Former Arizona Politician Who Ran Illegal Adoption Scheme in 3 States Loses Appeal

On Tuesday, former Arizona politician and adoption attorney Paul Petersen lost an appeal related to his Arkansas sentencing and will remain in prison for running an illegal adoption scam in multiple states.

Petersen was sentenced in Arkansas to serve six years and fined $100,000 for conspiring to smuggle people. He filed an appeal stating that his sentence was unreasonable because it was two years longer than the recommended guidelines.

The 8th Circuit Court of Appeals declined Petersen's appeal and upheld his sentencing on Tuesday, saying, "He fully knew the illegality of his conduct."

According to the prosecution, Petersen ran a fraudulent adoption scheme with a woman from the Marshall Islands while he was in office. He paid other women from the islands to come to the United States and give birth to their babies then put them up for adoption. At least 70 adoption cases in Arizona, Utah and Arkansas were a part of the scheme.

However, in 2003 the U.S. government banned citizens from the Marshall Islands from traveling to the U.S. for any reason involving adoptions.

Peterson pleaded guilty to charges of human smuggling and fraud in Utah, and he was also sentenced to five years in Arizona for fraud after he submitted false applications so the birth mothers could receive health coverage from the state.

 Paul Petersen Loses Appeal
On Monday, an appeals court upheld Paul Petersen's six-year prison sentence in Arkansas for conspiring to smuggle people in an illegal adoption scheme in three states that involved women from the Marshall Islands. Above, then-Maricopa County, Arizona, Assessor Paul Petersen, right, and his attorney, Kurt Altman, leave a court hearing in Phoenix on November 5, 2019. Jacques Billeaud/AP Photo

Petersen 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. He was also charged in Arizona for providing documents to a county juvenile court that contained false information.

The appeals court rejected Petersen's argument and said the sentencing judge made it clear why he considered Petersen to be unique from others who had received shorter punishments for similar offenses in other cases.

"Petersen arranged the sale of infants for personal profit; he did so for many years and in three states; he did so while serving as a public official; his crime involved a significant fraudulent scheme against the state of Arizona; he repeatedly lied and instructed others to do so; and he fully knew the illegality of his conduct. Petersen does not show the district court committed a clear error of judgment here," the appeals court wrote.

Petersen argued the $100,000 fine was unreasonable because the judge improperly decided Petersen's divorce was a sham to conceal assets and ignored a divorce decree indicating he would have no such access to his ex-wife's assets.

"Even if this finding was erroneous, the district court did not clearly err in alternatively imposing a fine based on Petersen's future ability to pay because of his prior legal education and employment," the appeals court wrote.

Petersen's attorney, Kurt Altman, didn't return phone and email messages seeking comment on the appeals court ruling.

After pleading guilty to human smuggling and fraud in Utah, where a parole board ultimately decides how long a person serves, Petersen was sentenced to up to 15 years in prison. The Utah punishment will be served at the same time as his other sentences.

The Associated Press contributed to this report.