An Arizona lawyer accused of illegally enticing women to give up their babies was released from custody Tuesday on $100,000 bond after pleading not guilty, a federal magistrate ruled.
Paul D. Petersen, 44, of Mesa, Ariz., posted the bond on a 19-count federal indictment and was required to both submit to GPS monitoring and pay the costs. He was prohibited by U.S. Magistrate Erin L. Wiedemann from practicing adoption law in any state, from doing business with longtime associate Bright Star Adoptions of Mesa, and from having contact with associates charged federally or by states in the investigation or with the paralegal who represented his firm in Fayetteville, Megan Wolfe.
Federal charges faced in Arkansas by Paul Petersen of Arizona:
- One count of conspiracy to smuggle illegal aliens for commercial advantage and private financial gain
- Four counts of aiding and abetting in alien smuggling for commercial advantage and private financial gain
- Seven counts of wire fraud
- Five counts of mail fraud
- One count of conspiracy to commit visa fraud
- One count of conspiracy to commit money laundering
More charges could be added later, the U.S. Attorney said.
Source: Federal indictment
A preliminary Dec. 9 trial date was set with a pretrial hearing scheduled for Dec. 5. Wiedemann ordered the global positioning tracker to be placed on Petersen before he leaves.
The indictment accuses Petersen of paying pregnant Marshall Islanders to give up their children for adoption, paying their airfare to the United States for that purpose and then giving them airfare home, all in violation of a specific clause in a treaty with the islands’ government.
U.S. Attorney Duane “Dak” Kees estimated Petersen’s firm did about 30 such adoptions a year or more in Arkansas beginning in 2014 or earlier. He also did such adoptions in Arizona and Utah, according to state charges in those jurisdictions.
Wiedemann forebade Petersen from contacting any of the birth mothers he formerly represented or any of the adoptive parents he served or who had adoptions pending. His travel was restricted to going to and from Arizona, Utah and the federal Western District of Arkansas. He faces 62 charges in those jurisdictions — 19 federal counts in Arkansas, 32 state counts in Arizona an 11 state counts in Utah.
“Make no mistake. This case is the purest form of human trafficking,” Kees said in an Oct. 9 news conference about the indictment.
Neither Kees, Petersen nor Petersen’s defense attorneys had any comment after Tuesday’s hearing. Defense attorney Kurt M. Altman of Scottsdale, Ariz. confirmed Petersen posted bond in Utah and Arizona. Petersen went straight from the arraignment into the process of posting his federal bond, according to court proceedings.
Petersen appeared in court Tuesday afternoon shackled hand and foot and wearing a black-and-white-striped Washington County jail outfit with bright orange, plastic slippers.
The bond conditions were too light, said Melisa Laelan, a Marshallese language interpreter for regional courts and a longtime advocate for Arkansas’ Islander population. Northwest Arkansas has the second-largest concentration of Marshall Islanders in the U.S. behind Hawaii.
“It just adds another layer of disappointment,” said Laelan, who attended the hearing.
Petersen charged $35,000 an adoption, according to the indictment. Even subtracting legitimate costs, he was making so much money for so long a $100,000 bond comes at little cost, she said.
“He took advantage of these women and our culture,” which is very open and approving of adoptions, Laelan said. “Considering the magnitude of the charges, it struck me as a light amount.”
Also present in the audience was Andrea McCurdy, appointed attorney ad litem for the 19 birth mothers in Arkansas represented by Petersen at the time of his arrest Oct. 8. McCurdy had no comment after the hearing.
The courtroom was full, with an audience including two sketch artists contracted by out-of-state media and reporters from Arizona.
The federal investigation began three years ago when local bar associations told investigators something was amiss with the practices of adoptions handled by Petersen’s law firm, which has a mailing address and representatives in Fayetteville, Kees said. Investigators from Kees office traveled to the capital of the Marshall Islands, Majuro, in August.
“The Marshall Islands government is pleased with recent arrests and pending cases in U.S. courts of adoption lawyers and fixers who have, for a long time, solicited unwitting young pregnant women into giving away their children in return for cash or tickets to the U.S.,” said a statement from the Marshallese government approved by the country’s president, Hilda Heine.
The investigation isn’t over, Kees said. More people associated with the Petersen firm and with other firms with similar practices are under federal scrutiny, he said.
Petersen is also the elected county assessor of Maricopa County — Arizona’s most populous county. The county’s Board of Supervisors suspended Petersen on Monday. Their vote was unanimous. Under Arizona law, the board has the power to suspend an elected county official for up to 120 days for nonperformance of duty, according to the Arizona Republic newspaper.
Petersen is accused in Arizona of enrolling pregnant Marshallese women for that state’s Medicaid benefits for which they weren’t eligible. Only permanent Arizona residents are eligible under that state’s laws.
Petersen also faces 11 charges in Utah, including human smuggling, sale of a child and communications fraud. He posted a $150,000 bond in Utah, according to his attorney. He’s licensed to practice law in Arizona, Utah and Arkansas, according to court records. Petersen has also paid a $500,000 cash bond in Arizona, according to his attorney.
The would-be adoptive parents paid Petersen’s firm for the expectant mothers’ housing and food expenses. Petersen’s firm deliberately inflated those costs, the federal indictment says. For instance, adoptive parents paid lodging expenses for some mothers who were all staying in the family home of Maki Takehisa, 39, Petersen’s indicted co-conspirator, the indictment says. Takehisa is named in four of the 19 counts in the indictment. Housing and food expenses were minimal at the home, the indictment states.
Takehisa of 2006 Cardinal Drive in Springdale, who is Marshallese according to court records, faces one count each of money laundering and mail fraud. Takehisa also was charged earlier this year in U.S. District Court in Fayetteville with aiding and abetting alien smuggling, a violation of the Compact of Free Association with the Marshall Islands.
Marshall Islands citizens can travel to the U.S. under the compact, a treaty between the two countries. The U.S. administered the islands for years after World War II and used a portion of those islands for atomic bomb tests. Some of the rights extended to Marshall Islanders were a form of recompense for those tests, according to an interview last year with Eldon Alik, consulate general for the Marshall Islands, who has an office in Springdale.
Thirteen couples who were expecting adoptions soon are suing Petersen in Washington County Circuit Court. The legal tangle involved could take years to sort out, their attorney, Josh Bryant of Rogers, told the judge at a hearing after Petersen’s arrest. Petersen has been in custody by one law enforcement agency or another since Oct. 8.
The adoptive parents who dealt with Petersen in Arkansas over the years aren’t believed to have been aware of the fraud scheme and aren’t targets of the investigation, Kees said. It appears their adoptions are binding under Arkansas law.
In March, Marshall Islands officials charged a Springdale man, Justin Aine, with human trafficking, according to the Marshall Islands Journal. Kees said in the Oct. 9 news conference Aine’s case and Petersen’s are linked, but he declined to comment on how, and whether the Marshallese government will file any charges in the Petersen case.
Aine, 46, was charged by the assistant attorney general with one count each of trafficking in person, unlawful solicitation and monetary inducement, according to an article in the Journal.
-Kurt M. Altman, PLC, is a former state and federal prosecutor and Alison Holcomb is director of the ACLU Campaign for Smart Justice.
This story was originally posted on the Northwest Arkansas Democrat Gazette website.