Prosecutors in the John Paul Funes case have taken the first step towards trying to recover money the former hospital fundraiser stole from the Our Lady of the Lake Foundation, which he ran for more than a decade.
Earlier today, U.S. Judge John deGravelles signed a Preliminary Order of Forfeiture, which clears the way for prosecutors to begin the discovery process to determine the extent of Funes’ assets.
“This gives them the ability to go and do discovery to find out from him what he has, what his assets are, how much debt, where all his stuff is,” says veteran defense attorney Karl Koch, who is not involved in the case. “Then, ultimately, the court will set a specific amount of forfeiture and begin transferring title of that property to the government.”
Separately, Funes has also been ordered to pay restitution in the case.
It is not yet clear how much Funes will ultimately be ordered to repay altogether in fines, forfeiture and restitution in connection with the embezzlement scheme, first uncovered and announced by OLOL last fall. But OLOL officials have said their internal and third-party financial audits have determined that he stole $810,000 over the course of several years.
Court documents have been more vague. Last month, Funes pleaded guilty to one count of money laundering and one count of wire fraud in connection with the scheme, admitting the loss amounted to “at least $550,000,” though sources familiar with the case say that amount should not be seen as a specific dollar figure but rather a minimum amount.
Though forfeiture (a financial penalty for committing a crime) is different than restitution (a repayment to the victim), Funes will likely only pay once, not twice, for his crime. The ultimate goal is to make the victim—OLOL—whole again, and since Funes is cooperating with prosecutors, anything they recover in forfeiture will likely be applied towards restitution.
“The government wants to help the victim try to recover its money,” Koch says.
In fact, Funes’ plea agreement specifies that any assets forfeited prior to sentencing will be counted towards the restitution he ultimately owes. A sentencing date has not yet been set, though it is likely still several months away.
“That is really an inducement on the defendant to pay as much back as soon as possible,” Koch says.
Any assets Funes may have recently transferred to close family members will also likely be subject to discovery by the feds.
“If there is any suggestion a defendant is transferring assets to put them beyond the reach of the government, they’re not shy about going after those,” Koch says. “They’ll bust through anything like that.”