CFEs can be medical practices' best friends

Jeffrey Slotten, DDS, a dentist in Palatka, Florida, thoroughly trusted his office manager of seven years, Theresa A. Frank. Most doctors totally rely on their office managers and are convinced that their practices would collapse without them. Slotten was no exception. Frank managed the employees, payroll and the patient billing software, and created the daily bank deposit slips. Slotten thought his practice had good internal controls and separation of duties because he personally delivered the deposits to the bank and maintained the dental-office operating account. Also, his accountant reviewed the collections reports every quarter. What Slotten didn’t know was that Frank had been manipulating the patient collection data to produce the collection reports that the accountant was reviewing. The numbers weren’t real.

After Slotten and his staff caught Frank, he called his CPA office. I work for the same CPA, who asked me to investigate. I soon discovered she’d stolen more than $260,000 from collections over seven years and via other frauds.

Here’s how Frank committed the frauds. She’d stay late or come into the office after hours when she’d alter and manipulate the patient billing accounts, and pay herself overtime. She’d prepare the daily deposit but then she’d skim cash from it. Frank also secretly applied for and obtained a credit card in Slotten’s name, which she used to illegally purchase items. She’d collect the mail, so she was able to intercept the credit card bills.