Burr Ridge businessman pleads guilty to defrauding hospital of more than $2.5 million
A Burr Ridge man has pleaded guilty to using more than $2.5 million a hospital paid him for scarce face masks during the first few weeks of the COVID-19 pandemic to instead buy things for himself, including Maserati automobiles.
Dennis W. Haggerty Jr., 45, pleaded guilty Tuesday to one count of wire fraud and one count of money laundering, according to a news release from John Lausch Jr., U.S. attorney for the Northern District of Illinois.
Haggerty and two business partners formed At Diagnostics Inc. of Rolling Meadows in March 2020 to sell personal protective equipment. The company agreed to sell 500,000 N95 respirator masks to an Iowa university hospital for $2.495 million.
Haggerty created an invoice to reflect the agreement and instruct the hospital where to send the payment, according to the plea agreement.
On March 31, 2020, the hospital wired the payment, as directed, to an account Haggerty falsely claimed belonged to At Diagnostic. Instead, it belonged to a different business, At Media, controlled solely by Haggerty. At Diagnostics did not have a bank account at the time.
Haggerty used the money to buy a 2013 Maserati GranTurismo, a 2017 Maserati Ghibli and a 2015 Land Rover Range Rover. He also paid nearly $189,000 to credit card companies, withdrew more than $147,000 in cash and paid $20,000 to a friend.
At Diagnostics never delivered the masks. When hospital officials asked about it, Haggerty claimed there was no record of a payment being received.
When his business partners asked where the money was, Haggerty altered a bank statement to make it appear the hospital had not paid and told a bank employee not to speak to the partners about the account.
Haggerty also admitted in the plea agreement that he did something similar with another hospital.
The Chicago hospital ordered almost a million masks for about $4.5 million. It insisted on putting the first part of the payment into an escrow account. The money was returned when At Diagnostics did not deliver the masks.
Then the hospital inadvertently sent more than $933,000 to Haggerty's account for another order of masks, which, again, were never delivered. Haggerty spent some of the money on personal items and used some of it to repay the Iowa hospital.
The money-laundering charge alleged that when Haggerty learned the Iowa hospital was asking for its money back, he transferred $1.3 million from the At Media account to another bank account he controlled.
Haggerty could be sentenced to up to 30 years in prison. But based on his lack of criminal history and other factors, the advisory sentencing guideline is likely to be 37 to 46 months in prison, according to the plea agreement. Sentencing is scheduled for May 25.