Case: 1:20-cr-00789 Document #: 68 Filed: 08/26/22 Page 1 of 10 PageID #:383

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

UNITED STATES OF AMERICA

No. 20 CR 789
v.
Judge John F. Kness
DENNIS W. HAGGERTY JR.

GOVERNMENT’S POSITION PAPER AS TO SENTENCING FACTORS

The UNITED STATES OF AMERICA, by its attorney, JOHN R. LAUSCH, JR.,

United States Attorney for the Northern District of Illinois, hereby submits its

position paper as to sentencing factors, and asks this Court to impose a sentence

within the Guidelines range of 37 to 46 months’ imprisonment, along with a period of

supervised release, restitution to the victims, and a forfeiture judgment.

I. BACKGROUND

In the early months of the COVID-19 pandemic, two university hospitals

needed then-scarce personal protective equipment so that their staffs could safely

treat patients. Regrettably, they agreed to buy over $3 million worth of N95

respirators from defendant Dennis Haggerty’s newly formed medical supply

company. Once they sent money to an account that Haggerty controlled—and falsely

claimed belonged to the company—Haggerty did not use the money to buy a single

N95. Instead, he quickly transferred the money to personal accounts, spent it on

multiple luxury cars for himself, and paid other personal expenses.

When defendant’s company failed to deliver the equipment, both hospitals

cancelled their orders and sought refunds of their payments. Haggerty repeatedly lied
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to one of the hospitals, denying that he had ever received the hospital’s wire transfer

and falsely claiming that he had requested a “skip trace” on the wire. He doctored a

bank statement to back up his lies, and he continued spending and transferring the

hospital’s money.

Once the first hospital (Hospital A) and his business partners discovered

Haggerty lies, defendant made a few partial payments to Hospital A—using some of

the money he had stolen from Hospital A as well as money from the other hospital

(Hospital B)—to lull Hospital A into believing he would make things right. Yet, even

then, he knew that he was not entitled to the funds from Hospital B that he had used

to pay Hospital A—he had simply robbed Peter to pay Paul. By that point, he had

also transferred almost $250,000 of Hospital B’s funds to accounts he controlled. A

few weeks after sending Hospital B’s funds to Hospital A, in yet another false

promise, he assured Hospital B that he would return its funds. He did not even begin

to do so, however, until almost two years later, after entering his guilty plea in this

case. He still owes both hospitals approximately $2 million.1

Because of his scheme and his money laundering, defendant was charged by

indictment with four counts of wire fraud, in violation of Title 18, United States Code,

Section 1343 (Counts One through Four), and two counts of money laundering, in

violation of Title 18, United States Code, Section 1957(a) (Counts Five and Six).

1Further details of the defendant’s scheme are set forth in the Government’s Version of the
Offense, which is appended to the PSR.
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Pursuant to a plea agreement, on March 1, 2022, he pleaded guilty to Count Three

and Count Six of the indictment. Doc. 58.

II. GUIDELINES CALCULATIONS

The government agrees with the offense level and criminal history calculations

in the PSR submitted by the United States Probation Office. With a total offense level

of 21 and a criminal history category of I, the resulting advisory Guidelines range is

37 to 46 months’ imprisonment. PSR ¶ 90.

III. SENTENCING FACTORS AND GOVERNMENT’S

RECOMMENDATION

The Sentencing Guidelines provide a starting point and initial benchmark for

sentencing, Gall v. United States, 552 U.S. 38, 49–50 (2007), and must be considered

along with all of the factors set forth in Title 18, United States Code, Section 3553(a).

Considering these factors, the government recommends a sentence within the

Guidelines range, a term of supervised release, restitution, and an order of forfeiture.

Such a sentence is sufficient, but not greater than necessary, to reflect the seriousness

of defendant’s crimes, promote respect for the law, provide just punishment, and

afford adequate deterrence.

A. The Nature and Circumstances of the Offense

While his scheme did not span a particularly long time, it was brazenly

opportunistic and exploitative and netted millions of dollars. Haggerty took

advantage of hospitals’ desperate need for personal protective equipment at the

beginning of a once-in-a-lifetime pandemic. And instead of providing that equipment,

he directed the hospitals’ money toward his own lavish lifestyle. In the process,
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Haggerty transferred money repeatedly across multiple accounts, often in amounts

just below federal reporting requirements, so that he could launder the dirty funds

from his scheme.

Haggerty’s overriding concern was in keeping the profits of his fraud, no matter

the cost to others. His falsification of a bank statement, his multiple lies to the

hospitals, his money laundering, and his retention of millions of dollars in ill-gotten

funds—even after the jig was up—were all particularly egregious aspects of his

conduct, and they show that his crimes were not merely a temporary lapse in

judgment. Similarly, his efforts to avoid accountability—including by lying to law

enforcement—while unsuccessful, are further evidence that he intended to extend his

lucrative scheme for as long as he could get away with it.

B. The History and Characteristics of the Defendant

The defendant is 46 years old, has enjoyed a very comfortable lifestyle, and was

more than capable of earning honest money. He has a limited criminal history that

primarily consists of DUIs. PSR ¶¶ 51, 53, 54. Unlike many defendants who come

before this Court, the defendant had a stable childhood, with two working parents

and no reported abuse or neglect. PSR ¶ 62. Defendant lives in a large, six-bedroom

home worth more than $800,000; he owns multiple vehicles; and he reports a seven-

figure annual salary from his current employer. PSR ¶¶ 63, 64, 76, 84. He has no

reported health issues and denies that his conduct resulted from any addictions or

substance abuse. Id. ¶¶ 68, 70. Likewise, although the defendant’s involvement in

this offense has been stressful—a consequence of his own making—he has not sought

treatment for, nor been diagnosed with, a mental health condition. PSR ¶¶ 68-69.
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In short, nothing about defendant’s background suggests that he resorted to

crime out of financial desperation, addiction, impoverishment, lack of access to

mental health care or therapy, or any reason other than simple greed. Cf. United

States v. Anderson, 517 F.3d 953, 966 (7th Cir. 2008) (“[w]hile many criminals commit

crimes from lack of opportunity and desperation, [defendant] acted out of greed”).

This is also evident from the kinds of expenditures defendant made with his fraud

proceeds—including purchases of three luxury cars. As the Seventh Circuit has noted,

“[c]riminals who have the education and training that enables people to make a

decent living without resorting to crime are more rather than less culpable than their

desperately poor and deprived brethren in crime.” United States v. Stefonek, 179 F.3d

1030, 1038 (7th Cir. 1999).

The payments defendant has made toward restitution deserve some

acknowledgement. Following his guilty plea, defendant has made payments to

Hospital B pursuant to a negotiated settlement agreement, and he has made some

payments to Hospital A. Although the payments do reflect some effort toward making

his victims whole, they are relatively small in light of his purported income, and they

are not particularly illuminating with respect to his contrition or remorse. While they

should be acknowledged, as the First Circuit has noted, over-crediting such efforts by

a defendant of means would undermine important goals of sentencing—including

engendering the public’s belief in the fairness of the justice system and deterring

white-collar crime. See United States v. Mueffelman, 470 F.3d 33, 40 (1st Cir. 2006)

(desirable sentencing goals include “the deterrence of white-collar crime (of central
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concern to Congress), the minimization of discrepancies between white- and blue-

collar offenses, and limits on the ability of those with money or earning potential to

buy their way out of jail”).

C. The Need for Just Punishment, to Promote Respect for the Law,
and to Afford Adequate Deterrence

The defendant’s serious, opportunistic, and extremely lucrative scheme, along

with his additional money-laundering conduct, warrant a substantial period of

imprisonment to fully account for the harm caused by the crimes, to deter further

crime, and to promote respect for the law.

As this case illustrates, exploitation of the Covid-19 pandemic was (and still is)

a highly profitable business. Both public and private actors have had to devote

substantial, unprecedented resources to address the pandemic’s many effects on our

lives. With such resources on the table, there will always be individuals, like

defendant, who see an opportunity for undeserved profit. Given this unfortunate

truth, in addition to specifically deterring the defendant, the sentence must afford

adequate general deterrence to other would-be criminals. See United States v.

Heffernan, 43 F.3d 1144, 1149 (7th Cir. 1994) (“Considerations of (general) deterrence

argue for punishing more heavily those offenses that either are lucrative or are

difficult to detect and punish, since both attributes go to increase the expected

benefits of a crime and hence the punishment required to deter it.”); see also United

States v. Brown, 880 F.3d 399, 405 (7th Cir. 2018) (“endors[ing] the idea that white-

collar criminals act rationally, calculating and comparing the risks and the rewards
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before deciding whether to engage in criminal activity. They are, therefore, prime

candidates for general deterrence”) (internal quotation marks and citation omitted).

Deterrence—and promotion of respect for the law—also requires affirming the

community’s commitment to enforcement of laws through punitive criminal

sanctions. As Judge Tharp has explained,

The question isn’t solely how much [crime] this sentence will prevent.
It’s how much crime will occur if we don’t faithfully and meaningfully
prosecute and penalize this kind of conduct. Because if we contribute to
an idea that well, this is just white collar crime, this is crime that people
get a slap on the wrist for, this is a crime where there’s no meaningful
criminal sanction, so why should I bother obeying the rule of law when
others are not doing so? That’s the danger that needs to be combatted
here, and that’s the role that this sentence also has to play in
contributing to confidence that this kind of criminal conduct will be met
with significant criminal sanctions.

United States v. Mir, No. 18 CR 397, Sent Tr., R. 60, p. 29.

Here, a sentence within the Guidelines range is sufficient, but not greater than

necessary, to accomplish these goals. Such a sentence would account for both the

defendant’s limited criminal history and the large amount of money he took—factors

that are included as part of the Guidelines calculation—as well as both the relatively

brief duration of the scheme and the defendant’s extraordinary exploitation of two

hospitals during an unprecedented global pandemic—factors that are not included as

part of the Guidelines calculation. On balance, these factors point to the need for a

substantial sentence. It is imperative that a strong message of deterrence is received

by other would-be offenders who seek to unlawfully profit from the Covid-19

pandemic.
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D. Supervised Release

In addition to the term of imprisonment, the government recommends a period

of supervised release. The purposes of a term of supervised release include

“rehabilitation, deterrence, training and treatment, protection of the public, and

reduction of recidivism.” United States v. Kappes, 782 F.3d 828, 836 (7th Cir. 2015).

For the reasons below, the conditions recommended by the Probation Office will meet

these goals for this defendant.

The government agrees with the three mandatory conditions of supervised

release set forth by the Probation Office. PSR ¶ 94. The government also agrees with

the discretionary and special conditions they recommend, which are (1) necessary to

facilitate supervision by the Probation Office; (2) necessary to ensure he meets the

financial obligations imposed in the judgment, as well as such obligations to his

dependents; (3) necessary to promote his respect for the law, deter him from

committing future crimes, and to protect the public from further crimes by him;

(4) necessary in light of his prior alcohol-related convictions; and (5) necessary to

facilitate his reintegration as a law-abiding member of society.

The government recommends one additional condition: discretionary condition

#5, which the government proposes should restrict defendant’s occupation, business,

or profession as follows: With respect to any entity for which defendant is not the sole

owner, defendant shall not control and/or manage the entity’s finances, including its

bank accounts. The government believes this condition is necessary in light of the

specific manner in which defendant conducted his scheme (i.e., transferring money

from organizational accounts to which he had access into his own personal accounts;
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falsifying bank statements; and money laundering), and bears a “reasonably direct

relationship” to the offending conduct.

E. Restitution

Pursuant to Title 18, United States Code, Section 3663A, the Court must order

defendant to make full restitution to victims, and defendant also has agreed,

pursuant to the plea agreement, to pay the full amount of loss to these victims, which

is $2,578,825. The loss amounts for each victim are as follows, as noted in PSR ¶ 82:

Victim Amount
Hospital A $1,645,000
Hospital B $933,825
Total $2,578,825

As of June 21, 2022, undersigned counsel understands that defendant has

made payments totaling $300,000 to Hospital A and $247,574.70 to Hospital B. These

reduce the total amount owed as follows:

Victim Amount Outstanding

Hospital A $1,345,000
Hospital B $686,250.30
Total $2,031,250.30

F. Forfeiture

As part of his plea agreement, defendant agreed to the entry of a personal

money judgment in the amount of at least $1,645,000, which represents some of the

proceeds traceable to the offense. Notably, this amount reflects only the proceeds of

the conduct related to Hospital A. It is the government’s position that the personal

monetary judgment should be $2,578,825, which represents the total amount of

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proceeds traceable to the offense—both the Hospital A and the Hospital B conduct.

The government will separately file a motion for an order of forfeiture.

IV. CONCLUSION

For the reasons stated here, the government respectfully requests that this

Court impose a sentence within the Guidelines range, a period of supervised release,

a forfeiture judgment, and restitution to the victims.

Respectfully submitted,

JOHN R. LAUSCH, JR.

UNITED STATES ATTORNEY

By: /s/ L. Heidi Manschreck

L. HEIDI MANSCHRECK
Assistant United States Attorney
United States Attorney’s Office
219 South Dearborn, 5th Floor
Chicago, Illinois 60604
(312) 469-6205
heidi.manschreck2@usdoj.gov

Dated: August 26, 2022