Doctoring the books

A former dental office employee I recently met, after hearing that I’m a CFE, immediately began to fill me in about an embezzlement his former workplace suffered. I smiled wryly as the narrative unfolded. This wasn’t the first time a member of the medical industry shared this kind of story with me. Indeed, this reaction is almost de rigueur.

Medical establishments are uniquely vulnerable to fraud their employees perpetrate. Doctors, dentists and their ilk generally prefer to focus on caring for their patients rather than attending to dry, business-related tasks necessary to operate functioning practices.

Physicians in smaller practices, especially, are likely to trust just one or two individuals to handle every financial aspect of the business — including receipts, invoices and bookkeeping. Medical practices are ripe for exploitation.

Through my work investigating medical employee fraud and speaking to victims, I’ve noticed emerging patterns. These case studies, which I’ve collected through my work experiences, exhibit some common red flags of fraud-susceptible medical practices. I’ve changed names and places.

Ignorance of financial operations

In 2004, Benjamin Perlman, a Boston-based dentist, interviewed a young woman, Tina, to fill the business manager position at his practice. Tina was smart, confident and knowledgeable. He hired her on the spot.