Paul Petersen?s property, bank accounts frozen in $1.5 million seizure warrant

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The listing price on Paul Petersen’s Mesa law office was slashed by $24,000 Monday. But there is a snag to a quick deal: The property is embroiled in a criminal case. 

The price cut came hours before the Arizona Attorney General’s Office confirmed Petersen’s office was one of several assets listed in a $1.5 million seizure order.

A Maricopa County Superior Court judge gave the green light for authorities to seize Petersen’s office building. The judge also allowed them to seize Petersen’s vehicles, his Mesa home, his family’s vacation home, four properties he owned in Arizona, Utah and Arkansas and to freeze 11 personal and business bank accounts.

Authorities in the seizure warrant allege Petersen made at least $1,459,578 as part of an illegal adoption scheme he operated in three states.

Petersen is the elected Maricopa County assessor and a Mesa attorney specializing in private adoptions. Federal and state authorities say his business was built on human trafficking.

Petersen is facing charges in Arizona, Utah and Arkansas on allegations that he illegally transported pregnant women from the Marshall Islands to the U.S., fraudulently enrolled them for Medicaid and orchestrated adoptions of their children to American families for up to $40,000 each.

He has pleaded not guilty in all three states and has been released on bond.

‘Nobody has been kicked out of their home’

The seizures don’t mean the Petersen family will be out on the street for Thanksgiving. The court order prevents Petersen and his wife, Raquel “Rocky” Petersen, from transferring their assets to other individuals or converting them to cash before trial.

“Nobody has been kicked out of their home,” Attorney General spokesman Ryan Anderson said Tuesday. “This was an attempt by the state to hit pause.”

Anderson said the seizure will help Arizona taxpayers recoup losses if Petersen is found guilty. 

The building housing Petersen’s law firm went up for sale Nov. 18, a day before Judge Patricia Starr signed the seizure order. Originally listed for $499,000, the price was cut Nov. 25 to $475,000, according to the online real estate site, Zillow.

The office, at 37 N. Hibbert in downtown Mesa, also housed an agency Petersen co-owned called Bright Star Adoptions and a development company operated by his wife’s family.

Neither Petersen nor his attorney Kurt Altman could be reached for comment Tuesday. Petersen can challenge the seizure in court before his property rights are forfeited.  

In Arizona, Petersen and co-defendant Lynwood Jennet are charged with 32 counts involving Medicaid fraud. Jennet served as Petersen’s liaison for the Marshallese women and lived with them in Mesa.

The Arizona Attorney General’s Office alleges Petersen and Jennet fraudulently registered birth mothers living in Arizona for Medicaid so they could use the state health-care program for low-income individuals. Adoption contracts show Petersen attempted to use the Medicaid system in other states as well.

Marshallese citizens are not eligible for Medicaid unless they have lived in the U.S. for five years. But according to state investigators, Petersen and his associates lied about the residency status of birth mothers so they could illegally access the health-care benefits.

An investigation by The Arizona Republic, based on contracts, texts, emails and internal documents, found Petersen treated birth mothers and their children like monetary transactions.

He moved multiple women in and out of homes he owned in Mesa and Utah, took cuts for living expenses out of money he promised birth mothers and made every effort to  enroll them in Medicaid programs.

The Republic found Petersen was connected to at least three other adoption agencies in Arizona and Colorado. 

Petersen’s adoption practice was rooted in his 1998 mission to the Marshall Islands for the Church of Jesus Christ of Latter-day Saints. A top church official this month said he was disgusted and sickened by the details of Petersen’s case. 

Similar property seizures in Utah

The Arizona seizure warrant follows a similar effort in Utah, where Petersen is charged with 11 counts related to human smuggling. Prosecutors have asked the court to secure homes owned by Petersen in West Valley City where he allegedly housed women from the Marshall islands.

Prosecutors said in court filings the properties can be used to pay restitution if Petersen is convicted. 

Anderson said the seizures do not prevent Petersen from mounting a strong defense or from paying for lawyers.

He said the law allows “untainted” property seized in connection with a criminal case to be released in order to pay for legal representation. 

“Untainted means the property was not the proceeds of, or was not used to facilitate, the illegal activity,” he said, citing a two-year-old U.S. Supreme Court case.

Suspended from elected office for 4 months

The criminal charges are not Petersen’s only legal fight. He is also challenging the Maricopa County Board of Supervisors, which voted last month to suspend him from his government job for 120 days.

Because Petersen was elected, the board was barred from permanently removing him from office.

Petersen has worked at the Assessor’s Office since 2006. He served as the agency’s public information officer and lobbyist at the same time he operated his law practice.

He was elected assessor in 2014 and again in 2016. His taxpayer-funded salary is about $77,000 per year, but his attendance record is spotty.

County parking records obtained by The Republic show he used a garage reserved for county government workers 53 times from Jan. 1 through Oct. 2, 2019. That’s less than 30% of the available workdays.

On each of those days, he spent an average of four hours in the office. 

-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 AZ Central website.