Smoke, Mirrors, and Medical Bills

0:09On the outskirts of Richmond, Virginia, eight miles from downtown and the tobacco-built high-rises, John Hunter Raines sits at his desk, staring at his computer screen. It's an anonymous office park, a six-story blue glass building that houses the Virginia Birth Injury Fund, a compensation program created to support families affected by birth-related neurological injuries. We're referring to injuries sustained during labor or delivery that include severe permanent motor or cognitive impairments. These are lifelong issues, not minor or temporary injuries. Raines is the chief financial officer, the man who watches the money.

0:51Staring at his computer screen, he's looking at the bank accounts of the fund, which have balances in the multi, multi millions. His mouse hovers over the big button at the bottom, the transfer button. If he clicks it, Raines will be initiating an infusion of cash that benefits one person, himself, because the destination of that money is his own personal account. If he closes the window, it's nothing more than a brief dalliance with a felony, a moment of temptation and nothing more. He moves the mouse back and forth between transfer and exit. If you've listened to this show for any length of time, you know people will do just about anything to get ahead, especially at the expense of others.

1:41They'll lie. They'll steal. They'll help themselves to what they think they deserve. What they've convinced themselves they're entitled to. And throughout these cases, we've read the emails. We've seen the transactions. We've heard all the excuses. These people aren't just morally flexible. They're convinced they're justified in their actions. They just need the right circumstance to take their shot. That's what makes them opportunists. and the worst are morally bankrupt and willing to step over and on some of the most disadvantaged in order to get what they want. In all the years we've covered these stories, few have stooped as low as this.

2:27Reigns couldn't help himself. He didn't exit the page. He clicked transfer.

2:44This is The Opportunist, an original podcast from Podcast One. You're listening to the story of John Hunter Raines, a Virginia-based CFO who exploited the very money he was trusted to manage. I'm your host, Sarah James McLaughlin.

3:14In late 2020, John Hunter Raines was living in Providence Forge, Virginia. He had just started a brand new job. He's in his late 30s. He lives in a place called New Kent County, which is kind of a suburb of Richmond. A married father of three kids. That's Michael Schwartz. He's a reporter with Richmond BizSense. I guess he got with an accounting degree, got a CPA certification and seemingly well-educated, smart guy. On the surface, Reigns had a good life. He lived near a golf course in a neighborhood of manicured lawns and oversized homes. He wasn't rich, exactly, but he was doing just fine. Reigns' new role was as chief financial officer for the Virginia Birth-Related Neurological Injury Compensation Program.

4:06Even though he had this title of CFO, which sounds like a big title, the salary was not a major salary at all. The Virginia Birth Injury Fund does important work to provide funds to parents whose children were injured during the birthing process, leaving the children disabled and in need of lifelong caretaking. It's basically a giant insurance fund that was created by state statute in Virginia. This fund is all to protect and financially support babies who are injured either neurologically or basically either brain injuries or spinal cord injuries that occur during the birthing process. The point of this fund is to pay for the wheelchairs that these kids need because most of them are permanently wheelchair bound for the handicapped accessible vans that they need.

4:56Some of them are on breathing machines that are attached to their wheelchairs and all that kind of stuff, nurses and support for the parents. The money is really important. It's supposed to be there to help fund these kids for life. The fund was established by the Virginia General Assembly in 1987 to try and reduce malpractice claims, and it's funded by hospitals and health care providers that pay into it annually rather than taxpayer dollars. As you might expect, the cost of caring for someone with a severe birth injury adds up. Over a lifetime, it can be astronomical, which means a lot of money flows through the fund.

5:37It had grown to be like a$600 or$700 million pool of money. And the money is paid in by doctors and hospitals, basically. They're paying insurance premiums, essentially, into this fund. Despite the money involved, the organization's office is modest. It really doesn't scream big dollars or flashy contributions. It's not in a shiny downtown high-rise with floor-to-ceiling windows. It's somewhat obscure. They have kind of a nondescript office out in the suburbs. It operates kind of in obscurity because it's sort of this niche insurance fund. It's still just not very well-known at all. As CFO, Reigns had access.

6:23He moved money. Big amounts. In March 2023, over$160 ,000 in a single transfer. A month earlier, more than$200 ,000. Nothing about that sounds odd at first. Transfers are part of the job. But the money wasn't going to a hospital, a vendor, or a beneficiary. It was going to Reigns, to his personal bank account. Maybe he saw this money and was like, maybe I'll just try this and see what happens. And he did it and no one noticed. And then he just kept going. As CFO of the Virginia Birth Injury Fund, Reigns could cover his own tracks. And maybe that's why he didn't stop with the transfers to his personal accounts.

7:10He started testing just how far he could push it. He bought what you would probably describe as kind of a McMansion. I think it was almost like a$600 ,000 house. And didn't pay for it in cash right away, but paid off the mortgage within the same year of buying the house, which is also unusual for someone at that income bracket, probably. Managing the books for a fund worth over$700 million came with legal responsibilities. It was up to Reigns to provide the files, data, and receipts for a series of audits conducted by an outside firm. That level of oversight is standard. When numbers get that big, someone from the outside is expected to take a look inside.

7:56They were supposed to file financial reports and be audited once a year by an outside auditor and file financial reports with the state because they are a quasi-governmental agency. The audits weren't happening. Reigns kept finding ways to stall. He was essentially being an obstacle to making those audits happen. So as a CFO, he would have been directly involved with this outside auditor coming in and wanting all the books and the financials. And he was making that difficult on this auditor to delay those audits. When auditors came asking for documents and ledgers, Reigns just didn't hand them over.

8:39For three years, he held up the process. And yet, even while avoiding audits and siphoning money from the Virginia Birth Injury Fund, Reigns kept up appearances. Whenever a claimant submitted a request, he made sure to respond promptly. My interaction with him, I never struggled with anything. That's one of the fund's claimants who asked not to be identified. For the purposes of this story, we'll refer to her as parent number one. He was always willing to give me what I wanted. He would wire transfer me money whenever I questioned, you know, why something was taking so long. He was always very responsive.

9:27Reigns was successfully hiding his unethical spending from the board of directors and from families who relied on that funding to care for their disabled loved ones. The Virginia Birth Injury Fund's board of directors is supposed to provide oversight, and it's no small responsibility. These are governor-appointed positions. So how did Reigns manage to slip past them? Speaking with us is another parent who depends on VBIF funding. He also asked to remain anonymous, so we'll call him parent number two. When Raines came on board, he realized, I'm sure that, hey, look, I've got an opportunity here that I can do something.

10:07And what he found out is that by attending board meetings and listening to everybody, they weren't really asking him a lot of questions about where this stuff goes. Like so many who start by testing the edges, Reigns took what he thought he could get away with. And then he took more. The amounts got bigger, the justifications thinner. And eventually, it stopped looking like temptation and started looking like habit. That led him down a path of making some pretty dumb decisions. After the break, Reigns sets himself up on a path with no return. This show is sponsored by BetterHelp. We know society pressures men to be strong, to power through, to carry the load.

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12:59Before the break, we told you about John Hunter Raines and his comfortable life in Richmond, Virginia, as the man in charge of the money at the Virginia Birth Injury Fund. We also told you that Raines had dipped into that money for his own personal use, paying off debt and a mortgage. But one of the ironic wrinkles of this story is that Raines isn't the first person to dip into the fund's accounts for personal use. in 2010 another previous employee of this fund was sentenced to 10 years in federal prison for in a more complex way stealing money she she actually made it even harder on herself to do it she created all these fake corporations and fake llcs and was like you know basically writing checks to these fake llcs for for services they supposedly provided to the fund but it wasn't It was all fake.

13:50She was a claims manager, so she wasn't quite as high up as Raines was on the ladder. And she stole about$750 ,000. That employee, Iris Allen, served seven years in federal prison. You might expect that to leave a lasting impression on anyone who came after her, but Raines wasn't deterred. What started as siphoning money to cover a few debts quickly turned into a full-blown spending spree. And on the surface, his purchases were strange, especially for someone in his financial position. If there was a cliche list of how to blow money that you just stole very quickly, in the most kind of, you know, sort of tacky way possible, this guy did all of them.

14:38is multiple private jet rentals, multiple limo winery tours. And where he lives in New Kent County, there's wineries all over out there. There's also a horse racing track there. And it didn't stop there. There's a$30 ,000 private jet charter to Nashville for three days with friends and family. A private jet charter that he seemed to enjoy so much, he sent an email to the same company later in the year about a potential trip to Las Vegas. It read, Hello, my favorite private flight fam. Could you all send me rates for a jet that could take 10 people plus pilots from Richmond to Vegas sometime in November to February for like three nights?

15:21I'm sending a broad time frame because I'm already wondering which of my kids' college funds I'm going to use. Kidding, I'm already hinting they should figure out a skill that people need and take a business class or two later in life and really make some money with no debt. And of course, to add to the list of cliche purchases, there's a$25 ,000 payment in June of 2023 that court documents describe as a payment to his intimate partner. An intimate partner who was most certainly not his wife. The other thing he spent his money on was a mistress, apparently. That's how it was described as a, I think, either a female companion by the government and then in other documents as a mistress, like a girlfriend on the side, or did he hire, you know, an escort with this money, which would also just be another terrible stereotype.

16:16But it was, you know, in the tens of thousands of dollars paid to this person, apparently. it's like he'd been reading a handbook on embezzlement and frivolous spending but there were even more and in some ways stranger purchases and then the the weirdest one probably of all is the eight golf carts he bought what the government described as eight luxury golf carts and my only guess is that he bought golf carts for him and his friends and he the neighborhood he lives in is is anchored by a golf course. So my guess is it's one of those communities where everyone rides around in golf carts probably.

16:57And I think he probably bought some for him and his neighbors and he was maybe seen as like the, you know, the cool guy in the neighborhood that was buying everybody gifts. And all that money meant to support people with permanent disabilities was apparently used to feed Reigns' own addictions. Where he lived was like ground zero for vices that he was really into. It was booze and gambling all right there. He put it into crypto, which I can only assume was to try to cover his tracks a little bit. He bought literal gold bars like you see on a heist movie and big silver coins. Reigns, the one thing I don't know for sure is when his alcohol and gambling addiction began.

17:43And if he had had this, if he was dealing with that long before this started, that led him down a path of making some pretty dumb decisions. Whether the addiction was genuine or just another excuse, one thing is clear. Reigns gambled. A lot. He dropped over$1 ,300 on lottery tickets. More than$5 ,000 at the Rivers Casino in Portsmouth. Nearly$3 ,000 at Colonial Downs Racetrack. Money meant for families navigating lifelong disabilities. Gone. In total, Reigns spent over$100 ,000 of the fund's money on gambling. Here's parent number one again, a mother who relies on the Virginia Birth Injury Fund to help care for her daughter.

18:32It seems like he started doing it the minute he got into the, you know, got the position. At least when you look at Iris Allen, she tried to be smart about it, but he did not. I mean, he just in your face, stealing money. It seems like he just didn't even care. And I think, you know, to use alcoholism and addiction to gambling, that doesn't fly with me. At some point, those three ignored audits were bound to catch up. With Reigns and with the Virginia Birth Injury Fund, you can't just blow off an audit, let alone three, and expect them to disappear. He got caught. He got arrested. The way the case played out was somewhat unusual where they kind of brought the charges to him, made him aware of the charges before arresting him and before even getting a grand jury indictment.

19:25And then went back and got an indictment. My thing is, is that how did he get away with not doing an audit? Like, what was the reasoning? You know, was that not a red flag to the board? Parent No. 2, who has been dealing with Virginia Birth Injury Fund for decades, claims that the board never asked further questions about avoiding three different audits. The board of directors and the office of the attorney general's representative sat there through every board meeting and never once questioned, where are these reports? The CPA firm apparently was screaming, we can't get the reports because the deputy director is not giving us the material.

20:09We've reached out to the Virginia Birth Injury Fund for a statement, but they haven't given us a response. Why did it go on, like, to steal nearly$7 million in the matter of 21 months and skip three audits? Where was the first red flag? How was he able to do this? When the full extent of Reign's embezzlement came to light, the numbers were staggering. According to federal prosecutors, between January 2022 and October 2023, he siphoned nearly$7 million from the Virginia Birth Injury Fund. And Raines didn't really try to fight charges. Just two months after his arrest by U.S. postal inspectors in August of 2024, he pled guilty to two counts of mail fraud and engaging in monetary transactions involving criminally derived property.

21:05He, you know, he waived his right to a trial and they basically sort of just negotiated as best they could, I guess, behind the scenes on on what the potential sentence would be. I was there in the courtroom for the sentencing and, you know, he was quiet the whole time. In the courtroom, Michael Schwartz witnessed a stark contrast, Reigns admitting to embezzling millions and the family seated behind him, people who depend on that money for essential health care. In the main courtroom, there was half a dozen of these families with the children all in wheelchairs. I would say ranging in age from probably five years old up to, I mean, one of them even looked like he was probably in his early 20s or something like that.

21:50and they are severely disabled, you know, their movements and just, there's lots of quirks that there's no easy way to explain it. And to sit in this otherwise quiet courtroom, because, you know, especially a sentencing hearing, it's very quiet. It's very kind of, there's just a sort of drama in the air at these sentencing hearings. And, and that, what normally would have been kind of dead silence was interrupted nonstop constantly by all the sounds of these these kids were making one of the kids was on a breathing machine and you could just hear the the clicking and sort of the suction sound of the breathing machine you know over everything and that just added to the to the drama and it just made it even worse for for reigns just to know that that's what the money the money that he stole was to go to those people and you could see the parents were just I mean they wanted to lynch this guy you could see it in their eyes

22:52when he went up to address the judge he choked up almost right away but kind of held it together and said what he had to say he at one point so I was sitting on the side of of the the families and the kids. And he, at one point when he was addressing the judge and apologizing for his actions, he turned, he basically was saying, I want to apologize to the fund and the families. And he started to turn to kind of look back at everyone, but it's like he stopped himself. He sort of turned halfway. It's like he couldn't face them. Unlike some white collar cases where defendants try to spin a narrative or fight the charges, Raines didn't even attempt to clear his name.

23:33He knew what he did, and he knew the families knew it too. He pled guilty to embezzlement and money laundering. Under federal sentencing guidelines, that meant four to five years in prison. But Avi Panth, the lead prosecutor, pushed for more. He wanted eight. They basically sort of just negotiated as best they could, I guess, behind the scenes on what the potential sentence would be. And in that case, his lawyers make their arguments for, you know, here's how much we think you should get based on the federal guidelines. So, you know, for federal crimes like this, there's a guideline range of how much this particular type of crime should get in terms of a sentence.

24:14And then there's all these basically ways of factoring up or down to increase the sentence or decrease the sentence. But federal judge John Gibney had his own plans for what he wanted to do with Reigns. After the break, Raines faces his punishment.

24:37When a can'time to sentence John Hunter Raines for embezzling millions from the Virginia Birth Injury Fund, a program that supports disabled children and their families, there were a few options on the table. The federal guidelines called for four to five years. Prosecutors asked for eight. But Judge John Gibney chose neither. He decided those punishments didn't fit the crime. In a somewhat unusual step, the judge, a couple weeks before sentencing, made a filing in the court to say that, essentially based on the egregiousness of his actions, I'm going to most likely sentence him above and beyond the guidelines.

25:18In the end, it's always up to the judge. The guidelines are just that. They're just guidelines. They're not mandates. and the judge can really punish people any way they want. And so he made the indication that this is a pretty egregious case, and I'm going to likely sentence him above and beyond, which he did. Judge Gibney sentenced Raines to nine years in federal prison, and before Raines was placed in federal custody, the judge had a few words for him. According to the Richmond Times-Dispatch, Judge Gibney told Raines,

26:07He was pretty stoic throughout the whole thing. He would sort of bow his head every now and then, depending on what was said. His wife was sitting maybe two rows behind him, and she brought their newborn baby with her. and the baby was in kind of a carriage most of the time. But as he was standing up in front of the judge, listening to the sentence get handed down, he sort of stood tall and took it like a man. He was looking for two and a half years and he got nine, which was a shock. I'm sure that was a shock to the family. The wife was, I mean, it was very dramatic. She was sobbing, holding the baby, rocking back and forth, you know, and his mother was there.

26:54And I mean, he had a lot of supporters there, too. And so that, you know, and they were all on one side. And then the families and the children were all on the other side. So that part was very dramatic. With Reinsnell in federal prison, the Virginia Birth Injury Fund has been forced to reevaluate its financial practices. After being exploited not once, but twice, first by former employee Iris Allen and then by John Hunter Raines, the fund has introduced additional oversight measures for handling claims. The fund, since all this started playing out, has made a lot of changes, apparently. And there's a new person, a new director there now, and she spoke at the sentencing hearing as well.

27:36and basically they've made a lot, apparently made a lot of changes as it relates to oversight of all the money. Because you've had two pretty sizable thefts in 15 years. They've made it more of a process for claims to be filed by these families. But some of the claimants say that those changes have actually made things more difficult for them, as opposed to making the process better for everyone involved. there was a father who stood up at the sentencing hearing and said hey you know judge yeah the prosecution and the fund are claiming that we're not victims that the families and the children are not victims but in the end we are being victimized because it is now significantly more difficult to get money from the fund when you make a claim so you have to just there's provide a lot more documentation more justification for the claims whereas Apparently, at least according to this data, it used to be he could call up to the fund and ask and get either Reigns or the longtime executive director on the phone and say, hey, I need money to fix my my the ramp on my handicapped accessible van.

28:45And they say, OK, no problem. We'll process it for you. It was it was that kind of friendly and easy of a process for these families. Here's parent number one, one of the claimants. For me, it's made life harder because of all the hoops that we have to jump through. You know, I shouldn't have to justify that my daughter needs incontinent supplies. I shouldn't have to justify, you know, accessible equipment. It delays the care that I provide for her, reimbursements for caregiving. you know, some of us, this is our full-time job. We depend on them to pay us in a timely manner. That doesn't happen.

29:30At this point, it should be like a well-oiled machine. We shouldn't have to also be punished for employees stealing our kids' money. The communication with the program is very difficult. You know, I got a full-time job. I feel like I've got two full-time jobs because I'm having to reach out to them every single day. And to me, after being in the program for 25 years, it is exhausting. And here's parent number two. It's had a horrible effect. Some families have gone. I know there's one family who filed bankruptcy because of this, because they have not been reimbursed for their expenses. I even hired an attorney to say, listen, can we just ask that they give me a number, you know, how much money do you think that needs for the rest of her life?