Former President of Our Lady of the Lake Foundation Charged in Federal Court with Wire Fraud and Money Laundering
United States Attorney Brandon J. Fremin announced today the filing of charges against JOHN PAUL FUNES, age 49, of Baton Rouge, Louisiana, for wire fraud and money laundering.
As alleged in the Bill of Information, FUNES was employed as President of the Our Lady of the Lake Foundation (the “Foundation”), a non-profit organization that supports the Our Lady of the Lake Regional Medical Center. Beginning in or about 2012, however, and continuing through September of 2018, FUNES executed a scheme to defraud the Foundation and caused a loss of more than $550,000. The Bill charges FUNES with one count of wire fraud, in violation of Title 18, United States Code, Section 1343, and one count of money laundering, in violation of Title 18, United States Code, Section 1956(a)(1)(B).
According to the Bill, FUNES executed the scheme in a variety of ways, including by preparing, signing, and submitting payment vouchers that would cause the Foundation's accounting personnel to issue checks for the payees, amounts, and purposes reflected on the voucher. Because of his position at the Foundation, FUNES could approve his own vouchers, which enabled him to submit dozens of false and fraudulent vouchers that misrepresented the purpose of the checks. In furtherance of the scheme, for example, FUNES submitted numerous fraudulent vouchers in which he represented that Foundation funds were necessary to pay a charter flight company to make time-sensitive “outbound patient transports” from Our Lady of the Lake Children’s Hospital, when in fact FUNES was repeatedly using the flight company's services for his own personal benefit, unbeknownst to the Foundation. As another example, FUNES submitted numerous vouchers in which he fraudulently represented that funds were necessary to purchase gift cards that would be provided to cancer patients, when in fact FUNES often used the cards for his own personal benefit. The Bill also alleges that, on numerous occasions, after fraudulently causing the Foundation to issue payments to other individuals, FUNES would direct those individuals to funnel the majority of the funds back to him, by check or money order, thereby conducting financial transactions designed in part to conceal proceeds of the fraudulent scheme. According to the Bill, in August of 2018, when the Foundation’s finance department began an internal audit of the expenses described above, FUNES created numerous false documents in an effort to conceal the scheme.
U.S. Attorney Brandon J. Fremin stated, “These charges demonstrate that those who are entrusted with an organization’s finances, like Mr. Funes, and who deceive and defraud their employers for their own personal benefit will be held accountable. Not only did Mr. Funes violate the trust of the Foundation and Our Lady of the Lake, but he also betrayed the trust of the people served by the Lake and its many donors whose generosity was abused. The filing of these charges today is an important step in our effort to hold the defendant accountable for the criminal conduct described in the Bill of Information and, working with the Foundation, to do everything within our ability to make the Foundation whole. Special thanks to our prosecutor and the United States Secret Service who led this investigation with outstanding support from the FBI and IRS-CID.”
“The Secret Service is committed to aggressively investigating financial crimes cases,” said Resident Agent in Charge Tara McLeese of the Secret Service Baton Rouge Office. “Today’s charges are a reminder that financial crimes are not victimless crimes, and the Secret Service will continue to work with our outstanding partners in the U.S. Attorney’s Office to bring offenders to justice.”
FBI Special Agent in Charge Eric J. Rommal stated, “The defendant betrayed both his employer and the Baton Rouge community as a whole by abusing the trust placed in him as President of the Foundation. The FBI New Orleans Division and our federal partners are committed to holding individuals accountable for their actions when they illegally profit at the expense of our community's institutions.”
This investigation is being led by the United States Secret Service with valuable assistance from the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation Division. This matter is being prosecuted by Assistant United States Attorney Alan Stevens, who also serves as Deputy Criminal Chief.
NOTE: The defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.