Monday, October 13, 2008


Before I go into details on this RICO lawsuit, I also want to go into the funds, people and organizations behind what has happened to these individuals in this lawsuit. There were several parties involved in working out this situation. This lawsuit was filed in federal district court in Maryland on September 9, 2008

Project OZ which is no longer in business. Here are the statistics from their last IRS Form 990 from Guidestar. Their tax forms were done in North Carolina but with a Maryland CPA firm.

Gross Receipts -$1,798,106.
Public support $ 13,337
Program revenue $1,784,769
Kerry Palakanis, CEO, earned $71,984

Their board of directors include:

Dina Mouriski was a director.
Annette Brady was a director.
Kimberly Wood was a director.
Kerry Palakanis was the CEO.
Erica Ploski was an executive director
Jane Katherine Conway was an executive director.

Main contractors were Consultants International which earned $158,500. This Gloria Campaneros earned $210,790. Even though I know Gloria's name from other agencies, I can't find anything on either organization.

Adoption Supervisors is another organization that has helped out many of these adoptive parents in finishing their adoptions or giving them information on the PGN problems.

Catholic Charities did one of the homestudies for two of the plaintiffs. When the plaintiffs contacted them for help, this agency treated them rudely and offered no help.

Dakar, L.L.C. is the name of Kerry Palakanis' consulting firm. There is no documents or websites to this firm on the internet. This consulting firm of Kerry Palakanis was also receiving adoption funds. Money from adoptive parents were being redirected to this firm in order to hide the money.

According to the Rico lawsuit, Nancy Hoffman was asked to be one of the adoption facilitators for Project Oz. She was a travel agent very familiar with the adoptive parents coming into Guatemala. She was approached by Nancy Bailey who ran the Semillas de Amor orphanage along with their charity, Seeds of Love. According to the lawsuit, this organization was based out of California. They must have moved their operation to North Carolina. On May 12, 2008, Semillas de Amor was raided by the PGN according to this news article. Kerry Palakanis asked Nancy Hoffman to pay adoptive parents expenses while she was pocketing the funds and not paying the facilitator. Nancy herself is out over $58,000. She is one of the plaintiffs in this case. It does get more interesting.

Their IRS Form 990 is very interesting in itself. Ms. Bailey started requiring adoptive parents to pay $1,000.00 to her charity, Seeds of Love. According to

Contributions received $66,019.68 in 2006

Board of Directors:

Nancy Bailey is the president of this organization.
Ann Herfundahl is the secretary.
Peggy Palen is the vice president.
Kerry Palakanis is the treasurer.

Nancy Bailey is an interesting character in herself. The COA accredits adoption agencies, debt consolidation companies, and employee assistance programs. Guess what Nancy used to do? She founded her own business, Employee Health Plus, to provide employee assistance program to various corporations. She has served on both national and local EAP professional board of directors. She also has a degree in psychology. So she has deep connections with the COA.

Once upon a time there was an adoption agency called 1st Steps International Adoption Aide, Inc. It was run by Lin Strasser although on their IRS Form 990 she was the secretary of this agency. It was out of Pennsylvania by owner Lin Strasser. Pennsylvania however shut them down in 2004. One key person, Kerry Palakanis was working for this agency as Executive Director. She then created the sister agency to 1st Steps, 1st Steps Project Oz. It was changed again to Project Oz. This agency is now under a RICO civil lawsuit. This complaint has been filed September 9,2008.

The history behind this adoption agency is pretty horrifying. The agency was initially started in Montana in 2000. Then again the agency was incorporated again in Delaware in 2001. It was then granted a license in August 2003 by the state of Maryland. They had offices in Maryland, North Carolina, Illinois, and Pennsylvania.

In 1996, Kerry Palakanis declared bankruptcy. When she began working with Lin Strasser as co-owner, that should have put a stop to her notorious adoption career but it didn't. When 1st Steps International shut its doors, Ms. Palakanis had 14 charges of embezzlement against her but she moved onto Maryland to start Project Oz adoptions. Her adoption agency was licensed in four states, Illinois, Pennsylvania, Maryland, and North Carolina. She closed her offices in Illinois in 2006 due to the Illinois Adoption Reform Act. That Act involved the predatory practices of adoption agencies such as in the case of Baby Tamia. Two questions come to mind. Was Project Oz licensed really in Illinois? If so what kind of predatory operations were they involved in to get them kicked out of Illinois?

In March of 2008 Project Oz was denied Hague Accreditation and in May of this year had their license suspended by the state of Maryland. Project Oz was also a member of the JCICS in 2003. JCICS is a sponsor of the COA.

When I googled Kerry Palakanis, I discovered that her family had some severe issues in April 2008. It looks like this was the year that her world fell apart. Her daughter age 16, Lara, ran away with a twenty year old man. Kerry and her husband, David, also use to own a cafe in Tarboro, NC. called Main Street Cafe. They also owned the Underground Pub in Tarboro. So Ms. Palakanis was a very busy woman.

One of the plaintiffs is AJ. She is minor in this case. Her story is a sad one. While at one of the orphaniages (probably Semillas de Amor as that is who Project Oz worked with and was raided), AJ was sexually molested. AJ was placed with her first set of adoptive parents. AJ became increasingly more disruptive and the adoptive mother could not handle her. She contacted Kerry and the agency. The agency without prior ICPC approval went to California and brought the child back to Maryland to be placed in the state of Maryland's foster care system. Until the foster placement, the child stayed temporarily with the Kerry and her family. Once foster parents were found, they were forced to sign a "at risk" placement agreement. This child again acted out and became aggressive. She was then placed with the Rozenbroeks. The staff of Project Oz would not give this family any background on AJ. In fact, the agency went before a judge and provided false information of what happened in the first disruption. Project Oz and Kerry Palakanis knew of the sexual abuse that this child suffered and chose to keep that information from the all of the adoptive parents. This agency then charged both families $25,000 a piece for the two adoptions of the same child. This child is now sadly in residential treatment. This poor child has been through hell all because of the actions of this adoption agency.

Another adoptive parent, Theresa, was threatened when she contacted outside sources to help her find out information on her adoption. She threatened her with agency directed counseling which is in direct violation of the U.S. Orphan Act. Theresa said that she would not complete the counseling until she verified that Kerry Palakanis had the authority to do so. When she contacted a PGN attorney, that is when she found out that Project Oz was working with an Guatemala adoption facilitator not an attorney. She kept requested updates. The agency intentionally lied to her about her case and the updates on the child that she was adopting.

It gets worse as you read the lawsuit. These adoption agencies need to be held accountable for their actions. These folks are hurting adoptees, natural parents here in the United States and overseas and the adoptive parents here in the United States. This agency had connections to an orphanage, the JCICS, the COA, and EAP programs across America. These people have way too much power over the lives of those living adoption.

Commonwealth Adoptions International, you are next.


AngelaW said...

Very well written Amy

Amyadoptee said...

Thank you. I worked on this for a couple of days.

Anonymous said...

Outstanding research, my only question is why was Kerry P. allowed to re open Project Oz AFTER "1st Steps International" failed financially?
This has got to stop, it is way to lenient for anyone to open up shop as an adoption agency. Grant you, it has gotten slightly more difficult but we have to make sure these people don't re-surface in a few years like Tedi Hedstrom with another agency.
For anyone to order psychological counseling on an adoptive parent because they dare ask questions is criminal and out of their scope of expertise. Many adoptive parents have had terrible untruths reported about them because of these adoption agencies retailating. This is wrong!

Anonymous said...

We had an unfortunate incident with 1st Steps International Adoption's Lin Strasser. We were unaware of ICPC regulations and took a little girl from Lin's house in PA to IL, thinking we were "legal" with just a home study. We paid $4,000 for the privilege of having this child in our home for three weeks, then having her removed by Lin Strasser because of the lack of information we had on the child, and our efforts to obtain same. Also the fact that the former adoptive parent did not agree with our decision to place this child in kindergarten (at age 8, she had not been schooled). Very sad time for us; I never learned what happened to this little girl, but Lin and Kerry are bad news and I hope to heaven they never have anything else to do with children.