Case #8: Past History – Predictor of Future Behavior

The Conviction:
The United States Attorney’s Office announced that the defendant, let us call her “Kathy”, pled guilty in federal court in February 2010 to unlawfully obtaining employment at a health care provider after her exclusion as a result of a previous health care fraud conviction. “Kathy” also pled guilty to bank fraud and embezzlement in connection with health care. The maximum penalty for her felony offenses is imprisonment for 30 years and a fine of $1,000,000.

The Alleged Scheme:
U.S. Attorney’s Office presented as evidence in the case that “Kathy” misapplied money and other assets of a health care benefit program, used the doctor’s inkpad signature stamp to endorse diverted checks, and deposited those checks into her own bank account. It is also alleged that she evaded detection by making false data entries in the doctor’s billing computer, where she recorded transactions as “non-allowed services” to conceal her embezzlement scheme.

“Kathy” was employed as a bookkeeper and medical billing specialist in the victimized doctor’s office from May 26, 1998 to December 31, 2008, according to court records.

The Scheme’s Downfall:
The particulars relating to the discovery of this fraud were not announced, however, the United States Attorney praised the investigation conducted by the Office of the Inspector General for the U.S. Department of Health and Human Services and the Office of the Maine Attorney General.

While information released from the U.S. Attorney’s Office does not designate an amount of money stolen, a civil lawsuit accused the defendant of defrauding the doctor $59,260.

Lessons Learned:

How about your operation? Are you protected… REALLY protected against an internal fraudster from crippling or even destroying your business?

Be informed – learn from the experiences of others. Get involved – and YOU will be prepared.

Read more in Business Fraud: From Trust To Betrayal