Family members working at private medical practices are not an unusual case, but physicians need to be as diligent in keeping an eye on their kin as they are with other employees. Here’s a case in point.
A-51-year-old woman in Aspen Colo., pled guilty to theft after serving nine years as the office manager and bookkeeper of a medical private practice. From July 2015 to December 2016, the 51-year- old stole $663,000; the woman was only prosecuted for the crimes she committed during this period. However, she confessed to police that she'd been taking money from her sister’s private practice since 2010.
The money mishandling was first discovered by a business co-owner and verified by an outside accounting firm. The woman also admitted spending the money on plastic surgery, groceries, airline flights, shopping at Neiman Marcus, and on jewelry at Tiffany’s.
The office's financials were tracked by QuickBooks accounting software which allowed the woman to hide the money coming out the practice’s bank account as office supplies; these activities continued without anyone noticing because the business owners only saw the QuickBooks reports. The woman was the only person who was responsible for bookkeeping.
What is embezzlement?
According to the 2011 Marquet Report on Embezzlement, physician practices suffer from some of the highest money mishandling amongst service industries; this is more so true for smaller and busier operations. In fact, three in out of four providers will suffer embezzlement in their professional career.
Under common law, per Black’s Law Dictionary, embezzlement is defined as the fraudulent appropriation to his own use or benefit of property or money entrusted to him by another, by a clerk, agent, trustee, public officer or other person acting in a fiduciary character.
How does embezzlement occur in medicine?
Employee embezzlement can result from employees:
• creating fake companies;
• stealing petty cash;
• handling payroll and giving themselves bonuses;
• giving themselves raises;
• overstating hours worked;
• having access to credit cards and using it for personal expenses; and
• writing checks on your behalf.
What’s the profile of an employee who steals?
• Female 64 percent, according to the Marquet Report
• In healthcare, 66 percent of employees who embezzle are office managers, according to a 2016 Hiscox study