Former President of Our Lady of the Lake Foundation Pleads Guilty in Federal Court to Wire Fraud and Money Laundering
United States Attorney Brandon J. Fremin announced today that JOHN PAUL FUNES, age 49, of Baton Rouge, Louisiana, pled guilty before U.S. District Judge John W. deGravelles to wire fraud and money laundering. As a result of his conviction, FUNES faces a significant term of imprisonment, a fine, and a period of supervised release.
According to admissions made during his plea, FUNES executed a scheme to defraud Our Lady of the Lake Foundation (the “Foundation”), a non-profit organization that supports the Our Lady of the Lake Regional Medical Center, and caused a loss of more than $550,000. FUNES prepared, signed, and submitted payment vouchers that caused the Foundation's accounting personnel to issue checks for the payees, amounts, and purposes reflected on the vouchers. 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 of Information 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, “This conviction makes evident our willingness to prosecute anyone who violates the trust of their employers by unjustly enriching themselves through fraudulent schemes. Not only did Mr. Funes betray his employer and the many benevolent donors whose generosity fueled the mission of the Foundation but he also betrayed the trust of the many great people served by the Foundation. Great credit goes to our prosecutor, the Secret Service, the FBI, and the IRS-CI whose investigative efforts and close collaboration with the Foundation made this conviction possible.”
Tara McLeese, Resident Agent in Charge of the Secret Service in Baton Rouge said, “I would like to commend the hard work and dedication of the attorneys from the United States Attorney’s Office and the investigators involved in this case.”
FBI Special Agent in Charge Eric J. Rommal stated, “Today’s guilty plea illustrates that individuals who take advantage of positions of trust for personal financial gain will be held accountable by the FBI and our law enforcement partners.”
Thomas Holloman, Special Agent in Charge, IRS – Criminal Investigation, stated, “The Special Agents of IRS-CI play a vital role in the investigation of white collar crimes such as those committed by the defendant. They ultimately unraveled Mr. Funes’ attempts to conceal his embezzlement of the Foundation proceeds despite his use of nominees and other unscrupulous means. IRS-Criminal Investigation is committed to holding accountable those individuals who violate the public trust, and use public funds as their personal piggy bank.”
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.