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    Warning signs to look for to avoid practice embezzlement

    Lisa Sundquist still remembers the moment she decided to steal money from her practice. A check for $8,000 had arrived in the mail from an insurance provider—a settlement for an old claim that had already been written off and was never entered into their new practice management system.

     

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    “I remember thinking, ‘This money is not going to be missed by anyone,’” recalls Sundquist, who was administrator of a six-physician surgical practice in Portland, Oregon. 

    She was right, and soon learned just how easy it was to steal from the practice. With responsibility over all receivables and payables in QuickBooks and a thick stack of signed, blank checks provided by the physician owners to pay bills, Sundquist had the unfettered ability to cook the books and line her pockets. 

    Every few days she’d write a check out to herself and enter a valid vendor into the system to mask the spend. A $500 check here and a $3,000 check there quickly added up. By the time she resigned 18 months later, Sundquist had embezzled $257,000.  

    Assisting her, unwittingly, was an accountant who had been with the practice for 36 years. 

    “He got complacent,” says Sundquist. “If everything matched up, he would just sign off on the monthly reports and bank statements.” Like many practices, there were no safeguards built into the administrative workflow, so no one was looking over Sundquist’s shoulder. 

    Embezzlement at practices is common

    Theft and embezzlement is widespread, and it occurs more often in healthcare than in most other industries, amounting to $25 billion in annual losses for medical practices, according to the Association of Certified Fraud Examiners. 

     

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    A 2009 survey by the Medical Group Management Association found that an astounding 83% of practice administrators have been associated with a practice where there was employee theft or embezzlement. 

    “It’s happening every single day. People just aren’t catching it and aren’t taking the time to look for it,” says Reed Tinsley, CPA, a Houston-based accountant who specializes in working with physicians and medical practices.

    Embezzlement can remain undetected for years—or longer. A practice administrator arrested in August 2016 was accused of embezzling more than $890,000 over 11 years from a North Carolina-based OB/GYN practice. 

    Next: Embezzlement red flags

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    • Anonymous
      Our "little thief " was also commiting insurance fraud. It was a call from her car

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