‘Jet-setting’ local CFO who stole millions from Virginia Birth Injury Fund to be sentenced today

The fund keeps its headquarters at 7501 Boulder View Drive on the Southside. (BizSense file photos)

Editor’s Note: Click here to read the update on this legal case

The former CFO of the Richmond-based Virginia Birth Injury Fund, which compensates disabled children and their families for neurological injuries at birth, is set to be sentenced today for stealing nearly $7 million from the program.

John Hunter Raines faces potentially years in federal prison for an embezzlement scheme that funded what prosecutors describe as an “extravagant, private-jet-setting lifestyle.”

The 39-year-old New Kent County resident was arrested by U.S. Postal Service inspectors last August and pleaded guilty to two counts of mail fraud and engaging in monetary transactions in criminally derived property.

He was initially accused of stealing $4.8 million but later admitted to a total of $6.75 million. He admitted to using the money to fund an alcohol and gambling addiction, as well as limo rides, private jet trips and payments to a mistress.

Raines worked as CFO of VBIF, formally known as Virginia Birth-Related Neurological Injury Compensation Program, from 2020 until his termination in 2023.

The $700 million fund is paid for by physicians, hospitals and insurance carriers to provide care for children who become disabled after suffering brain or spinal cord injuries during the birthing process.

The program, according to court records, has roughly 300 active claimants who rely on the fund for therapies, caregiver services, medical bills, medications, counseling and equipment such as wheelchair accessible vans.

“It was against this backdrop that Raines brazenly stole millions of dollars of funds for his own selfish greed,” prosecutors state in court records. “Raines’ actions in this case constitute a monumental betrayal of public trust. Most importantly, Raines betrayed the children who rely on the Birth-Injury Program for survival.”

Prosecutors are asking for Raines to receive a 96-month prison term, while Raines and his attorney have asked for 24 months in prison plus three years of supervised release.

He’ll stand today before U.S. District Court Judge John Gibney, who has indicated in court records that he won’t be showing leniency when handing down the sentence this afternoon.

The U.S. Attorney’s Office included in court records a lengthy, detailed list of how Raines spent the stolen money. His spending included: $160,000 to buy eight luxury golf carts; $29,000 paid to an “intimate partner”; $125,000 to rent private jets for him and his wife and friends; $15,000 toward his mortgage; $30,000 to pay off a vehicle loan; more than $60,000 in student loan debt; more than $100,000 on gambling; nearly $10,000 on limo rides; and nearly $20,000 on gold bullion coins and a silver bar.

Prosecutors claim he tried to cover his tracks by impeding the required independent audit of the VBIF’s program’s finances.

Raines will be sentenced today in the federal courthouse in Richmond.

Raines’ attorney, in requesting a more lenient sentence, noted his prior lack of a criminal record and his cooperation with law enforcement that included his voluntary surrender and entering a plea within two months of his initial court appearance.

His attorney said Raines’ crimes were driven by “insatiable alcoholism and gambling.” He notes Raines’ compliance with the court’s request that he complete 90 Alcoholics Anonymous meetings in 90 days, a number he has exceeded.

Raines also enrolled in the Virginia Lottery’s exclusion program, which prevents him from gambling in the commonwealth by distributing his name to all casinos in the state, permitted sports betting sites and the Virginia Racing Commission.

The leniency request also points to the fact that Raines is married with three young children, including an infant daughter who was born in January.

“Since his termination from the Virginia Birth Injury Fund, Raines has rededicated himself as a father. Raines focuses his time selling what items he can to pay restitution prior to sentencing and volunteering at his church,” his lawyer wrote in court records. “He knows that the best way to set an example for his children is to take responsibility for his acts and fully commit himself to a lifetime of alcohol and gambling sobriety.”

Raines expects to make a $162,000 restitution payment prior to his sentencing.

The U.S. attorney said that while Raines should be commended for his commitment to his addiction rehab, a harsher sentence is necessary.

“These efforts are scant mitigation for a crime driven by Raines’ greed. Raines is not the only individual to suffer from gambling addiction and substance abuse disorders,” the prosecution wrote in court filings. “These traumas do not explain Raines’ deliberate choices made repeatedly over at least 21 months to embezzle millions of dollars meant to care for society’s most vulnerable.”

Prosecutors also note that two of Raines’ own children have developmental disabilities.

“Raines’ own experiences raising children with health challenges should have given him empathy for the plight of sick and injured children. 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,” the USAO states.

In arguing for a higher sentence as a deterrent, prosecutors reminded the court that this is not the first time the VBIF was a target of a “crooked insider.”

Former claims manager Iris F. Allen was sentenced in 2010 to 10 years in prison for stealing $744,000 from the program.

Court records in Raines’ case mention a victim impact statement submitted by the VBIF, though that document is sealed.

Records also include letters of support for Raines from his wife, mother, mother-in-law, and a longtime friend, all of which describe his crimes as out of character for an otherwise devoted father, supportive husband and community member – “a good man who made a terrible mistake.”

Raines’ attorney, William Mann of Northern Virginia law firm Simms Showers, reiterated these points in a prepared statement emailed to BizSense last week.

“Mr. Raines recovery from his alcohol and gambling addictions started with his acknowledgement of his crime. He knows he must be held accountable and continue his progress through daily AA meetings and counseling,” Mann said. “He has a young family relying on him and he has already started the process of paying restitution in this case. He has cooperated with the Birth Injury Fund and accepts full responsibility for what happened. Furthermore, he’s done everything the court has asked of him and will continue to do so. His family’s support gives him hope that he can be successful in the future and pay back what he owes.”

It doesn’t appear as though Judge Gibney was initially swayed by the letters, as days later he filed notice in the case that he’s considering an harsher sentence beyond the suggested federal guidelines.

“The Court believes that the nature and circumstances of the offense and the history and characteristics of the defendant… may warrant an upward variance in this case,” Gibney wrote.

Raines’ sentencing is set for 1:30 p.m. today.