Executive stole $6.7M meant for injured babies, ‘lived lavishly' in Virginia, feds say
A Virginia man, the former executive of a program providing millions in state child benefits to families, stole more than $6.7 million meant to help babies injured during birth, federal prosecutors said.
John Hunter Raines 'lived lavishly' with the money he embezzled from the Virginia Birth-Related Neurological Injury Compensation Program's bank account, according to prosecutors.
As the program's chief financial officer and deputy director, Raines wired the program's funds to himself in at least 59 transactions from January 2022 through October 2023, according to the U.S. Attorney's Office for the Eastern District of Virginia.
The Birth-Injury Program helps families care for children with birth-related neurological injuries, including by compensating them for their children's medical and rehabilitation expenses.
Raines 'used his sensitive position of trust to steal millions of dollars designated for physically and intellectually disabled children — all so that Raines could fund an extravagant, private-jet-setting lifestyle for roughly 21 months,' prosecutors wrote in court filings ahead of Raines' March 5 sentencing hearing.
With the money, Raines spent more than $125,000 on private jet travels with his wife and friends, spent over $9,000 on private limousine services, used more than $100,000 for gambling and paid off various loan debts, according to prosecutors.
He also spent thousands on vehicles, luxury golf carts and cryptocurrency and paid 'at least $29,000 to an intimate partner' as well as tens of thousands of dollars to his wife's bank account, prosecutors said.
A federal judge sentenced Raines, 38, of Providence Forge, to nine years in prison on March 5 on mail fraud and money laundering charges, the U.S. Attorney's Office said in a news release.
He pleaded guilty to the offenses in October, according to prosecutors, McClatchy News previously reported.
Raines' defense attorney, William Benjamin Mann, didn't immediately return McClatchy News' request for comment March 6.
Mann previously told McClatchy News that Raines 'takes full responsibility for his actions and will continue to seek treatment for the addictions that contributed to his offenses.'
As an executive of the Birth-Injury Program, Raines was responsible for the program's finances and about $650 million in investments in 2023, prosecutors said.
'It is easy to cast Raines' crimes off as a fraud on an abstract program while losing sight of what the money he stole represents,' prosecutors wrote in a sentencing memorandum.
'The $6.7 million Mr. Raines stole would have been invested and paid out for claims in the future.'
'Selfish greed'
In the sentencing memorandum, prosecutors mentioned a few ways the money could've been used to support families.
The money could've paid for about 79 wheelchair-accessible medical vans, which cost an estimated $85,000 each, according to prosecutors.
It also could've covered expenses to outside caregivers for more than 270,000 hours of child care, prosecutors said.
While stealing from the program, Raines intentionally delayed audits, according to prosecutors. Under state law, an independent certified accountant was supposed to conduct an audit of the program's accounts every fiscal year, prosecutors said.
He stole the money 'for his own selfish greed,' prosecutors wrote in the sentencing memorandum.
Raines 'made direct cash payments to his own brokerage accounts as well as to the accounts of his wife and his mistress' and 'squandered the Birth-Injury Program's money at Rivers Casino, Virginia Lottery, and Colonial Downs Racetrack,' prosecutors said.
Raines also spent more than $19,000 on eight gold coins and a 100-oz silver bar, according to prosecutors.
'A heinous crime'
In the courtroom on March 5, Raines apologized to families who attended the hearing and said he struggled with gambling and alcohol addiction, WTVR-TV reported.
The father of a 4-year-old son who's a beneficiary of the Birth-Injury Program told the TV station: 'It's a heinous crime and I was shocked.'
The program didn't immediately respond to McClatchy News' request for comment March 6.
Ahead of sentencing, prosecutors credited Raines for pleading guilty as part of a pre-indictment resolution, the sentencing memorandum shows. However, they also noted that Raines has his own children who've experienced health struggles.
'Raines' own experiences raising children with health challenges should have given him empathy for the plight of sick and injured children,' they wrote in the sentencing memorandum.
'Instead, Raines made the deliberate choice time and time again, over the course of at least 21 months, to steal from other peoples' sick and injured kids.'
Providence Forge is about a 25-mile drive southeast from Richmond.
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