Instances of fraud are highly prevalent in the healthcare industry. Most physicians believe that it won’t happen to them or by anyone on their practice’s trusted staff. The following case study shows that fraud can be perpetrated by even the least likely of culprits.
Decosimo was engaged by an urgent care center’s legal counsel to investigate missing deposits after a fellow employee noticed the center’s trusted, long-time accountant one day making a payment for a personal UPS delivery from the previous day’s cash collections that had been placed in the center’s safe. A subsequent review by the center’s manager indicated differences between expected deposits, based upon encounter forms, and actual deposits.
About the Practice
The practice was one of several physician-owned urgent care facilities which had been in practice in North Carolina for many years. The centers also provided occupational medicine and physical therapy.
During our discussion with the center’s attorney and physician owners, it was decided that an investigation was warranted. The investigation would not only determine the amount of losses, but the report would be used as a basis to file a complaint with law enforcement, seek restitution and file a claim with the center’s insurance carrier. Another objective was to help identify and recover any remaining assets.
Our forensic investigation provided the center with sufficient evidence to pursue legal action against the perpetrator. In addition, our investigation determined how the fraud was perpetrated by exploiting significant weaknesses in the center’s system of internal controls. We also identified other weaknesses and suggested proactive procedures which will strengthen its internal controls help protect the center from fraudulent activity in the future.
Decosimo’s forensic accounting team began by obtaining an understanding of the current system of internal control. We identified weaknesses which allowed the suspect the opportunity to commit and conceal the misappropriation of funds. The suspect was responsible for making daily deposits of the previous days’ collections which were prepared and placed in the center’s safe by front-office staff. The suspect was also able to make adjustments to various transactions and, with the lack of proper reconciliation and supervisory review, had the opportunity to commit and conceal the misappropriation. Our forensic accounting team reconciled all encounter forms over the two previous years with deposit information received directly from the bank. In addition, we obtained the suspect’s banking records and credit information which revealed that several checks from patients had been deposited into the suspect’s personal bank account. We were also able to identify personal purchases made on the center’s credit card and paid by the center. Based upon our analysis of the suspect’s expenditures and sources of income, we concluded her compensation from the center could not support her current lifestyle.
Our forensic investigators prepared a clear and concise report for the center’s attorney, law enforcement officials and insurance adjustors presenting evidence of missing deposits and unauthorized personal purchases totaling approximately $185,000 over a period of twenty-four months.
We Can Help
If you suspect fraud, cash flow is not what you expect or want to help insure your assets are protected from misuse or misappropriation, contact Decosimo's forensic team of certified fraud examiners and ask us how we can help.