he effectively refused our request. He also never submitted any information to us in writing. As a result, Mr. Petersen has provided no explanation as to why he maintained hundreds of documents relating to his private law practice and adoption business on the county network,” the report said.
Arizona needs some sort of law or procedure to oust elected county officials as necessary, Gov. Doug Ducey said Tuesday.
But the governor does not favor turning some of these offices into appointed positions.
Ducey repeated his call on Maricopa County Assessor Paul Petersen to resign following his arrest stemming from his operation of an international adoption business.
He faces charges in Arizona of defrauding the state by having pregnant women who were willing to give up their babies flown from the Marshall Islands to Arizona and then enrolling them in the state’s Medicaid program. There are similar charges pending in Arkansas and Utah as well as federal charges of human smuggling.
Petersen remains in federal custody, meaning he has not been to his county office since the indictments were announced earlier this month.
There is a state law which allows county supervisors to suspend the assessor – and the treasurer – for “defalcation or neglect of duty.” The former refers to misappropriation of funds which is not an issue; the latter could be a factor if Petersen does not show up at work.
Even that law, however, has limits, the most notable being that any suspension can last only 120 days unless there is a move to remove that person based on a criminal conviction.
“I have called on Paul Petersen to resign,” Ducey said Tuesday. “The people’s business, of course, needs to be done.”
There are remedies in law when the person at the center of a probe is a state official. That includes the ability of the Legislature to impeach the governor or any other statewide elected official and all Supreme Court, Court of Appeals and superior court judges.
And lawmakers themselves are subject to expulsion by their colleagues. There is, however, no similar remedy for county elected officials.
“What happened to Paul Petersen is a real anomaly in terms of municipal government,” Ducey said. “There likely should be a remedy in the law to fix a situation like this.”
The governor had no specific idea of how best to do that.
“I think there’s a couple of different ways to solve it,” he said.
“It’s probably best done with some coordination between state, municipal and city people talking about what a remedy would be in this type of once-in-a-generation type situation,” Ducey continued. “But it is a situation we have to address.”
The governor did not specify what kind of actions he believed should trigger removal. And press aide Patrick Ptak refused to answer any questions to clarify Ducey’s views.
None of this would be necessary if county “row officers” like the attorney, sheriff, assessor and others were selected the same as they are in cities: by the elected members of the city council. That empowers council members to remove those officers for neglect or abandonment of their jobs.
Ducey said that’s an interesting question.
“I have an opinion on all of this and how we could restructure and make it more effective or more efficient,” he said. But he wouldn’t provide any hints to his thoughts.
“That’s not my role as governor,” Ducey said. “It’s to be the chief executive of the state government.”
Still, Ducey made it clear he was not willing to lead any sort of charge to change the selection process.
“I’m not looking to take the vote away from the people,” he said.
“That’s how the framers of the Arizona Constitution set it up in 1912,” the governor explained. “And it’s my job to then execute the laws in that framework.
And Ducey said anyone who wants to alter that is “more than welcome to go to the ballot.”
There already is one legal option: recall.
That’s what happened in 1994 when Pima County voters ousted Alan Lang in the middle of his four-year term amid various allegations, including complaints of sexual harassment and a sharp increase in home valuations.
In the case of Petersen, however, recall appears not to be a realistic option. Given the time it would take to gather and verify the signatures, a recall election likely could not take place before the already scheduled August primary where the Republican assessor could be beaten by a challenger.
A woman who acknowledged helping a former Maricopa County Assessor Paul Petersen in an illegal adoption scheme involving women from the Marshall Islands was sentenced to two years in prison Tuesday.
Lynwood Jennet, 47, took part in submitting false applications for the birth mothers to receive state-funded health coverage, even though none of the women resided in the state. She had pleaded guilty to conspiracy and theft charges for her role at Petersen’s direction, a Republican who served as Maricopa County assessor for six years.
Petersen worked as an adoption attorney before resigning his elected post and pleading guilty in three states to crimes related to the scheme. The health care fraud committed by Petersen and Jennet totaled $814,000, authorities said.
Petersen is in prison serving a total of 11 years for a conviction in Arkansas for conspiring to commit human smuggling and a health care fraud conviction in Arizona.
Additionally, Petersen was sentenced to one to 15 years in prison in Utah for a human smuggling conviction. The Utah sentence, which leaves it up to the state’s parole board to decide how long a person actually serves, is to be served concurrently, meaning Petersen could be done with his Utah sentence by the time he completes his other sentences, or have up to four more years.
Authorities say Petersen illegally paid women from the Marshall Islands to come to the United States to give up their babies in at least 70 adoption cases over three years. Citizens of the Marshall Islands have been prohibited from traveling to the U.S. for adoption purposes since 2003.
Jennet was accused of serving as a point of contact for people in the Marshall Islands who looked for pregnant women interested in coming to the United States to give up their children for adoption. Investigators have said Jennet relayed information about birth mothers to Petersen, who bought the women passports and plane tickets to Phoenix.
Her attorney said Jennet, a native of the Marshall Islands, cooperated with investigators.
Maricopa County Attorney Allister Adel has hired the attorney who botched an investigation into the Fiesta Bowl a decade ago to oversee a probe of County Assessor Paul Petersen.
Adel’s office announced that former Attorney General Grant Woods will oversee the work of two private law firms hired to investigate whether Petersen neglected his duties.
Petersen stands accused in three states of running an illegal adoption scheme involving Marshallese women, and the Maricopa County Board of Supervisors suspended him Oct. 28 for 120 days for neglecting his duties. He was in federal custody in Arkansas at the time, but he is free on bail.
Woods, in 2009, conducted a week-long investigation into a campaign-finance scandal involving Fiesta Bowl employees and found no credible evidence of wrongdoing. But when state and federal investigators got involved, several employees of the college-football organization ended up pleading guilty to various misdemeanors and felonies, including former Fiesta Bowl CEO John Junker, who spent eight months in prison.
Woods has said in a subsequent interview in 2017 with Tempe-based journalist Nancy Puffer that the Fiesta Bowl manipulated him.
“At the end of the day I had lots of excuses, but I was hired to see if there was a problem, and I didn’t see it,” Woods said.
Petersen’s criminal defense attorney, Kurt Altman, questioned whether it is necessary to have Woods oversee the neglect-of-duties investigation because one of the firms tasked to investigate the county assessor, Stein Mitchell Carey Chapman, is a seasoned and respected outfit that specializes in criminal defense.
Woods will be providing regular updates to Adel.
“Sounds like a good gig if you can get it,” Altman said.
Additionally, Cosmich Simmons & Brown, a litigation firm, will look into all of Petersen’s documents found on his county computer in an internal audit. The audit found that only five percent of those documents pertained to official county business.
Kory Langhofer, Petersen’s attorney who is defending him in the suspension matter, said Woods has already judged Petersen.
Langhofer provided Arizona Capitol Times a tweet from Oct. 9 in which Woods congratulated Attorney General Mark Brnovich for indicting Petersen and “liked” a tweet stating Petersen should learn to enjoy prison.
Langhofer said Woods’ social media activity reveals a bias against Petersen and makes him the least qualified investigator.
He said the verdict is already in on Petersen’s suspension.
“The Board of Supervisors’ premade conclusions—which they’ve already announced and voted to approve—will be dressed up and reprinted on Grant Woods’s letterhead,” Langhofer said.
The Board of Supervisors voted last week to have a suspension appeal hearing on December 11.
Woods laughed at hearing Langhofer’s comments and denied having any bias against Petersen. He also denied that the Board of Supervisors have already predetermined the investigation outcome as Langhofer suggests.
“The Board suspended him and they need to review the suspension and what steps to take going forward. They need to know more about the Assessor’s Office and the job he’s done. It’s completely separate [from the criminal charges],” Woods said.
Jennifer Liewer, an Adel spokeswoman, said Woods’ overall reputation and experience is why Adel considered him and why she thinks he is qualified.
“[Woods] is a well-respected member of the community,” Jennifer Liewer, a county spokeswoman, said. “He has conducted hundreds of investigations as attorney general and overseen many … we believe the team we compiled will do a thorough job and will be able to provide Adel and the Board of Supervisors with a thorough investigation.”
Both Adel and Woods also have a history with Sen. John McCain. Adel interned for McCain while in college and Woods was McCain’s Chief of Staff when he was a congressman. Liewer said that history was not considered when choosing the former AG to oversee the investigation.
Woods said he was approached last week to begin overseeing the investigation, but still has not seen a contract yet for how much he will be paid for the work, which is expected to take less than one month.
He said the short timeframe will be challenging, but that the majority of the work will be conducted by Lee Stein of Stein Mitchell Carey Chapman.
Woods was vague on whether there is enough time before the Dec. 11 hearing to conduct a thorough investigation.
“It depends on your definition of thorough,” he said. “We’re going to do what we’re going to do and give [the Board of Supervisors] what we have and that’s up to them.”
Prosecutors say Petersen paid the Marshallese women up to $10,000 to come to the United States, where they were crammed into houses to wait to give birth and provide their babies for adoption.
Petersen faces charges in Arizona, Utah and Arkansas that include human smuggling, sale of a child, fraud, forgery and conspiracy to commit money laundering.
Petersen has now pleaded not guilty in courts in Arkansas, Arizona and Utah. And next month, he is scheduled for his next court dates in Arkansas on Dec. 5 and Arizona Dec. 19.
Editor’s note: This story has been revised to include direct quotes and paraphrased statements from Grant Woods.
Perennial candidate Rodney Glassman is likely to extend his election losing streak, this time to Eddie Cook, the appointed Maricopa County Assessor. Glassman has 47% of the vote with Cook holding 53%.
Glassman previously applied for the appointment to the county assessor position after Paul Petersen, the embattled lawyer, resigned following an illegal adoption scheme involving the Marshall Islands. Petersen has since pleaded guilty to several felonies and faces prison time.
Glassman lost out to Cook, a former Gilbert Town Councilman, for the appointment in February. Before that Glassman wanted the appointment for the County Attorney job that went to Republican Allister Adel and before that he lost in his bid for the Arizona Corporation Commission in 2018.
Glassman’s interest in a political office has become sort of a running joke at the Capitol of what he will run for next.
Kirk Adams, Gov. Doug Ducey’s former chief of staff, took a shot at Glassman on 12 News about all the seats he seeks.
“I think Rodney Glassman will make a great corporation commissioner. I mean county assessor. I mean county attorney. I mean U.S. senator,” he said.
Despite his loss, Glassman raised and spent an unusual amount of money for a seat that typically does not gain much attention in a given election year. But Petersen put the race on the radar of voters.
Days before the election, Maricopa County Board of Supervisors Chairman Clint Hickman penned an op-ed in the Arizona Republic criticizing Glassman for not knowing basic functions of the Assessor’s Office.
“[Glassman] shows not only a basic misunderstanding of the job for which he is running, but also the role of the board of supervisors,” Hickman wrote. He concluded the piece saying Glassman’s “lack of knowledge” shows he and fellow supervisors were right to appoint Adel and Cook to their respective positions over Glassman.
If Cook holds his lead, he will face Democrat Aaron Connor in a county that’s increasingly turning more blue with each election
Maricopa County Assessor Paul Petersen wants medical marijuana dispensaries to pay personal property taxes, and the county’s dispensaries say they’re happy to comply.
But they’re not happy with the way Petersen is going about it, according to Kevin DeMenna, lobbyist for the Arizona Dispensary Association.
Since Arizona voters legalized medical marijuana in 2010, most dispensary owners have been unaware that they owe taxes on business personal property, the value of which businesses are required to remit annually to the state. Kevin McCarthy, president of the Arizona Tax Research Association, said that covers everything in a business’ building that isn’t nailed to the floor: Computers, display cases, equipment, or other movable items.
According to a press release from the assessor’s office, Petersen “will be placing medical marijuana businesses on the personal property roll for the first time this Friday. This will include applicable penalties for the many medical marijuana businesses who fail to report their property as required by state law.”
Petersen will announce those penalties and the impact of assessing the business personal property at a press conference Thursday morning.
DeMenna said there’s no conspiracy by dispensaries to not pay taxes, just confusion amidst a new industry in the state.
“Arizona’s business personal property taxes are some of the most byzantine and complex aspects of Arizona’s tax system,” he said. “Taxation through press conference is not ideal. We have every intention of being in full compliance, and in fact, expect that with future dialogue and a better understanding of the system, we will be in full compliance immediately.”
Earlier this year, dispensary owners were sent notices and forms from the assessor’s office asking them to put a value on their business personal property — while it’s the responsibility of the state to assess real property, business owners are responsible for valuing the rest, according to McCarthy.
In conversations with dispensary owners, DeMenna said it’s possible some have received such form letters in the past, but most are unaware.
“No one seems to know about this. No one,” he said. “We understand that only about a dozen (dispensaries) have paid. (The assessor’s office) think that there’s more than a hundred out there. We will be in full compliance.”
McCarthy said it’s not uncommon for a business to fail to pay those taxes based on honest confusion.
“They’re not the first entity that didn’t realize to pay their personal property tax,” he said. “Now, it is their obligation to know. In most instances in the tax realm, whether its property taxes, sales taxes, or income taxes, it’s the individual’s or the business’ responsibility, right, to know what their tax obligations are.”
Depending on how much personal property a dispensary owns, they may not owe anything at all in taxes. State law exempts the first $124,000 in business personal property from taxation, according to McCarthy. However, if a dispensary owner runs multiple locations, the exemption only applies to one dispensary, not several locations, McCarthy said.
The Maricopa County Board of Supervisors voted unanimously Friday to appoint Gilbert Town Councilman Eddie Cook as county assessor to replace Paul Petersen, his indicted predecessor.
Cook is a Republican who was one of 11 applicants for appointment as assessor, a countywide officer responsible for setting property tax valuations.
Cook’s appointment runs through Dec. 31 but he said he plans to run in this year’s 2020 primary and general elections for a four-year term.
Petersen resigned in January under pressure after being indicted last October on fraud charges involving an adoption operation involving pregnant women from the Marshall Islands.
Petersen has pleaded not guilty. He worked as an adoption attorney while serving as county assessor.
County officials say Cook will be sworn in as assessor after the Gilbert Town Council accepts his resignation.
Cook said Friday he will resign at his final council meeting on February 18.
Cook has served on the Gilbert Town Council since 2011 while also working for a technology company.
The county supervisors suspended Petersen for 120 days in late October, and a temporary replacement ran the office during that period.
A former Arizona politician who admitted running an illegal adoption scheme in three states involving women from the Marshall Islands was sentenced in Arkansas to six years in federal prison. It was the first of three punishments he’ll face for arranging adoptions prohibited by an international compact.
Paul Petersen, a Republican who served as Maricopa County Assessor for six years and also worked as an adoption attorney, illegally paid women from the Pacific island nation to come to the U.S. to give up their babies in at least 70 adoptions cases in Arizona, Utah and Arkansas, prosecutors said.
Marshall Islands citizens have been prohibited from traveling to the U.S. for adoption purposes since 2003 and prosecutors said Petersen’s scheme lasted three years.
Judge Timothy Brooks, who imposed the sentence from Fayetteville, Arkansas, said Petersen abused his position as an attorney by misleading or instructing others to lie to courts in adoptions that wouldn’t have been approved had the truth been told to them.
The judge said Petersen turned what should be joyous adoption occasions into “a baby-selling enterprise.” He also described Petersen’s adoption practice as a “criminal livelihood” and said he ripped off taxpayers at the same time he was elected to serve them.
Brooks rejected Petersen’s claims that he initially thought he was acting within the bounds of the law, but later realized what he was doing was illegal.
“You knew that lying and making these false statements to immigration officials and state courts was wrong,” said Brooks, who gave Petersen two years longer in prison than sentencing guidelines recommended.
Appearing by videoconference, Petersen told the judge that his actions in the Arkansas case weren’t indicative of who he is as a person and offered an apology to any birth mothers who felt disrespected by his treatment of them.
Petersen said he was horrified to learn that subordinates he did not name during the hearing had mistreated birth mothers, though he claimed he didn’t know about it at the time and did not condone it.
“I take responsibility for my lack of oversight,” said Petersen said.
Petersen, who earlier pleaded guilty to conspiring to commit human smuggling in Arkansas, faces sentencing next month for convictions in Utah and Arizona.
Federal prosecutors have said the former assessor — responsible for determining property values in the county that encompasses Phoenix — defrauded state courts, violated an international adoption compact and took advantage of mothers and adoptive families for his own profit. The money Petersen made from the adoption scheme helped pay for his lavish lifestyle, including expensive trips, luxury cars and multiple residences, prosecutors said.
Prosecutors said the passports of some birth mothers were taken away to prevent them from leaving the United States and that they were threatened with arrest if they tried to back out of adoptions. Petersen’s attorneys vigorously disputed that their client played any role in keeping some of the mothers’ passports, much less condoned it.
He is scheduled to be sentenced on Jan. 22 in Phoenix for submitting false applications to Arizona’s Medicaid system so the mothers could receive state-funded health coverage — even though he knew they didn’t live in the state — and for providing documents to a county juvenile court that contained false information. Petersen has said he has since paid back $670,000 in health care costs to the state of more than $800,000 that prosecutors cited in his indictment.
His sentencing in Utah on human smuggling and other convictions is set for Jan. 20.
Earlier in his life, Petersen, who is a member of The Church of Jesus Christs of Latter-day Saints, had completed a proselytizing mission in the Marshall Islands, a collection of atolls and islands in the eastern Pacific, where he became fluent in the Marshallese language.
He quit as Maricopa County’s assessor in January amid pressure from other county officials to resign.
Petersen has said he carried out hundreds of legal adoptions after he discovered a niche locating homes for vulnerable children from the Marshall Islands and helping needy mothers who wanted a more stable family life for their children.
Petersen in a letter to the Arkansas judge several ago said he is now ashamed, as a fiscal conservative, for imposing the pregnancy labor and delivery costs on Arizona taxpayers.
Some families whose adoptions were handled by Petersen wrote letters to the judge in support of the former assessor.
Paul Petersen, the recently suspended Maricopa County Assessor, today pleaded not guilty for the second time in two weeks on allegations that he ran a child smuggling ring.
He also hired a prominent political lawyer to argue that his suspension is unconstitutional.
Petersen showed up to court in Maricopa County exactly one week after his first arraignment in federal court in Arkansas.
Authorities accused Petersen of paying women from the Marshall Islands to deliver their babies in the U.S. and of organizing the children’s adoption to American families. He is charged with smuggling and adoption fraud in Arkansas and Utah, and with defrauding the Arizona Health Care Cost Containment System in Arizona.
His lead attorney, Kurt Altman, said they are preparing for the next court date in Arkansas on December 5 and Arizona on December 19, though he added those dates could change.
The Maricopa County Board of Supervisors voted unanimously on October 28 to suspend Petersen for 120 days, the full suspension period allowed in statute. He will not be paid four months of his $77,000 salary during his suspension. The board subsequently appointed Bill Wiley, the county’s former director of flood control and air quality, as acting administrator of the Assessor’s Office. Wiley will earn nearly twice as much as Petersen would per hour.
Altman called the suspension “outside [the board’s] authority” and deferred questions to Petersen’s new lawyers, Kory Langhofer and Tom Basile, who were also present after the hearing.
Langhofer, a prominent GOP attorney who represented the Arizona Republican Party under Chairman Jonathan Lines, said the board’s decision to suspend Petersen is unconstitutional.
“Nobody is saying Paul Petersen didn’t do his job as county assessor very well,” Langhofer said, adding the position of assessor is equal to the supervisors, so neither of them should be able to kick out the other from office.
“Everyone agrees he did the job, he showed up, he did what needed to be done. That’s not the issue at all,” Langhofer said.
The Arizona Republic reported that Petersen only spent 53 days at his county office during the year, citing parking records, and worked on an average of four hours each day. The county has since revoked Petersen’s access to the garage and his office due to his suspension.
On top of only showing up for 53 days, an internal audit showed several documents on Petersen’s county computer pertaining to his adoption business. Only five percent of the documents found pertained to county business at all.
Langhofer said he plans to write a letter to the Board of Supervisors to handle things “amicably,” and if things cannot be settled that way, then his client will take the matter to court.
An elected official in metro Phoenix resigned Tuesday, months after being charged with running a human smuggling operation that paid pregnant women from the Marshall Islands to give up their babies in the U.S.
The resignation of Maricopa County Assessor Paul Petersen came after leaders in the one of the nation’s most populous counties suspended and pressured him to resign after his arrest nearly three months ago. The county’s governing board voted in late December to start the process of removing Petersen, who also works as an adoption attorney.
He is accused of illegally paying women from the Pacific island nation to come to the United States to give up their babies in at least 70 adoption cases in Arizona, Utah and Arkansas over three years. Citizens of the Marshall Islands have been prohibited from traveling to the U.S. for adoption purposes since 2003.
In a statement released by his attorneys, Petersen proclaimed his innocence and said he never neglected his duties as assessor, responsible for determining the property values in the county. The Republican said county officials and news organizations presumed he was guilty.
“My focus now turns to defending the allegations against me,” Petersen said.
He is charged with human smuggling in Utah and Arkansas and defrauding Arizona’s Medicaid system by $800,000 by submitting false applications for the women to receive state-funded health coverage.
Authorities say the women who went to Utah to give birth received little or no prenatal care. They also said Petersen and his associates took passports from the pregnant women while they were in the U.S. to assert more control over them.
Petersen has pleaded not guilty to the charges in Arizona and Arkansas. He hasn’t yet entered a plea in Utah.
His attorneys have said Petersen ran a legal adoption practice and has been vilified before his side of the story comes out. They had argued that the county governing board had no basis for suspending him.
County Supervisor Steve Gallardo said Petersen has only himself to blame for his actions. “He took advantage of these vulnerable women for his own personal greed, and he did it on county time,” Gallardo said.
Kory Langhofer, one of Petersen’s attorneys, said his client had to choose between focusing his time and money on holding onto his office or preserving his liberty. “It’s an unfair choice, but he has ultimately chosen to focus on the criminal allegations, rather than his job,” Langhofer said.
Petersen previously rejected calls to resign and was fighting his 120-day unpaid suspension.
Thousands of files related to his adoption business were discovered on his government laptop, cementing the board’s push to remove him. Content recovered on the laptop included text messages of pregnant women being threatened when they changed their minds about giving up their newborns.
Petersen, who was paid $77,000 a year in his government job, won a 2014 special election to be assessor and was re-elected in 2016. His term was scheduled to expire at the end of the year.
As a member of The Church of Jesus Christs of Latter-day Saints, he completed a proselytizing mission in the Marshall Islands, a collection of atolls and islands in the eastern Pacific.
Lynwood Jennet, who was accused of helping Petersen in the scheme, pleaded guilty last month in Arizona to helping arrange state-funded health coverage for the expectant mothers, even though the women didn’t live in the state. She has agreed to testify against Petersen.
A prostitution camp in the Marshall Islands provided many of the birth mothers caught up in former Maricopa County Assessor Paul Petersen’s allegedly illegal adoption business, according to statements attributed to his co-defendant in a warrant to seize his assets.
When she was arrested in August, Lynwood Jennet, Petersen’s co-defendant in his criminal case and his fixer in the Marshall Islands, told police that the majority of women she had recently helped Petersen recruit came from a prostitution camp where girls as young as 15 or 16 did sex work in exchange for food and housing.
Jennet said when the girls at the prostitution camp would get pregnant, she would receive a call (the name of the caller was redacted in the documents) and she would contact Petersen.
“Lynwood was asked who runs the camp, Lynwood said it was the government or businessmen,” Department of Public Safety Detective Samuel Hunt, who interrogated Jennet following her arrest, said in the sworn affidavit, which was recently unsealed.
Jennet described the camp as a place where “young girls wait for fishermen to come and dock to do shopping and what not.”
The camp was on the main island of the Marshall Islands, a small island country in the Pacific Ocean where Petersen did his Mormon mission and later ran his adoption business in violation of a treaty between the U.S. and the Marshall Islands that allows islanders to visit the U.S. for any reason without needing a visa, except they cannot come to the U.S. to offer a baby for adoption.
That provision of the treaty exists because of a long history of exploitation of Marshallese women by American adoption agencies. Petersen charged upwards of $35,000 for his adoption services, and paid the mothers, through a third party, around $10,000 per baby, though he would often skim expenses out of the final payments, the affidavit stated.
Petersen stands accused in three states of running a human smuggling scheme that brought pregnant women from the Marshall Islands to the U.S.
Months before news broke about Petersen’s multi-state indictment, investigators built a tax and Medicaid fraud case against Jennet, who then spilled the beans on the details of her relationship with Petersen in an interrogation room in Mesa with no attorney present.
According to the affidavit, she was informed of her Miranda rights and she asked investigators what would happen if she refused to talk until an attorney was there. Investigators said they would end the interview and asked her to decide if she wanted to proceed.
The records show she sat in silence for a few minutes and agreed to talk without an attorney present and hand over her cell phone so the officers could have access to her messages to Petersen and his paralegal, Megan Wolfe.
During the interrogation, Jennet detailed the work she did for Petersen and the pregnant women, which included driving them around to appointments, interpreting and getting them food and supplies. Jennet was paid handsomely for her services, earning more than $200,000 between 2016 and 2018, including $103,000 in 2018 alone. She did not file individual income tax returns during that time. The documents state if she had filed those taxes, her income would have been too large to qualify for the state’s Medicaid program, Arizona Health Care Cost Containment System.
In the conversation, Jennet relayed the information about her coming to America in 2006. She moved from the Republic of Marshall Islands to Arkansas in 2006, but said she was not pregnant at the time. She said she had 11 children, and that she used Petersen to place two of the three children she offered for adoption. The records state after she gave up the children for adoption, friends and other families reached out to her to find out who she used, thus beginning her contracting work for Petersen.
Jennet told investigators that at the time of the questioning, there were four birthmothers staying at the fourplex Petersen owned in Mesa and one of the women was pregnant from being raped, which she said was investigated by the Republic of Marshall Islands.
Department of Public Safety agents originally became aware of the adoption scheme from a potential adoptive parent who grew suspicious of Petersen’s operation.
Petersen, nor his attorney, Kurt Altman, could be reached for comment on his potential involvement and knowledge that the women came from a prostitution camp.
Since the indictment in October, Petersen was suspended from his elected position and subsequently resigned in January. He still stands trial in three states on 62 felony counts, 32 in Arizona alone. Petersen’s Arizona trial was postponed as of March 10.
Investigators also discovered that Petersen is the statutory agent for Democratic former Sen. Ed Ableser’s company, Ableser Family Counseling.
While the documents didn’t shed light on what, exactly, Petersen’s role was with Ableser’s company, Arizona Corporation Commission records show that when he organized the limited liability company in 2009, while he was a state representative, Ableser used Petersen as his statutory agent.
A statutory agent is essentially a business’ legal point of contact, and agrees to accept paperwork in case the business is sued.
Ableser didn’t return a call on March 26 to answer questions about how the two knew each other — Petersen wasn’t in elected office then– and the extent of Petersen’s involvement in his business. Ableser recently had his professional counseling license revoked by the Board of Behavioral Health Examiners after he violated state statute by engaging in “conduct or practice that is contrary to recognized standards of ethics in the behavioral health profession or that constitutes a danger to the health, welfare or safety of a client as it relates to the following section of the ACA Code of Ethics.”
The complaint states he kept deficient records from a husband and wife who were sent to his counseling through their church, including by not obtaining a consent for treatment form from the couple. He signed a consent agreement with the board last November stating that he will stop practicing counseling and not apply for a new license for at least five years.
Arizona Capitol Times, in conjunction with the ASU First Amendment Clinic, intervened in the Petersen case to unseal search and seizure warrants and other corresponding records.
The clinic is designed to give law students hands-on experience helping journalists flex their First Amendment rights and hold the government accountable.
The students — in the case of the Petersen warrants, Bobby Niska and Olivia Otter — are fully authorized by the Arizona Supreme Court to represent clients and practice law under the supervision of Gregg Leslie, the clinic’s director.
The four warrants listed in the state’s discovery were sealed except for one, and Niska and Otter made the argument that all warrants are presumed open in Arizona.
The Attorney General’s Office, which is leading the investigation into Petersen, did not contest the unseal motion.
The seizure warrant and probable cause form provided details of the Petersen investigation and justification for seizing his assets, which included homes and more than $1 million in cash. The records were unsealed and our reporters received a redacted copy on March 26.
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