An Illinois businessman has been charged with wire fraud after stealing more than $2.6 million from the University of Iowa Hospitals and Clinics and a Chicago hospital that was supposed to pay for “scarce personal protective equipment amidst the COVID-19 pandemic,” the U.S. Attorney’s Office in Chicago announced on Tuesday.
According to the complaint filed in federal court, the two hospitals paid deposits totaling more than $3 million into a bank account they believed belonged to At Diagnostics Inc., but was actually a personal account belonging to Dennis W. Haggerty Jr., the company’s president. Haggerty and two partners started the company, located in the Chicago suburb of Rolling Hills, on March 23 to take advantage of the sudden nationwide shortage of PPE.
On March 30, UIHC signed a contract to buy N95 masks from the company, which had only opened its doors one week earlier. UIHC put down a deposit of $2,495,000 for the masks. The other hospital, Northwestern Memorial Healthcare, signed its contract with At Diagnostics for masks four days before UIHC did, and put down a deposit of $1,245,100.
“When At Diagnostics failed to deliver the masks on time, Haggerty allegedly falsely claimed to one hospital that his bank had no record of the payment being received,” according to a statement from the U.S. Attorney’s Office. “After his business partners confronted Haggerty about the whereabouts of the money, Haggerty altered a bank statement to make it appear as if the funds had never been received.”
The complaint against Haggerty alleges he used approximately $1.6 million of UIHC’s deposit and $1 million of the deposit from Northwestern Memorial “for his own personal benefit, including purchasing two Maserati automobiles and a Land Rover sport-utility vehicle.”
The complaint doesn’t directly name UIHC, but instead refers to it as “Hospital A.” According to court filing, “Hospital A is a public teaching hospital located on the campus of University A, a large public university located in Iowa City, Iowa.”
Northwestern Memorial is equally recognizable in the complaint’s description of “Hospital B.”
Haggerty has been charged with one count of wire fraud. He could face up to 20 years in prison if convicted.
Neither UIHC nor Northwestern Memorial has publicly commented on the case yet.
