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A Honolulu lawyer who was one of a handful of U.S. attorneys involved in illicit adoptions of Marshall Islands babies is now facing discipline by the Hawaii board that polices attorneys.

Laurie Loomis violated 20 provisions of the Hawaii Rules of Professional Conduct in her adoption practice, according to a petition by the Office of Disciplinary Counsel to the Disciplinary Board of the Hawaii Supreme Court. The board has the power to sanction her, up to disbarment.

Many of the allegations center on her failure to disclose to the state bar a bank account that she used to hold adoption client fees and make payments to birth mothers, a facilitator and herself, as required by the ethics rules.

But ODC’s investigation also reveals the inner workings of the Marshallese adoption pipeline, the subject of a Civil Beat series, “Black Market Babies,” in 2018 and 2019.

Loomis, for instance, paid a total of $242,950 to 31 birth mothers — apparently all Marshallese — who were having their children placed with adoptive couples over the 31 months ending in July 2018, according to the ODC’s petition.

Loomis shelled out another $173,703 in fees to “facilitators” — almost all to one woman, Merlyna Chinglong — who handled Marshallese birth mothers during their time in Waikiki hotels or at an apartment in Aiea.

Loomis, meanwhile, paid herself $944,125 in retainers and cost reimbursements during that time. Her legal fee for doing one adoption cited in ODC’s petition was $23,000.

Taken together, the allegations paint a picture of a lucrative adoption business that appeared to benefit from Hawaii’s lack of legal restrictions on payments to birth mothers.

Almost all the other states have laws that limit birth mother payments to covering their expenses. These laws are meant to prevent what amounts to baby-selling.

The ODC petition shows that Loomis made payments to handler Chinglong to cover birth mother expenses related to “travel, accommodations, prenatal care, Medicaid coverage, and adoption paperwork.”

But separate from that, Loomis also made a lump sum payment — usually a flat $8,500 — to birth mothers, characterized as living expenses after the placement.

“I find it disturbing, as we know in a lot of states this would be illegal,” said Ken Lawson, a University of Hawaii law professor and an authority on attorney ethics who reviewed the petition at the request of Civil Beat. “It’s not actually the practice of law. It’s the business of human trafficking in disguise.”

Loomis and her attorney in the discipline case did not respond to email requests for comment.

The Marshall Islands Connection

The petition does not address the issue of the Loomis adoptions violating a treaty between the U.S. and the Marshall Islands meant to prevent exploitation of birth mothers, the focus of Civil Beat’s investigation. But it provides additional evidence of this practice.

The Compact of Free Association allows Marshallese citizens to travel to the U.S. without a visa. The exception is women who are traveling to the U.S. to give up their children in adoptions.

That provision was meant to put an end to a booming and unethical baby market in the Marshall Islands.

The Marshallese have a tradition of informal child-sharing, in which children may live with relatives or friends for some time before returning to their birth parents. The U.S. practice of severing birth parents’ rights in adoptions is far less common in the Marshalls. Birth mothers have said they did not realize the implications of agreeing to an adoption in the U.S. until it was too late.

To prevent that, the Marshall Islands required all international adoptions to go through a central government authority. Yet U.S. attorneys such as Loomis were circumventing that requirement, Civil Beat reported.

The ODC case, focused on Loomis’s actions as an attorney, does not detail whether the 31 birth mothers were flying from the Marshall Islands, which would violate the treaty, or coming from U.S. states where they were already living, which is allowed.

There are clues, however. One payment of $150 is for “passport & exit fee.” Two plane tickets for $876 each are notated with “MH-HI.” MH is an international code for the Marshall Islands.

In a 2019 story, Civil Beat identified three cases in which birth mothers in Loomis adoptions flew from the Marshall Islands to Hawaii in defiance of Marshall Islands law and the COFA. A subsequent story quoted from Loomis emails telling prospective adoptive parents about Marshallese women who had recently flown from their home country to Hawaii and were due to give birth in several days.

An Undisclosed Adoption Account

The disciplinary board is scheduled to hold a formal hearing on the petition by the end of October, unless the parties agree to an extension. A hearing officer report is due by February.

The proceedings could result in anything from dismissal of the petition to disbarment. The ODC says it gets from 300 to 600 complaints about lawyers per year, but only four to 10 of those result in formal petitions for discipline, as in the Loomis case.

The petition, which became public in May, details three separate “matters” that the ODC said demonstrated misconduct, one of which was spurred by Civil Beat’s 2019 story on Loomis.

Two of the three matters involve Loomis’s use of a bank account that she allegedly used to hold adoption client fees and make various payments.

Attorneys are required to identify and certify client trust accounts to the state bar in annual filings. They cannot commingle that money with their own funds, for the most part, although they can deposit client fees that they later withdraw when they’ve done the agreed upon work. The signatories of the accounts must be licensed attorneys.

Instead, Loomis opened an adoption trust account with Charles Loomis in 1992, using their Social Security numbers. Loomis did not disclose this account to the bar in 2016, the ODC alleged.

That same year, a Georgia couple wired $49,784 to the account Loomis failed to disclose to cover her legal fee, the living expenses of a birth mother who flew from Arkansas to Hawaii for the adoption, payments to the handler Chinglong and other expenses, the ODC said.

In the second matter detailed by the ODC, a Hawaii couple hired Loomis in 2018 to represent them in an adoption of a child in Arizona. In the six months after they hired Loomis, the lawyer “generated exactly three forms for them,” according to the ODC petition.

The couple eventually became fed up with Loomis being unresponsive and said they wanted to hire a different lawyer, the petition says. But Loomis would not return any of the $4,588 the couple had paid, pointing out that they had agreed that it was non-refundable.

The couple protested that there was “no evidence that anything had been done on their behalf by Loomis and they contested the ‘reasonableness of the fees’,” the ODC petition says. But Loomis said she had diligently represented them.

Hawaii Lacks A Law On Birth Mother Payments

The third matter was triggered by the 2019 Civil Beat story on Loomis.

“Although Loomis generally denied the allegations in the Civil Beat article, a review of Loomis’ Adoption Trust Account … shows extensive payments to birth mothers, to ‘facilitators’ directly, to ‘facilitators’ for birth mother expenses, to Loomis for attorney’s fees, and for court costs,” the ODC petition states.

The use of an undisclosed bank account is often the basis for attorney discipline in Hawaii and the rest of the U.S.

The $8,500 lump-sum payments that Loomis made to birth mothers would appear to have been illegal in many other states.

As of 2022, Hawaii was one of only three states — along with Rhode Island and Wyoming — that did not address the issue of adoption expenses in statute, by the federal Child Welfare Information Gateway.

And it was one of five states, in addition to Massachusetts, Nebraska, Rhode Island and Wyoming, that did not regulate birth parent expenses. Many of the states that do have such laws require that the birth mother payments be “reasonable and customary,” covering things like medical care, living expenses, counseling, attorney fees and travel costs.

Twenty-four states either expressly barred certain kinds of expenses or required them to be within allowable categories or considered reasonable by a judge, according to the federal report. Nine states imposed a dollar cap, from $1,000 to $7,500.

In 31 states, it was illegal for a person to offer a birth parent money or anything of value in return for relinquishing a child for adoption. Again, Hawaii was not among them.

Unlike 41 other states, Hawaii also lacked a statute that requires an accounting of all adoption expenses to a judge.

A recent case in Texas, also against a lawyer who has been active in Marshallese adoptions, shows how payments to birth mothers can cross the line from legitimate to illegal.

Jody Hall was accused this month of paying pregnant inmates in the Fort Worth jail to give up their babies in adoptions. The transactions were considered illegal under Texas law, according to an arrest affidavit, because the jail was covering all of the pregnant inmates’ living expenses such as health care and room and board.

Hall’s payments, in other words, could only have been considered baby-buying.

It’s unclear if that investigation includes her brokering of illicit adoptions involving birth mothers living in the Marshall Islands. In 2019, Civil Beat identified Hall as one of several lawyers illegally arranging for such adoptions.

Hall said in communications with potential clients that she was flying birth mothers from the Marshall Islands to the U.S. mainland through Honolulu.

In its earlier stories about Loomis, Civil Beat reported that in 2017, doctors at Kapiolani Medical Center for Women and Children noticed an influx of pregnant Marshallese women — about 20 in six months — who listed the same Aiea address and were all working with Loomis on adoptions.

They all came in with handler Chinglong, the doctors said. And though they said they would be taking the babies home, they could be seen handing over the babies to adoptive parents in the parking lot. Many of the women had not had prenatal care despite being in their last trimesters, the doctors said.

In an interview, one Marshallese mother who had been flown to Hawaii said she didn’t know until she was signing paperwork in a Waikiki hotel room where she stayed with four other birth mothers that the adoption would be closed.

“I was scared at the moment because I received money from them,” she said through a translator. “And I felt it was only right to sign the papers and get it done with because if they were to tell me I needed to return all the money, I wouldn’t be able to.”

Civil Beat also reported that one Marshallese birth mother who flew from Arkansas to Hawaii two times for adoptions was signed up both times for Medicaid, which is intended only for residents who intend to stay here.

The ODC petition does not address that issue, but mentions that payments from Loomis to Chinglong included “Medicaid coverage.”

Paul Petersen, an Arizona attorney who also ran a Marshallese adoption business, was sentenced to five years in state prison in 2021 for a variety of charges. Among them was providing false information about birth mothers’ residency to get coverage under Arizona’s Medicaid system, which in three and a half years was on the hook for at least 29 births as a result.