A Virginia man accused of stealing nearly $8 million from civil settlements that were supposed to be paid to children who lost their parents due to medical malpractice admitted to the crime during his court hearing Monday (June 15).

According to court documents, Joseph E. Gargan (59), hailing from Round Hill was a former chief executive of an Arlington based organization called the Pension Company Inc., that handles settlements between parties in civil suits, and transfers the money from defendants to petitioners and buys annuities for children involved in such suits.

The company in a news release in 2014 claimed that it was the fourth-largest structured settlement company in the United States.

“The United States government entered into settlement agreements with plaintiffs in six separate matters. Each of these cases involved children who either claimed to be injured as a result of medical malpractice or who suffered the loss of a parent through alleged medical negligence that occurred at a hospital or clinic operated or insured by the federal government,” an official release from the district attorney’s office read.

According to the agreement, the U.S. was bound to pay the plaintiff a sum of money and to purchase an annuity on behalf of the injured child. Between December 2015 to August 2019, the government transferred a total of $15,925,000 to the company in order to purchase the annuities and settle the six agreements.

“Gargan embezzled $6,925,000 of this money,” the statement said.

Prosecutors revealed that in another case, a New York-based hospital paid over $1 million to purchase an annuity for the care and ongoing medical treatment of a child. Gargan is accused of stealing all of that money.

He is accused of concealing his criminal acts by creating false documents that claim he purchased the annuities when, in fact, he had converted that money for his personal use.

“Gargan also made payments to the plaintiffs falsely claiming the payments were proceeds from an annuity, when, in fact, the payments were made only to conceal his criminal conduct. The total amount embezzled by Gargan is $7,957,750,” the release said.

Gargan faces a maximum penalty of 30 years in prison when he pleaded guilty to embezzlement of government funds and wire fraud during his sentencing on September 23.

Representational image of a man in handcuffs.