An Illinois businessman pleaded guilty March 1 to a federal fraud charge for swindling money from a hospital that paid him for N95 masks in the early weeks of the COVID-19 pandemic, according to the Justice Department.
Dennis Haggerty, of Burr Ridge, Ill., and two business partners formed a company in March 2020 to sell personal protective equipment. The company, At Diagnostics, entered into an agreement with an Iowa hospital to sell 500,000 N95 masks for $2.5 million. The hospital paid for the masks in late March, but Mr. Haggerty and his company never delivered them.
Mr. Haggerty falsely told the hospital that the bank account where the funds were wired was an At Diagnostics account. It was actually the account of a different business solely controlled by Mr. Haggerty. He admitted using the funds for his own personal benefit.
Mr. Haggerty pleaded guilty to wire fraud and money laundering, according to the Justice Department.
In his plea agreement, Mr. Haggerty admitted to engaging in similar conduct with an Illinois hospital. The hospital requested that an initial payment for 1 million N95 masks be sent to an escrow account instead of the bank account that Mr. Haggerty provided. When the order wasn't fulfilled, the money in escrow was returned. The hospital later inadvertently wired more than $933,000 to Mr. Haggerty's account in connection with a second order of masks that weren't delivered. Mr. Haggerty said he didn't return any of the money to the hospital.