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By Sharon Hamrick, CPA•CFF, CFE
Overview
Decosimo was engaged by a physician to investigate a potential embezzlement when the practice began to suffer significant cash flow problems and unidentified electronic payments were detected from the practice's checking account.
About the Practice
Located in a metropolitan area in East Tennessee, the practice consisted of a sole practitioner who had been in practice in the community for many years.
Client Objectives
After discussing the matter with the professionals at Decosimo, the physician and his attorney determined that investigation by the forensic accountants at Decosimo was warranted to find the source of the practice’s loss.
Maximizing Value
Our forensic investigation provided the physician with a trail to the perpetrator of the unidentified electronic payments, as well as the evidence to pursue further legal action against the perpetrator. Our investigation also led to the recognition of several significant weaknesses in the internal control system of the physician's practice, providing him the opportunity to strengthen its internal controls to better protect his practice from fraudulent activity in the future.
Disciplined Process
Decosimo’s forensic accounting team began by obtaining an understanding of the accounting procedures employed at the doctor's office and the responsibilities of the various individuals involved in the accounting system. Our team then obtained, directly from the bank, records for the practice's checking account for the period in question. From that information we identified the unauthorized electronic payments, determined that they were payments on bank credit cards and were able to determine the cardholder's identity - the physician's estranged wife.
Proven Results
Our forensic investigators were able to prepare a clear and succinct report for the physician, his attorney and law enforcement officials tracing the unauthorized electronic withdrawals from the practice's checking account to credit cards in the name, or variations on the name, of the physician's estranged wife totaling over $100,000 over approximately eleven months.
We Can Help
If you suspect fraud or wish to have a fraud risk assessment for your practice, contact a member of Decosimo's forensic services team and ask us how we can help.
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