Alleged Adoption Ponzi Scam Broke the Hearts of Couples Desperate to Adopt

Photo: The $60K Adoption Heartbreak: Babies That Didnt Exist: Alleged Scam Broke the Hearts of Couples Desperate to AdoptCourtesy Milton Josephs/AP Photo/ABC News Photo Illustration
New York couple Deborah and Milton Josephs, pictured here in 2008, thought that working with lawyer Kevin Cohen, right, would finally bring a successful conclusion to their two-year long efforts to adopt a child. Cohen, Deborah Josephs now says, "was a good actor."

Deborah Josephs cried all the way to central Pennsylvania. It was a long, difficult drive from Port Washington, N.Y., where her husband, Milton, had been hospitalized with a serious skin infection.

She didn't want to leave him, Josephs said, but she was also excited about where she was going.

"I left him there because I thought I would be picking up a baby," she said. "I didn't want to miss an opportunity of a lifetime for our family."

"Now," she said, "I feel like an idiot."

The Josephs are one of at least 16 couples who say they were duped into paying thousands of dollars into an alleged adoption scam run by Roslyn, N.Y., lawyer Kevin Cohen, the founder of the Adoption Annex, a now-defunct, nonprofit adoption services organization.

Prosecutors allege that Cohen, 41, who was arrested late last month, presented himself as a legal expert on adoption proceedings and collected between $20,000 and $40,000 from couples who believed the money would cover medical expenses for pregnant women who planned to give their children up for adoption. The Josephs say they handed over $60,000.

Those would-be adopted children, the Nassau County District Attorney's office said, didn't exist.

"This is among the most morally disgusting thefts I have ever witnessed as a prosecutor," Nassau County District Attorney Kathleen Rice said in a recent statement. "He preyed on the emotions and the hopes of couples at their most vulnerable time."

Last month Cohen pleaded not guilty to felony charges of larceny and scheme to defraud. Cohen's lawyer, Matin Emouna, said he couldn't discuss any of the allegations against him until the district attorney's investigation is complete. Emouna said that Cohen had successfully arranged adoptions in the past, though he didn't know exactly how many.

Rice's office has compared the alleged adoption scam to a Ponzi scheme -- a pyramid scam in which early investors are paid from funds provided by new investors. In the adoption case, the district attorney's office spokesman Eric Phillips said Cohen had provided partial or complete refunds to some couples whose adoptions fell through using money provided by Cohen's newer clients.

But most of the couples, Phillips said, believed that Cohen would ultimately deliver.

They "held out hope that they were going to get a baby," he said.

The Josephs were among them.

Paying for Two Babies, Hoping to Get One

Milton Josephs, 41, an elementary school teacher, and Deborah Josephs, 44, a human resources consultant, met Cohen in March 2009, Deborah Josephs said.

By then, the couple, who have a 6-year-old daughter, had spent more than two years trying to adopt a child. They placed advertisements in local newspapers across the country, looking for pregnant women who would allow the Josephs to adopt their children.

Some women responded to the Josephs' ads but would later change their minds, she said, choosing to give their babies to other couples or not to give them up at all.

"I would try to connect with these women, try to convince them we are the best couple in the world," Josephs said. "It never panned out."

In March, Cohen gave them new hope, Josephs said. He told the couple that he knew not one but two pregnant women who wanted to put their babies up for adoption, Josephs said.

Deborah Josephs said they agreed to pay the expenses for both women and Cohen's fee -- a total of $60,000 -- even though they only planned to adopt one child. She said that Cohen told them that if both women ultimately followed through on the adoptions, one child could go to another couple who couldn't afford to pay the birth mother's medical expenses.

Under the arrangement, Deborah Josephs said, if only one of the birth mothers agreed to an adoption, the Josephs would get her child.

"If we could fund that second birth mother, we were guaranteed one baby," Josephs said. "It was a kind of insurance."

One of the women, Josephs said she was told, was a teenage college student living in State College, Pa.; the other was a young woman in Lincoln, Neb. Josephs said Cohen provided them with medical records for the women, although he kept their last names confidential and said they couldn't contact the women directly.

"He felt it was better this way," Josephs said.

Cohen: 'A Good Actor'?

The Josephs grew confident in Cohen, Deborah Josephs said, in part because of his background. He told them that he was adopted from Ireland.

"It made us think he completely understood what it was all about," she said.

It also helped, she said, that the Josephs and the Cohens had a friend in common: Cohen went to high school with the husband of one of Deborah Josephs' friends.

By the summer, Deborah Josephs and Cohen were meeting regularly, she said. Over coffee, he would tell her his plans to raise money for adopted children with special needs, Josephs said.

"He, to me, seemed really philanthropic," she said. "He was always very thankful to me for my time, for chatting with him."

"He seemed like a really nice person," Josephs said. "He was a good actor, I guess."

But by the middle of the summer, things began to go awry. Cohen had originally told the Josephs that both women were due in early August, Deborah Josephs said. But in July, Cohen told them the due dates for both had been pushed back several days. In early August, Cohen told them the dates were pushed back again, to August 20, Josephs said.

Eventually, Josephs said he told them that both women would have to have labor induced Sept. 2 and Sept. 3, Josephs said.

"We definitely got suspicious then, but not suspicious enough," Josephs said.

The couple decided to split their efforts, with Deborah Josephs traveling to Pennsylvania to be there for one child's birth and Milton Josephs traveling to Nebraska for the birth of the other.

Milton Josephs' travel plans were canceled when he was hospitalized, but the couple decided that Deborah should still head to Pennsylvania.

"This was our day," she said. "This was it."

"I thought it would be one of the happiest moments of my life."

It wasn't.

The next day, Josephs said, after she'd arrived at State College, Cohen called her and told her not to come to the hospital.

Cohen told her there were complications with the delivery and that the baby's health was uncertain, she said. He told Josephs to return home and wait, she said.

Josephs said she was devastated. She worried about the baby and the birth mother. When she drove back to Port Washington, where her husband was recovering from his infection, she felt empty, she said.

Josephs said news from Cohen in the days to come didn't make her feel much better. The woman in Nebraska, he allegedly told them, had left the hospital without signing adoption consent forms. The Pennsylvania woman, Josephs said she was told, was too medicated following a Caesarian section to sign the forms.

'We Wanted to Believe'

By Labor Day weekend, Josephs said, she and her husband had had enough.

"We stepped out of our emotions for five seconds, enough to critically look at what was going on," she said. "We wanted to believe there were two babies -- we wanted so badly to believe everything he was saying, [but] when we started to think about the information he was giving us ... it led us in a different direction."

The direction they ultimately took was to a private investigator, who advised them to go to the Nassau District Attorney's Office.

Cohen was arrested Sept. 25 on charges of larceny and fraud in connection with the alleged adoption scheme. Law enforcement also said at the time that Cohen already had other criminal charges pending against him in connection to an alleged attempt to illegally transfer property to his name. Emouna, Cohen's lawyer, said his client had pleaded not guilty to those charges but could not comment further because that case, he said, was also still under investigation.

Meanwhile, the district attorney's office said it has heard from 15 other would-be adoptive couples from four different states -- New York, Texas, Georgia and Ohio -- with claims against Cohen.

Cohen's next court date is Tuesday. If convicted, he could face 15 years in prison.

Josephs said that she and her husband are sharing their story to encourage other would-be adoptive couples to be sure they do their homework and check references before they agree to an adoption arrangement.

"They really should know who they're working with," Deborah Josephs said.

The Josephs would still like to adopt a child someday, though Deborah Josephs said she's not quite ready to start the adoptive process all over again.

"We haven't gotten past this yet," she said.