A Loudoun County man who admitted stealing nearly $8 million in lawsuit settlements for victims of medical malpractice has been sentenced to nearly six years in prison and ordered to pay more than $9 million in restitution.

Joseph E. Gargan, 60, of Round Hill, Va., who was sentenced Wednesday in federal court in Alexandria, was the chief executive of the Pension Co., an Arlington-based firm hired by the federal government to handle financial settlements in civil lawsuits, often by buying annuities for the plaintiffs. In multiple cases from 2015 to 2019, Gargan embezzled $7.9 million, according to court records, from funds intended to compensate 13 people, including seven children. In one case, Gargan admitted taking $4 million intended for an annuity to be bought for a child, court records state.

The government stated that Gargan used the money to finance a “lavish lifestyle,” but Gargan said he lived in a small rented house and used the money to cover other business expenses.

Once the embezzlement was discovered, the government was obligated to purchase the annuities itself, which it said cost $9.1 million. The intended individual recipients were not harmed, Gargan’s lawyers said. Gargan said in a letter to U.S. District Judge Rossie D. Alston that an employee of his company initially failed to buy an annuity at the proper time, causing it to cost more, and that Gargan then used funds from other settlements to cover the losses. Gargan said his ownership of other companies such as InstantLabs, a testing company which he sold in 2018, CourtroomConnect, which enables remote legal proceedings, and the Pension Co. will enable him to pay the $9.1 million restitution.

Gargan is a member of the Kennedy family. His grandmother was the sister of Rose Kennedy, his father was a cousin and close friend of Edward and Robert Kennedy, and Gargan is a nephew of Ethel Kennedy and cousin of Edward Kennedy Jr., who both wrote letters of support to Alston. Settlement lawyer Kenneth Feinberg also wrote a letter to Alston saying Gargan had helped him in numerous class settlements, including the Sept. 11, 2001, terrorist attacks and meeting with families of the recent Boeing Max 737 crashes.

Alston sentenced Gargan to 70 months in prison, the low end of the federal sentencing guidelines, and allowed him to surrender in January.

Gregory L. Murphy, Gargan’s lawyer, said that, “From the start of the publicity of this prosecution it has been unfairly implied that these monies were taken from certain victims, some of whom were children. That is not the case as the victims protected by the trusts holding the government’s annuities were never in jeopardy of losing their benefits because, in the main, the government stood by to make those annuities good. That is why the plea, to which Joe admitted as his wrongdoing, correctly references only the government, and one hospital, as the victim and not anyone else.”

This story has been updated with a comment from Gargan’s lawyer and to indicate that Gargan sold InstantLabs in 2018.