Federal Jury Convicts Former Non-Profit Health Clinics CEO for Funneling Millions in Grant Money to Private Companies
BIRMINGHAM – A federal jury today convicted the former chief executive of two non-profit health clinics for the poor and homeless for funneling millions in federal grant money to private companies he formed to contract with the clinics. U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton, Internal Revenue Service-Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot, and U.S. Department of Health and Human Services, Office of Inspector General, Special Agent in Charge Derrick L. Jackson announced the verdict.
The jury convicted JONATHAN WADE DUNNING, 52, of Hoover, for conspiracy, bank fraud, wire fraud and money laundering after deliberating about three days following three weeks of testimony before U.S. District Judge Barbara Jacobs Rothstein. Dunning’s sentencing should be scheduled in about 90 days.
The guilty verdicts came on 98 of 112 charged counts related to Dunning’s involvement with Birmingham Health Care, Central Alabama Comprehensive Health in Tuskegee, Birmingham Financial Federal Credit Union, and a group of for-profit businesses known as the “Synergy Entities.” Over the years, BHC and CACH received millions of dollars in federal grant funds through the Health Resources & Services Administration to further their missions of providing healthcare services to underserved populations.
Jurors found Dunning guilty of conspiracy to commit federal program fraud, wire fraud, bank fraud and two kinds of money laundering. They also found him guilty on 62 of 67 counts of wire fraud, two of three counts of bank fraud and 33 of 41 counts of money laundering.
"Dunning relentlessly stole taxpayer dollars that were meant to provide critical medical care to the poor and homeless in Birmingham,” Vance said. “His shameless devotion to purchasing luxury items like a Jaguar for himself, while leaving to suffer the people he committed to serve, is deplorable." Vance said. “My office is committed to prosecuting cases where tax dollars are criminally misused by those the public entrusts to be good stewards. I applaud the commitment of the agents of the FBI, IRS and HHS, and the prosecution team in my office, who all worked long hours to unsnarl the tangle of companies, contracts, real estate and financial dealings that Dunning used in an unsuccessful effort to conceal his criminal conduct.”
“Mr. Dunning took money intended to help the less fortunate in our area and used it for his own personal bank account -- actions that are simply inexcusable and hard to comprehend,” Stanton said. “I am extremely proud of the work on this case, and I want to personally thank the agents and prosecutors for their tireless efforts in bringing Dunning to justice. The public can be assured that the FBI and our law enforcement partners will continue to aggressively pursue those who would violate the public trust.”
“The guilty verdict of Jonathan Dunning is a victory for the American public,” Hyman-Pillot said. “Jonathan Dunning used taxpayer funds from Birmingham Healthcare to enrich himself. As a result, he built his fortune on a foundation of greed and deceit. IRS Criminal Investigation and our law enforcement partners exposed every layer of financial fraud Jonathan Dunning attempted to conceal. Today, justice has been served.”
“The jury's verdict speaks volumes,” Jackson said. “Stealing federal money meant to treat the poor and homeless will not be tolerated. We will continue to work with our law enforcement partners to protect the vulnerable beneficiaries of these taxpayer-funded programs from greed-fueled schemes."
Dunning was the chief executive officer of BHC and CACH for a period of time and left those jobs to run his for-profit businesses. Even after leaving his post as CEO, however, Dunning continued to exercise control over BHC and CACH, according to testimony. Between October 2008 and October 2011, Dunning served as president, board chairman and loan officer of Birmingham Financial Federal Credit Union.
From those various positions, Dunning participated in a conspiracy and executed schemes that defrauded BHC, CACH, and others of substantial resources, including federal funds. Dunning laundered money in a variety of ways to conceal and promote his crimes and to spend the money for himself.
The maximum prison penalty for conspiracy is five years, for wire fraud and money laundering the maximum is 20 years, and for bank fraud, 30 years.
FBI, IRS-CID, and HHS-OIG investigated the case, which Assistant U.S. Attorneys Melissa K. Atwood, Tamarra Matthews-Johnson and John B. Ward are prosecuting.