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Burr Ridge man pleads guilty to PPE fraud
A Burr Ridge businessman pleaded guilty to a federal fraud charge for swindling $2.5 million from a hospital that paid him for personal protective equipment during the early weeks of the COVID-19 pandemic.
BURR RIDGE, Ill. - A Burr Ridge businessman pleaded guilty to a federal fraud charge for swindling $2.5 million from a hospital that paid him for personal protective equipment during the early weeks of the COVID-19 pandemic.
Dennis W. Haggerty, 45, pleaded guilty to one count of wire fraud and one count of money laundering.
According to prosecutors, Haggerty and two business partners formed a company called At Diagnostics Inc. in March 2020 to sell protective equipment.
The company reached an agreement with a hospital in Iowa to sell 500,000 N95 respirator masks for $2.495 million.
Prosecutors say Haggerty created an invoice to reflect the agreement and instructed the hospital on where to wire the payment.
The hospital wired the money on March 31, 2020 to a bank account that Haggerty falsely claimed was an At Diagnostics account. However, it was actually the account of a different business that was solely controlled by Haggerty.
In a plea agreement, Haggerty admitted that he spent part of the money for his own personal benefit, including purchasing two Maserati automobiles and a Land Rover sport-utility vehicle.
He paid nearly $189,000 to credit card companies, withdrew more than $147,000 in cash and gave $20,000 to a personal friend.
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Haggerty also admitted that At Diagnostics never delivered the masks.
When the hospital questioned Haggerty about the masks, he falsely claimed the bank had no record of the hospital's payment being received.
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When Haggerty's business partners questioned him about the whereabouts of the money, Haggerty altered a bank statement to make it seem as if the hospital's funds had never been received.
Haggerty also admitted that he engaged in similar conduct with a hospital based in Illinois.
After reaching an agreement with the Illinois 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, and not the account Haggerty provided, prosecutors said.
When At Diagnostics did not fill the hospital's order, the money in escrow was returned to the hospital.
However, the hospital later inadvertently wired over $933,000 to Haggerty's account in connection to a second order of masks that were never delivered.
Haggerty admitted that he spent some of that money for his own personal use and did not return any of it.