Former Clerk for Chicago Transit Authority Retirement Plan Sentenced to a Year in Prison for Fraudulently Obtaining $356,000 in Plan Funds
CHICAGO — A suburban Chicago businessman pleaded guilty today to a federal fraud charge for swindling $2.5 million from a hospital that paid him for scarce personal protective equipment in the early weeks of the COVID-19 pandemic.
DENNIS W. HAGGERTY, JR., 45, of Burr Ridge, Ill., pleaded guilty to one count of wire fraud, which is punishable by up to 20 years in federal prison, and one count of money laundering, which is punishable by up to ten years. U.S. District Judge John F. Kness set sentencing for May 25, 2022.
The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI. The government is represented by Assistant U.S. Attorney L. Heidi Manschreck.
Haggerty and two business partners in March 2020 formed a company called At Diagnostics Inc. to sell personal protective equipment. The company reached an agreement with a hospital in Iowa to sell 500,000 N95 respirator masks for $2.495 million. Haggerty created an invoice to reflect the agreement and to instruct the hospital on where to wire the payment. Based on the invoice, the hospital on March 31, 2020, wired the money to a bank account that Haggerty falsely claimed was an At Diagnostics account but which was actually the account of a different business solely controlled by Haggerty.
Haggerty admitted in a plea agreement that he spent part of the money for his own personal benefit, including purchasing two Maserati automobiles and a Land Rover sport-utility vehicle, paying nearly $189,000 to credit card companies, withdrawing more than $147,000 in cash, and paying $20,000 to a personal friend. Haggerty further admitted that At Diagnostics never delivered the masks, and when questioned about it by the hospital he falsely claimed that the bank had no record of the hospital’s payment being received. When his business partners also questioned Haggerty about the whereabouts of the money, Haggerty altered a bank statement to make it appear as if the hospital’s funds had not been received.
Haggerty admitted in the plea agreement that he engaged in similar conduct with a hospital based in Illinois. After reaching an agreement with that hospital to sell one million N95 masks for nearly $4.5 million, the hospital requested that an initial payment be sent to an escrow account instead of the account Haggerty provided. When At Diagnostics failed to fulfill the hospital’s order, the money in escrow was returned. The Illinois hospital, however, later inadvertently wired more than $933,000 to Haggerty’s account in connection with a second order for 500,000 N95 masks that were never delivered. Haggerty admitted in the plea agreement that he spent some of this money for his own personal use and did not return any of it.