The Adoption Scam

"Nila was the visionary," Bill Neumiller says. "She would see things and I would say, 'What do you see?' And then we would work together to establish bricks and mortar."

Her passion was contagious, agrees a former employee who asked to be identified by only her first name, Angela.

"She made a lot of dreams come true for a lot of people," Angela says. "Plenty of times she would put her own money, her reputation, and her energy on the line to get into a country. I think it was because she had a blind faith she would get into these countries."

In 1996, the Neumillers adopted a fifth child, a six-year-old Russian girl. Ten months earlier, Reaching Arms had placed the girl with a New Jersey family who now wanted to send the girl back.

"Our hearts were broken," Bill Neumiller says. "Because of this situation, we didn't have to choose, we just had to react."

In 1999, Reaching Arms opened an orphanage in Ukraine. Friends from the Neumillers' church sent blankets, clothes, and toys and then traveled to the Ukrainian home. Back home, Nila Neumiller spoke frequently about her work to Rotary clubs and other groups.

"The word 'charisma' always comes up with her," Angela says. "Nila naturally attracted people who are energetic and fun-loving, who like to take life seriously, people who don't just blend in."

But she had no patience for the details, according to Angela and another former employee interviewed as a part of the state investigations. According to their sworn statements, and to City Pages' interview with Bill Neumiller, both donations and fees paid by adopting families got deposited into a single bank account. Families' payments for future services paid for the most pressing bills, regardless of which adoption they were for.

It was a constant struggle to pay the bills, Bill Neumiller says. "There was hardly any money to begin with," he says. Add to that the difficulty of working in many countries. "If the process wasn't changing, the government was changing."

"I think Nila tried to hold everything together by a very thin thread," Angela adds. "I think her vision was strong and good and I think she got misdirected by her own weaknesses."

Today, Reaching Arms is out of business. In March, the state Department of Human Services, which oversees adoption agencies, revoked its license after finding dozens of violations of Minnesota's adoption rules. At the state attorney general's request, the agency's books are undergoing a court-ordered audit. According to investigations conducted by both state agencies, Reaching Arms asked for tens of thousands of dollars from families even before determining they were qualified to adopt. Human Services investigators also concluded that the agency charged fees that weren't disclosed up front, increased fees months into the adoptions, falsified documents, and threatened to halt the adoptions of families who complained.

According to affidavits on file in the attorney general's case, several families were ordered to undergo spiritual and psychological counseling with the husband of the agency's director and founder, who is not a licensed psychologist. One family was given a contract to adopt a child from Kenya, even though Reaching Arms was not authorized to perform Kenyan adoptions. Another family had its credit card charged without its knowledge.

Some of the families eventually managed to adopt the children they were offered, albeit through different agencies and at the cost of additional tens of thousands of dollars. Others never got their children.

Nila Hilton—she has been divorced and remarried and was running Reaching Arms with her new husband, Tom Hilton, before it was shut down—declined to be interviewed for this story, as did Tom Hilton. Their attorney didn't return several calls requesting comment. The Hiltons did provide a written statement saying the agency has been wrongly portrayed.

"Part of the reason [Reaching Arms] has remained silent to this point is to protect the confidentiality of our clients," the statement reads. "If we were free to openly discuss the facts involved we strongly believe the negative publicity would not have painted such an ugly picture."

Ann and Andrew Spurbeck live in a yellow farmhouse on top of a ridge overlooking a thick swath of topsoil that's rotated between corn and soybeans. There's a picturesque horse farm across the road, complete with whitewashed split-rail fences, and not far beyond that, pristine Lake Waconia.

The couple's three biological children, ages 11, 13, and 15, sweep in and out of French doors that lead onto a wide wrap-around porch, trailed by a gaggle of friends. They're chasing the dog, which is fetching muddy golf balls knocked into the yard from a golf course on the other side of the ridge.

The Spurbecks don't have as much money as the spread suggests. Ann is a stay-at-home mom and Andrew works in tech support at SuperValu. They're frugal, and the land under the house has been in the family for years.

Still, they feel blessed. And that sense of gratitude is why they wanted to bring an orphan to live in the sprawling, sunny farmhouse.

In February 2005, the Spurbecks began checking into several adoption agencies. Reaching Arms placed the kind of kids they wanted—Eastern European children between the ages of four and seven—but it also appealed to them for other, more spiritual reasons.