Stealing Cash with a SmileThe Affable Courier Who Pocketed $250,000
By Kenneth C. Citarella, J.D., CFE, and Mindy Eisenberg-Stark, CFE, CPA
July/August 2010
Fraudsters pay close attention to how systems work in a business. That’s how they find their opportunities to steal. The story of how a successful medical practice lost at least $250,000 in an employee embezzlement scheme illustrates that when internal controls fail, the devil might indeed be lurking in the details.
Here are the details of a classic “from the deposit” cash theft scheme from the Occupational Fraud and Abuse Classification System – the ACFE’s “Fraud Tree.” (See the 2010 “Report to the Nations.”)
Westchester Medical Associates (WMA) was a nine-physician, five-office medical practice in Westchester County, N.Y. Its offices, which provided a wide array of services, were managed from an executive office at a separate location. The practice worked hard to apply good internal controls consistently in each office. All personnel clearly understood WMA’s straightforward money-handling procedures. (All the names of businesses and individuals are fictitious to protect the privacy of the victimized practice.)