CHICAGO – A suburban Chicago businessman pleaded guilty today to a federal fraud charge for defrauding a hospital of $2.5 million that paid him for rare personal protective equipment during the first weeks of the COVID-19 pandemic.
DENNIS W. HAGGERTY, JR., 45, of Burr Ridge, Illinois, pleaded guilty to one count of wire fraud, which carries up to 20 years in federal prison, and one count of money laundering, which carries up to up to ten years. U.S. District Judge John F. Kness set the sentence 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 FBI’s Chicago field office. The government is represented by Assistant U.S. Attorney L. Heidi Manschreck.
Haggerty and two business partners formed a company called At Diagnostics Inc. in March 2020 to sell personal protective equipment. The company has 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 tell the hospital where to transfer the payment. Based on the invoice, the hospital on March 31, 2020, wired the money to a bank account that Haggerty said was mistakenly an At Diagnostics account, but was actually another company’s account. controlled solely by Haggerty.
Haggerty admitted in a plea deal that he spent some of the money for his own benefit, including buying two Maserati automobiles and a Land Rover sports utility vehicle, paying nearly $189,000 to credit card companies. credit, 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 this by the hospital, he falsely claimed that the bank had no record of receiving payment from the hospital. When his business partners also questioned Haggerty about the whereabouts of the money, Haggerty altered a bank statement to make it appear that the hospital funds had not been received.
Haggerty admitted in the plea agreement that he engaged in similar conduct with an Illinois-based hospital. After reaching an agreement with this hospital to sell one million N95 masks for nearly $4.5 million, the hospital requested that an upfront payment be sent to an escrow account instead of the account provided by Haggerty. When At Diagnostics failed to honor the order from the hospital, the money in escrow was returned. The Illinois hospital, however, later inadvertently wired more than $933,000 to Haggerty’s account as part of a second order for 500,000 N95 masks that were never delivered. Haggerty admitted in the plea agreement that he spent some of that money for his personal use and returned none of it.