Arizona says it isn’t part of any deal to cut prison time for Petersen

Paul Petersen and his lawyers claim to have brokered a three-way deal to limit his prison time on human trafficking and fraud charges and to ensure he spends most of it in a federal penitentiary.

But Arizona authorities aren’t offering any get-out-jail early cards. The Arizona Attorney General’s Office said Monday it is not party to any agreement to cut the sentence for the former Maricopa County assessor.

The charges Petersen faces in Arizona in connection with an illegal international adoption business are separate from state charges he faces in Utah and federal charges in Arkansas, an office spokesman told The Arizona Republic. So, too, are Petersen’s plea deals. “The Arizona sentencing agreement is completely devoid of any concurrent language or a global settlement,” spokesperson Ryan Anderson said. “The attorney general has not agreed to that.”

That means Pettersen, who was scheduled to be sentenced Tuesday in Arkansas, could end up serving backto-back sentences in federal and state prison rather than doing all of his time at once in a federal prison.

Petersen in June pleaded guilty in Arizona, Arkansas and Utah to using his private adoption business to illegally transport pregnant women from the Republic of the Marshall Islands to the United States.

In Arizona, Petersen admitted fraudulently enrolling the birth mothers in Medicaid and cheating the state’s health care system for the poor out of more than $800,000. He also admitted forging documents to jack up the fees he charged adoptive parents.

In Arkansas and Utah, he pleaded guilty to human smuggling charges.

Petersen’s attorney, Kurt Altman, did not return calls or emails seeking comment Monday.

Altman told an Arizona judge in September “three different prosecuting agencies” had signed off the agreement.

He said the goal was to get Petersen sentenced in federal court in Arkansas before being sentenced on state charges in Arizona or Utah. That way he does his time in federal prison, “whatever time that may be.”

Petersen faces up to 10 years in Arkansas, 15 years in Utah and about 16.5 years in Arizona.

Altman said state prosecutors in Utah and federal prosecutors in Arkansas agreed to sentence Petersen concurrently with whatever sentence he is given in Arizona.

Despite Altman’s assurances that all three cases were tied together as part of one deal, Petersen’s plea agreement in Arizona contained no such language. State prosecutors confirmed they had not agreed to allow Petersen to serve sentences concurrently.

Officials said sentencing would be up to the court.

Petersen was scheduled for sentencing in Utah Jan. 20 and in Arizona Jan. 22.

A pipeline of adoptions of Marshallese babies

Petersen was elected assessor in 2014 and again in 2016. His taxpayer-funded salary was about $77,000 per year. At the same time, he operated a law practice focused on adoptions.

He resigned as assessor in January to focus on his defense.

Petersen was arrested in October 2019. Authorities said he created a pipeline to bring Marshallese women to the U.S., arranged for them to give birth in local hospitals and set up adoptions of their babies to American families for up to $40,000 each.

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

Between November 2015 and May 2019, the Arizona Health Care Cost Containment System, the state’s Medicaid agency, paid for at least 29 births, according to Petersen’s indictment. Adoption contracts show Petersen attempted to use the Medicaid system in other states as well.

He and co-defendant Lynwood Jennet originally were charged in Arizona with 32 counts related to Medicaid fraud. Jennet served as Petersen’s liaison for the Marshallese women and lived with them in a Mesa fourplex.

Petersen spent the months leading up to his guilty pleas proclaiming his innocence and vowing publicly to fight the charges.

Jennet pleaded guilty in December to conspiracy, fraud, theft and failure to file a tax return. As part of a plea deal, she agreed to turn state’s evidence against Petersen.

A Republic investigation in April found 20 of the Marshallese women gave birth at Banner Gateway Medical Center in Mesa.

The women were admitted to the hospital within weeks of arriving in the U.S. Most did not speak English. They listed the same addresses on Medicaid forms. Yet Banner officials continued filing Medicaid paperwork for the women and submitting reimbursement claims to the state, records show.