BIRMINGHAM, Ala—The CEO of a now defunct credit union has been arrested and charged in a 112-count superseding indictment alleging a seven-year conspiracy that included fraud while he led the credit union.
Jonathan Wade Dunning, 51, was arrested by federal agents and charged with crimes from his time at the credit union and while CEO of two non-profit health clinics for the poor and the homeless, according to the United States Attorney’s Office for the Northern District of Alabama. The indictment follows an investigation by that office, along with the FBI, the IRS, and the U.S. Department of Health and Human Services’ Office of Inspector General.
According to authorities, Dunning, who was arrested while at a resort in Hoover, Ala., was involved in a seven-year conspiracy that involved wire fraud, bank fraud and money laundering related to his involvement with Birmingham Health Care (BHC), Central Alabama Comprehensive Health (CACH), Birmingham Financial Federal Credit Union (BFFCU), and a group of for-profit businesses known as the “Synergy Entities.”
NCUA placed Birmingham Financial FCU into conservatorship in October of 2011. The small credit union had assets of just $1.3-million and 429 members drawn from an FOM of employees of the Birmingham Housing Authority and Birmingham Health Care.
Over the years, according to the charges, BHC and CACH received millions of dollars in federal grant funds through the Health Resources & Services Administration (HRSA) to further their missions of providing healthcare services to underserved populations.
According to the superseding indictment, Dunning was the CEO of BHC and CACH for a period of time and left those jobs to run his for-profit businesses. Even after leaving as CEO, however, Dunning continued to exercise control over BHC and CACH, according to the Superseding Indictment.
The indictment further alleges that Dunning served as president, board chairman, and/or loan officer at BFFCU during a period between October 2008 and October 2011 and that various crimes occurred during that period and in his capacity with the credit union.
According to the superseding indictment Dunning participated in a conspiracy and executed schemes to defraud that deprived BHC, CACH, and others of substantial resources, including federal funds. The indictment further alleges that Dunning engaged in money laundering. The indictment seeks forfeiture of all proceedings of the alleged crimes.
"Criminals don't get to live lavish lifestyles by stealing federal money meant to provide healthcare to the poor and the homeless," said U.S. Attorney Joyce White Vance. "My office will vigorously prosecute health care fraud; working to ensure that these funds go to the people they are intended to help, and to see that criminals go to jail.”
Local media reports quoted defense attorneys as saying Dunning is being mistakenly implicated in the wrongdoing of others.