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Date: 12-28-2022
Case Style:
United States of America v. Dennis W. Haggerty
Case Number: 1:20-cr-00789
Judge: John F. Kness
Court: United States District Court for the Northern District of Illinois (Cook County)
Plaintiff's Attorney: United States Attorney’s Office
Defendant's Attorney:
Dennis W. Haggerty, Jr., age 46, and two business partners in March 2020 formed a company called At Diagnostics Inc. to sell personal protective equipment. The company agreed to sell 500,000 N95 respirator masks to a hospital in Iowa for $2.495 million. Haggerty created an invoice to reflect the agreement and to instruct the hospital on where to wire the payment. Based on the invoice, the hospital on March 31, 2020, wired the money to a bank account that Haggerty falsely claimed was an At Diagnostics account, but which was actually the account of a different business solely controlled by Haggerty.
Haggerty spent part of the money for his personal benefit, including purchasing three luxury automobiles, paying nearly $189,000 to credit card companies, withdrawing more than $147,000 in cash, and paying $20,000 to a personal friend. At Diagnostics never delivered the masks, and when questioned about it by the hospital he falsely claimed that the bank had no record of the hospital’s payment being received. When his business partners questioned Haggerty about the whereabouts of the money, Haggerty altered a bank statement to make it appear as if the hospital’s funds had not been received.
Haggerty also engaged in similar conduct with a hospital in Illinois. After agreeing to sell one million N95 masks for nearly $4.5 million, the hospital requested that an initial payment be sent to an escrow account instead of the account Haggerty provided. When At Diagnostics failed to fulfill the hospital’s order, the money in escrow was returned. The hospital, however, later inadvertently wired more than $933,000 to Haggerty’s account in connection with a second order for 500,000 N95 masks that was never fulfilled. Haggerty spent some of this money for his personal use and did not return any of it.
Haggerty’s sentence included an enhancement for obstruction of justice. In his initial court filings in advance of sentencing, Haggerty claimed that he had relied on a bill of lading purportedly sent by a supplier of the N95 masks, and that he began spending the money from the first hospital believing it was owed to him from his business partners. Haggerty later withdrew those claims and admitted that he had created a fake bill of lading. He acknowledged that his conduct warranted the enhancement.
Fraud by Kent Morlan
Outcome: THE DEFENDANT: pleaded guilty to Counts 3 and 6 of the Indictment. Count(s) I, 2, 4, and 5 are dismissed on the motion of the United States. The defendant is hereby committed to the custody of the Federal Bureau of Prisons to be imprisoned for a total term of: 57 months as to Count 3 and 6 of the Indictment. Terms to run concurrently. The defendant shall surrender for service of sentence at the institution designated by the Bureau of Prisons: before 12:00 pm on 2/17/2023. Upon release from imprisonment, you shall be on supervised release for a term of: 3 years as to Counts 3 and 6 of the Indictment. Terms to run concurrently. Criminal Monetary Penalties. Schedule of Payments.
Plaintiff's Experts:
Defendant's Experts:
Comments: