;HANOI, Vietnam (AP) – Vietnam has failed to police its adoption system, allowing corruption, fraud and baby-selling to flourish, the U.S. Embassy says in a new report obtained by The Associated Press.

The nine-page document describes brokers scouring villages for babies, hospitals selling infants whose mothers cannot pay their bills and a grandmother giving away her grandchild, without telling the child’s mother.

“I’m shocked and deeply troubled by the worst of the worst cases,” said Jonathan Aloisi, deputy chief of mission at the U.S. Embassy in Hanoi.

Vietnam’s top adoption official called the concerns “groundless.” Bribery of orphanage officials may occur, but serious offenses such as baby-selling or kidnapping are not a problem, said Vu Duc Long, director of the Department of International Adoptions.

The dispute comes amid a boom in adoptions from Vietnam. Americans adopted more than 1,200 Vietnamese children over the 18 months ending March 31. In 2007, adoptions surged more than 400 percent from a year earlier; with 828 Vietnamese children adopted by American families.

While China remains the most popular overseas country for adoptions, more Americans are looking to Vietnam, which has fewer restrictions.

U.S. adoption agencies active in Vietnam said that despite some cases of wrongdoing, most adoptions in the country are ethical.

“Our experience has been a good one,” said Susan Cox, vice president of public policy with Holt International Children’s Services, based in Eugene, Ore., which has operated in Vietnam since the 1970s. “We are concerned about any unethical practices, but I would not agree that these cases are indicative of adoptions in Vietnam.”