Financial Crime: Illinois businessman admits swindling hospital out of $2.5 million for N95 masks — and using it to buy Maseratis, pay credit-card bills
An Illinois businessman pleaded guilty to ripping off a hospital to the tune of $2.5 million by offering to sell it high-grade surgical masks, but not delivering and then using the money to buy Maseratis and a Range Rover.
Dennis Haggerty, Jr., of Burr Ridge, Ill., was accused of setting up a company, At Diagnostics, Inc., just as the COVID-19 pandemic was beginning in March 2020, to sell N95 respirator masks.
Haggerty and his two partners soon reached a deal with an Iowa hospital to sell it 500,000 masks for $2.495 million, prosecutors said. But instead of having the money directed to At Diagnostics, Haggerty instructed the hospital to send the payment to a separate company, At Media, which only he controlled.
Once the money arrived in the At Media account, prosecutors say Haggerty used it to buy a Maserati Grandturismo and a Maserati Ghibli, as well as a Range Rover. He also used $189,000 to pay off his credit card bills and withdrew $148,000 in cash. He also paid $20,000 to a friend.
Prosecutors say Haggerty withdrew the money in increments lower than $10,000 so as not to trigger the bank’s mandatory reporting requirements to report transactions of $10,000 and above to the government.
A message left with Haggerty’s attorney wasn’t immediately returned.
After a month had passed and the masks hadn’t been delivered to the Iowa hospital, the hospital demanded its money back. Haggerty then claimed that the money had never been received and showed hospital officials and his partners doctored bank statements.
Prosecutors said Haggerty tried to pull a similar scheme on an Illinois hospital, selling it one million masks for $4.5 million. But officials there insisted that the first part of the payment be made to an escrow account, so they were able to recover the money when the masks weren’t delivered.
Investigators say, however, that the Illinois hospital inadvertently made a second payment of $933,000 directly to Haggerty’s At Media account and that he used $250,000 of it to pay back the Iowa hospital he had originally duped.
Haggerty pleaded guilty on Tuesday to one count of wire fraud and one count of money laundering. He faces up to 30 years in federal prison when he is sentenced.