Michigan dental clerk arrested for embezzlement

 

stephanie-wilkinson-jpg

 

See video here — http://wwmt.com/news/local/branch-co-receptionist-pleads-no-contest-to-embezzlement-charge

COLDWATER — Coldwater Police arrested a former employee of Smile Avenue Family and Cosmetic Dentistry for embezzlement after an investigation started with customer complaints.

Stephanie Wilkinson, 42, of Coldwater township, was charged with one count of embezzlement, a five-year felony, and making false entries into medical records, a four-year offense.

According to the probable cause affidavit, customers complained to the practice they were being billed for services for which they had already paid. The customers had receipts for cash payments made in both 2014 through this year. An audit found over 200, with a total allegedly taken of $1,764.

Entries had been made into the patient records that did not reflect the payments. Wilkinson denied to police she had taken the money.

Wilkinson was arrested on a warrant with a $25,000 bond. Preliminary proceedings were set before the end of the month.

Do you have questions about embezzlement?  Give Prosperident a call at 888-398-2327 or send an email to requests@dentalembezzlement.com

This lady has records in both Florida and Georgia

rochelle-lee-pridgen

Do you have questions about embezzlement?  Give Prosperident a call at 888-398-2327 or send an email to requests@dentalembezzlement.com

 

Rochelle Lee Pridgen

CountyHillsborough, FL
Booking Number1001409
Last NamePRIDGEN
First NameROCHELLE
Middle NameLEE
Eye ColorBRO
Hair ColorBRO
BuildMED
Current Age40
Height5’03
Weight184
SOID Number00471137
SOID NamePRIDGEN,ROCHELLE LEE
RaceW
SexF
EthnicityN
Birth PlaceGA
Birth Date1972-10-02
Arrest Age28
Address CityBRANDON
Address StateFL
Address Zip33511
Arresting AgencyHCSO
Arrest Date2001-01-09 09:00:00
Booking Date2001-01-09 09:44:00
Arrest Location919 MEIZNER REAL AV
Arrest JurisdictionHC
OBTS12736128
StatusRELEASED
purge0.00000
Release TypeCASH BOND
Release Date2001-01-10 21:40:00
Release RemarkM PRIDGEN

Charges

Charge # Desc Class Court Disp Bond BP Fine Custody Days Count Type Report # CT Case # Date Agency OBTS Code CRA # Remark
1 FRAUDULENT USE OF CREDIT CARD OVER $100 F3 31O PENDING 500.00 B 1 1 WARRANT 00092385 0020634CF 2001-01-09 HCSO 12736128 FRAU3000 326718
2 FRAUDULENT USE OF CREDIT CARD OVER $100 F3 31O RECOGNIZANCE NBR B 1 1 WARRANT 00092385 0020634CF 2001-01-09 HCSO 12736128 FRAU3000 326718
3 FRAUDULENT USE OF CREDIT CARD OVER $100 F3 31O RECOGNIZANCE NBR B 1 1 WARRANT 00092385 0020634CF 2001-01-09 HCSO 12736128 FRAU3000 326718
4 FRAUDULENT USE OF CREDIT CARD OVER $100 F3 31O RECOGNIZANCE NBR B 1 1 WARRANT 00092385 0020634CF 2001-01-09 HCSO 12736128 FRAU3000 326718
5 FRAUDULENT USE OF CREDIT CARD OVER $100 F3 31O RECOGNIZANCE NBR B 1 1 WARRANT 00092385 0020634CF 2001-01-09 HCSO 12736128 FRAU3000 326718
6 GRAND THEFT THIRD DEGREE ($300 – $20,000) F3 31O PENDING 500.00 B 1 1 WARRANT 00092385 0020634CF 2001-01-09 HCSO 12736128 THEF2000 326718
7 GRAND THEFT THIRD DEGREE ($300 – $20,000) F3 31O RECOGNIZANCE NBR B 1 1 WARRANT 00092385 0020634CF 2001-01-09 HCSO 12736128 THEF2000 326718
8 GRAND THEFT THIRD DEGREE ($300 – $20,000) F3 31O RECOGNIZANCE NBR B 1 1 WARRANT 00092385 0020634CF 2001-01-09 HCSO 12736128 THEF2000 326718
9 GRAND THEFT THIRD DEGREE ($300 – $20,000) F3 31O RECOGNIZANCE NBR B 1 1 WARRANT 00092385 0020634CF 2001-01-09 HCSO 12736128 THEF2000 326718
10 GRAND THEFT THIRD DEGREE ($300 – $20,000) F3 31O RECOGNIZANCE NBR B 1 1 WARRANT 00092385 0020634CF 2001-01-09 HCSO 12736128 THEF2000 326718

Aliases

Name Birth Date SSN
DENTON,ROCHELL 1972-10-02
PRIDGEN,ROCHELLE LEE 1972-10-02

Drugs, Burglary and Embezzlement in California

Do you have questions about embezzlement?  Give Prosperident a call at 888-398-2327 or send an email to requests@dentalembezzlement.com

 

fonda-rae-underwood-mugshot-37072520-400x800

 

Suspect First Name

FONDA
Suspect Last Name

UNDERWOOD
Suspect Middle Name

RAE
Aliases

Date of Birth

Arrest Date

12-12-2013 10:40:00
Age

Sex

Female
Race

Black
Ethnicity

Height

5’10”
Weight

220lbs
Hair

Black
Eye

Brown
Place of Birth

California
Address

State

California
Total Bond

150000
Booking Date

12/12/2013 16:14
Location

Summary

Lake County Law Enforcement arrested Fonda Rae Underwood on December 12, 2013. The charge against Underwood is POSS CONTRL SUBS PARAPH, POSS CONTROLLED SUBSTANCE, BURGLARY:FIRST DEGREE, EMBEZZLEMENT [OVER $950], a M. She weighs 220lbs with black hair and brown eyes;

Baltimore Dental Office Manager Sentenced for Felony Theft

A Fort Washington woman was sentenced to five years of probation and to pay almost $3,000 for stealing money from a medical insurance company by using her employment at a dentist’s office to submit false claims, prosecutors said.

Randii Lei Adams, 43, pleaded guilty and was sentenced to one count of felony theft Thursday for falsifying insurance claims to Ameritas Life Insurance Corporation worth a total of $5,810, according to information from the Maryland Attorney General.

From February 2005 until June 2006, Adams worked as an office manager at Health Professionals Inc. in Fort Washington. While employed at the dental practice, Adams filed false insurance claims using names of her family members and then had them cash the checks they received and pay her a portion of the money from the check, prosecutors said.

Adams was ordered to pay $1,800 in restitution and a $1,105 fine.

Her attorney, Brian Bregman, said Adams had already paid some of the money back prior to her sentencing, which is why she was not required to pay back the entire amount.

“She took responsibility and is going to make restitution and try to make things right,” Bregman said.

Bregman added there was another person of interest in the case but could not provide further details.

The Attorney General’s office did not respond to questions about whether the family members who received money from Adams also are facing charges.

Randii had several prior convictions dating back to 1998.

Do you have questions about embezzlement?  Give Prosperident a call at 888-398-2327 or send an email to requests@dentalembezzlement.com

Content retrieved from: http://www.gazette.net/stories/02192010/prinnew130708_32588.php

Embezzlement News #50 — October 2016

Prosperident’s Dental Embezzlement News
Issue #50 — October 2016
In This Issue:
  • Ten things you might not know
  • Upcoming Speaking Dates
  • A note from our CEO
Oct 13 Sunset Study Club, Portland OR
Oct 15 Pacific Coast Society of Orthodontists, Palm Springs CA
Oct 21 Argyle Group, Ottawa ON
Oct 22 Alberta Society of Dental Specialists, Edmonton, AB
Oct 28 Spectrum Day, Toronto ON
Nov 4 New Castle Dental Study Club, Wilmington DE
Nov 4 PEAK Education, Novi MI
Nov 10 Carestream Global Oral Health Summit, Las Vegas NV
Nov 16 Harbor Dental Society, Lakeside CA
Dec 5 Queens County Dental Society, Jamaica NY
2017
Jan 11 ITI Study Club, Delray Beach FL
Jan 19 St Helens Shadow Study Club, Vancouver WA
Jan 26 topsOrtho topsFest, Newport Beach CA
Jan 28 Manitoba Dental Association, Winnipeg MB
Feb 3 Newport Harbor Academy of Dentistry, Newport Beach CA
Feb 23 Ortho2 UGM Anaheim CA
Feb 24 Chicago Midwinter Meeting, Chicago IL
Mar 3 Dolphin Management User Meeting, Nashville TN
Mar 9 Greater Philadelphia Valley Forge Dental Society, Philadelphia PA
Mar 10 Pacific Dental Conference, Vancouver BC
Mar 17 Dr. Michelle Haddad Memorial Scholarship Lecture New Hartford, NY)
Mar 21
Greater Woonsocket District Dental Society, Providence RI
April 7 UCSF Alumni, San Francisco CA
Apr 28 Keely Dental Society, Hamilton OH
May 4 Texas Dental Meeting, San Antonio TX
Our most-requested presentation is called “How To Steal From A Dentist”.
To book us for your meeting or study club, click here or call us at 888-398-2327.
Probability of you being embezzled in your career -60%
 
Probability that you will regret deleting this newsletter if that happens -100%
Did you miss a previous newsletter? We archive themhere.
Ten Things You Might Not Know About Prosperident
Sometimes we make the mistake of assuming that everyone knows who we are and what we do.  Here are some things you might not know.
1.  The company was founded in 1989, by David Harris.
2.  David got drawn into the dental embezzlement world by accident.  Once he found himself there, his investigative skills and amazing ability to think like a criminal quickly established him as the “top gun” of embezzlement investigation for dentists.
3.  Prosperident only assists dentists.  We do not investigate in other businesses, nor do we work for dental insurance companies, the IRS etc.
4.  We work with all dental specialties and have specialized groups to deal with embezzlement in oral surgery and orthodontic practices.  Our Special Investigations” group deals with some of our more unusual cases.
5.  Our dozen investigators all had extensive dental backgrounds before they started training to be Prosperident fraud examiners.  Half have completed their Certified Fraud Examiner (CFE) designation, which is the “gold standard” of fraud examination.
6.  Our examinations are completely stealthy — no one but you will know that we are involved.  Also, normally our investigations are done remotely and without a (probably conspicuous) visit to your office.
7.  We do a lot of speaking, and five members of our team are accomplished speakers.  In a typical year, we do 60 or more speaking engagements — everything from big meetings like the Hinman and Chicago Midwinter to local study clubs.
8.  We offer three products — Diagnostic Examination(for when a dentist wants to know if he or she is being embezzled), Forensic Investigation (for when embezzlement has been confirmed) and Office Protection System, which is a preventative product designed to minimize the probability and impact of future embezzlement.
9.  The most popular section of our website is the Hall of Shame, where we profile over 350 embezzlers.  It’s a great place to look before hiring someone — check it outhere.
10.  Our boss, David Harris, is pretty camera-shy.  He has only allowed himself to be recorded while presenting once.  You can see it here.
I have embezzled over $30,000. What should I do?
There is a website called www.justanswer.com, where people can ask questions of subject area experts. One question that was asked came from someone who said that she had embezzled $30,000 from the dentist for whom she worked, and she was asking an attorney what to do.
It’s an interesting exchange, particularly where she reveals her reasons for embezzling, and that when she had confessed to her doctor, she admitted to stealing just 3% of what she actually took.
You can read the exchange here.
A Note From Our CEO
Something I often get asked is whether more embezzlement takes place when the economy is in trouble.  The answer isn’t a totally simple one, but it does show something interesting about embezzlers, so it is one that I am always happy to address.

An economic downturn puts some people in a financial bind; spouse may lose their jobs, investments devalue and falling housing prices cause homes to be “underwater” or can even make it difficult to obtain mortgage financing.  All of these things exert sufficient financial pressure to cause a small minority of the population to steal.
We refer to this group as “Needy” thieves, and economic conditions certainly increase their numbers.  However, we shouldn’t forget that there is another cohort, which we label as “Greedy”. Unlike the Needy, these people aren’t stealing to survive — they are stealing to purchase luxury items that they feel that they “deserve” but can’t afford on what you pay them.  We’ve watched these people purchase everything from $150,000 automobiles to boats to lavishing expensive gifts on their friends.
Members of this group believe that society (and in particular their employer) underappreciate their talents and value.  Stealing is their way of addressing this perceived inequity and tacitly demonstrating how smart they are.
I’ll mention two things about this group — they seem to be much larger than the Needy — approximately 80% of the embezzlement we find involves Greedy thieves.  Second, the “lifestyle gap” that they perceive widens in a booming economy — they see others “getting ahead” faster than they are, and this motivates them to embezzle.
So, contrary to what you may have thought, we see more embezzlement in a recovering economy than one in downturn, but it involves a different group of embezzlers.
David Harris CPA, CMA, MBA, CFE, CFF
Chief Executive Officer
Prosperident — the world’s largest dental embezzlement investigation firm
Visit our website — www.dentalembezzlement.com

Two dentists practice together, both claim to have been embezzled by the other

MEMORANDUM OF DECISION


ROBERT SOMMA, Bankruptcy Judge

Before the Court is Linda Massod’s complaint seeking a determination that a debt she claims is owed to her by debtor Terry Fayad, arising from their co-ownership and operation of a joint dental practice, is excepted from discharge. Having tried the matter, I now render my decision.

I Introduction

Linda Massod and Terry Fayad, both dentists, formed a romantic relationship in the late 1980s and a professional relationship in the early 1990s. Both relationships failed in the late 1990s, when they separated from each other romantically and professionally. Their breakup was not without recriminations. Those recriminations reverberate to this day and include Massod’s state court lawsuit against Fayad in 1999, Fayad’s bankruptcy case in 2000, and Massod’s exception to discharge complaint in 2001, the subject of this adversary proceeding.

In the adversary proceeding, Massod makes two allegations. First, she alleges that, to induce her to form a joint dental practice, Fayad falsely promised that her dental school loans would be paid from funds generated by that practice and that, relying on that false promise, she was damaged. Second, she alleges that Fayad misappropriated funds from their joint practice for himself and his brother, thereby causing the financial deterioration of the practice and consequent damage to her. Based on these allegations, Massod asks the Court to except from discharge the debt she claims Fayad owes her for the damages caused by his false promises as to her student loans and by his misappropriation of corporate funds. She grounds each request in three separate provisions of the non-dischargeability statute: § 523(a)(2)(A) regarding fraud; § 523(a)(4) regarding fraud or defalcation while acting in a fiduciary capacity; and § 523(a)(6) regarding willful and malicious injury. Fayad denies these allegations.

She also alleges that Fayad made but never intended to honor a later agreement implementing that promise, thereby further damaging her.

I tried these matters on four separate days over a period of several months. At trial, four witnesses testified: Massod, Fayad, their former accountant, and a former joint practice employee (currently employed by Massod). I admitted hundreds of pages of documents including credit card statements and bank statements. The non-party witnesses were generally credible, but the substance of their testimony was peripheral. Massod and Fayad were understandably, perhaps predictably, self-serving in their testimony. Fayad at times was not credible. After trial, I reviewed the trial documents, the testimony, the post-trial submissions, and applicable law. I now set forth my analysis, findings, and rulings.

II Framework

Massod has the burden of going forward and the burden of proof by a preponderance of the evidence as to each of the elements of the separate causes of action in her complaint. Grogan v. Garner, 498 U.S. 279 (1991). See Collier on Bankruptcy ¶ 523.04 (15th ed. rev.).

Under § 523(a)(2)(A), Massod must demonstrate that (1) Fayad made a false representation (2) which he knew at the time was false (3) and which he made with the intent and purpose of deceiving Massod (4) on which Massod justifiably relied and (5) as a result of which reliance and as a consequence of which false representation, Massod sustained a loss or damage. 11 U.S.C. § 523(a)(2)(A); In re Spigel, 260 F.3d 27, 32 (1st Cir. 2001). See Collier on Bankruptcy ¶ 523.08[1] (15th ed. rev.).

Under § 523(a)(4), Massod must demonstrate that (1) a fiduciary relationship existed between Fayad and her, and (2) Fayad committed fraud or defalcation in the course of that fiduciary relationship, (3) causing harm to Massod. 11 U.S.C. § 523(a)(4). In re Baylis, 313 F.3d 9, 17 (1st Cir. 2002). See Collier on Bankruptcy ¶ 523.10 (15th ed. rev.).

Under § 523(a)(6), Massod must demonstrate that (1) Fayad injured her (2) with either the intent to injure her or at least the intent to do an act which he was substantially certain would lead to the injury in question, and (3) the injury was wrongful, without just cause and committed in conscious disregard of his duties. 11 U.S.C. § 523(a)(6). Kawaauhau v. Geiger, 523 U.S. 57 (1991) (as to “willful”); Printy v. Dean Witter Reynolds, Inc., 110 F.3d 853, 859 (1st Cir. 1997) (as to “malicious”); Burke v. Neronha (In re Neronha), 344 B.R. 229, 231-232 (Bankr. D. Mass. 2006) (expanding on objective and subjective elements of malice). See Collier on Bankruptcy ¶ 523.12 (15th ed. rev.).

III Facts

Here are the facts established at trial. In the early 1990s, Massod had a developing dental practice as a solo practitioner, with a patient roster, an office, and an independent business operation. She also had limited financial and business experience and substantial student loans. At that time, Fayad had no independent practice but rather was employed as a dentist by the City of Cambridge, Massachusetts. Fayad occasionally assisted Massod in her practice. He had considerably more business experience and financial expertise than Massod, or so he represented to her. At that time, Massod and Fayad were engaged in an on-going, established romantic and domestic relationship. At some point in that time period, Fayad suggested that they form a joint dental practice, and they did so. They became co-owners of the professional corporation through which that practice was conducted. They agreed upon their respective practice areas and conducted their practice in accordance with that agreement. They also agreed upon their respective corporate titles and roles, with Massod as president and principal marketer and Fayad as treasurer, keeper of the corporate books, and manager of the corporate finances (as well as Massod’s personal finances). They agreed to share equally in the profits of the practice. They also agreed that Massod’s student loans would be repaid through revenues generated by the practice; they did not at first reduce this agreement to a writing. This repayment commitment was a major factor for Massod in her consideration of, and agreement to, the joint practice arrangement, and one upon which she relied. Massod and Fayad provided working capital for the operation of the practice primarily through the use of personal credit cards. In a somewhat atypical and unbusinesslike practice, they employed these credit cards for personal and business expenditures, paying the card billings with corporate funds and directing their accountant at year end as to the allocation of business and personal credit expenditures for income, tax reporting, tax treatment, and financial statement purposes. Fayad instituted and indeed insisted upon this practice, and he did so with Massod’s acquiescence and trust. While their testimony differed on this subject, Massod credibly testified that Fayad maintained sole possession and control over the corporate and practice books and records, and that he resisted Massod’s efforts to review those books and records herself or to engage professionals to review and maintain them. Although she lacked access to these books and records, she nonetheless observed both growth in the practice, which was evident from the increasing patient roster, and, at the same time, signs of financial distress in the business: collection calls, delayed payrolls, balky suppliers, limited income, and unpaid student loans.

Massod testified, without rebuttal, that the student loans were in the approximate amount of $100,000. She contends that, as a consequence of Fayad’s false promises and misappropriations, her loans increased by at least $50,000.

The evidence indicates that they made comparable contributions to the initial capital formation of the corporation.

Fayad’s brother Hidar had financial dealings with Fayad personally and with the corporation. During 1995-1999, the corporation paid substantial sums to Hidar, either directly or through the credit card accounts. Fayad contends that the payments to or on account of Hidar were in repayment of loans or for services rendered. Massod disputes that any loans or services were rendered by Hidar, and she contends that she never authorized any such recompense to Hidar. Hidar did not testify at trial. The documentation is not conclusive. Massod’s testimony on this subject was credible. Fayad’s was not credible. I find that Fayad diverted corporate funds to Hidar without any consideration from Hidar, financial or otherwise.

In July 1997, Fayad and Massod caused the corporation to make an agreement with Massod. The agreement was intended to implement the student loan repayment promise that was a key consideration in Massod’s decision to proceed with the joint practice. Under the agreement, the corporation would re-deploy corporate revenues resulting from the retirement of various corporate office equipment leases toward repayment of Massod’s student loans. The agreement also provided that Massod and Fayad, under certain circumstances relating to the financial performance of the practice, would consider using excess cash flow from the practice for such student loan repayment. These corporate repayment obligations were secured by the grant of a security interest in the corporate equipment. Fayad refused to attend to the paperwork, namely, the issuance of a promissory note and the execution and recordation of the requisite financing statement necessary to render such corporate obligation and collateral commitment perfected and hence meaningful. Moreover, he failed to provide the financial information regarding the performance of the practice upon which the use of excess cash flow for student loan repayment would be based. In any case, Massod’s student loans were not repaid, at least not from corporate revenues in accordance with the Fayad’s promise and the written agreement. Fayad explains his refusal to complete the student loan deal on the breach in their personal relationship, having “caught her cheating.”

In February 1999, three relevant events occurred. First, Massod had occasion to review a corporate bank statement that aroused her concern and confirmed her suspicion that the finances of the practice were not being handled properly or being reported to her accurately.Second, Fayad discovered that Massod was engaged in a relationship with another man, by his testimony causing an immediate breach in his relationship with Massod. And third, Fayad left Massod and promptly established a romantic and domestic relationship with another woman whom he married several months later. Thereafter, Massod and Fayad maintained their joint practice until, commencing in July 2000, Fayad opened his own office, developed a practice, and established a marital residence.

The statement reflected a monthly revenue deposit of approximately $88,000, an amount she considered inconsistent with the distressed finances of the practice and the mounting financial difficulties of the business operation.

During the year and a half following their domestic separation in February 1999, Fayad and Massod practiced together in the same office and under the joint practice banner. By both accounts, the forced professional proximity was awkward and strained. Not surprisingly, they engaged in a series of acrimonious encounters and disputes regarding the practice. These concerned the disposition of corporate assets, the collection and disbursement of corporate receivables, the maintenance of the patient roster, and access to the corporate books and records. As noted, Massod sued Fayad in state court for breach of contract, breach of fiduciary duty, and an accounting. In that action, they executed a stipulation and injunction intended to regulate the joint practice under the eye of a custodian (who is no longer active in that action). Ultimately, burdened by debt, Fayad commenced the underlying bankruptcy case on June 29, 2000. In the bankruptcy case, he listed $238,164 in nonpriority unsecured debts, a substantial portion of which comprised credit card debt to various issuers. The state court litigation, like Fayad’s bankruptcy, awaits the outcome of this adversary proceeding.

IV Rulings

Here are my rulings.

A. Misuse and Misappropriation of Corporate Funds

Each party contends that the other misappropriated practice funds primarily through the use of corporate-funded credit cards for unauthorized personal expenditures. Certainly, their business practice — funding working capital and personal needs through personal credit cards — is particularly susceptible to such misuse. Their strategy at trial as to this matter consisted of presenting what appears to be virtually all of the credit card bills and bank statements for the period in question, together with their respective characterizations of a selection of such charges as instances of the alleged misappropriation, presumably calling upon the Court to render a decision based upon an extrapolation of such charges to encompass a substantially greater sum. While it is Massod’s burden to make that case in this litigation, neither she nor Fayad has done so. Both used the credit cards, and did so both for corporate and personal purposes. Disentangling and examining each and every such charge for a determination of misuse may be possible but that has not been attempted, much less accomplished by either party. To the extent that evidence on this issue was presented, it tended to favor Massod in that she credibly explained the particular charges brought forward by Fayad. Nonetheless, with the exception noted below, Massod has not proved by a preponderance of the evidence Fayad’s misappropriation of the vast sums she claims in her complaint.

B. Defalcation in a Fiduciary Capacity

A discharge exception under § 523(a)(4) based on defalcation while acting in a fiduciary capacity requires a demonstration that Fayad acted in a fiduciary capacity in his dealings with Massod. Fayad and Massod did owe each other duties of good faith and loyalty. However, as co-owners, they enjoyed equal rights and powers with respect to the corporation and the joint practice, even if Massod ceded control of important aspects of her personal and professional life to Fayad, at least for a while. That acquiescence is not enough to warrant the conclusion that either was acting in the requisite fiduciary capacity. See In re Carlson, 334 B.R. 626, 629 (Bankr. C. D. Ill. 2005). Thus, in the absence of such fiduciary capacity, Massod has not established by a preponderance of the evidence one of the elements of her defalcation causes of action. Accordingly, the causes of action relating to the student loans and the misappropriation of corporate funds under § 523(a)(4) fail.

In Massachusetts, shareholders of a closely held corporation are likened to partners and deemed to have the same duty of utmost good faith and loyalty to each other. Donohue v. Rodd Electrotype Co. of New England, Inc., 328 N.E. 2d 505 (1975). Donohue is typically invoked to protect the minority against the majority. See also In re Curran, 157 B.R. 500 (Bankr. D. Mass. 1993); In re Romano, 353 B.R. 738 (Bankr. D. Mass. 2006). Here, Massod and Fayad occupied the same status as co-owners and had equal rights and powers with respect to the management and operation of the practice and its business. For § 523(a)(4) purposes, I find that their relationship was not the fiduciary one contemplated by the statute. See also In re Bologna, 206 B.R. 628, 632 (Bankr. D. Mass. 1997) (“fiduciary capacity” is limited to “the capacity of one who holds property under either an express trust or . . . a technical trust, but not under a trust imposed by law as a remedy, as a constructive trust, an implied trust, or a trust ex maleficio”).

C. Fraud Regarding the Student Loans

Further, Massod has not proved by a preponderance of the evidence that Fayad made a false representation when he agreed, in 1994, to cause her student loans to be repaid from their joint practice. Nor has she established that he did so when he caused the corporation to enter into the collateralized repayment agreement, in 1997. Nothing he said or did at either time establishes that he did not intend to perform the student loan repayment commitment at the time he agreed to do so. He may have broken his promise and breached his agreement subsequently; however, the evidence does not support the conclusion that he engaged in fraud in making either the promise or the agreement. Accordingly, the cause of action relating to the student loans under § 523(a)(2)(A) fails.

D. Fraud Regarding Hidar

Massod contends that Fayad’s liability to her, arising from his diversion of corporate funds to Hidar, is excepted from discharge under § 523(a)(2)(A) as a debt arising from fraud or a false representation because Fayad falsely represented to her that his brother Hidar provided loans and services to the corporation and that the diversion of corporate funds to Hidar constituted the repayment of such loans and recompense for such services. The evidence shows only that Fayad did divert corporate funds to Hidar, and that Fayad, to cover up this diversion, falsely represented to Massod that the payments to Hidar were compensation for value provided by Hidar to the corporation. The evidence fails to establish a requirement of § 523(a)(2)(A): that her reliance on the misrepresentation was a cause of the damage suffered. Here, the damage was caused by the diversion itself. The misrepresentation served to cover-up the wrongfulness of the diversion, but Massod has not demonstrated that it caused the diversion in the first instance. Accordingly, liability arising from the diversions to Hidar is not excepted from discharge under § 523(a)(2)(A).

Fayad’s testimony on this subject was notably inconsistent, evasive, and ultimately lacking in credibility.

E. Willful and Malicious Injury Regarding the Diversion of Corporate Funds

Massod also contends that Fayad’s liability to her, arising from his diversion of corporate funds to Hidar, is excepted from discharge under § 523(a)(6) as a debt for willful and malicious injury to another entity. The injury includes both diminution in the value of her interest in the corporate joint practice and an increase in her own personal liability as a result of the consequent failure of the corporation. Massod has satisfied the requirements of § 523(a)(6) as to these transfers. I find that Fayad made the transfers with at least substantial certainty that they would harm both the corporation and Massod as a one-half owner. He clearly understood as well that every dollar diverted to Hidar diminished the value of the corporation and of Massod’s interest in it. The injury to Massod was therefore “willful” within the meaning of § 523(a)(6) and the Kawaauhau decision. The payments to Hidar were also objectively wrongful in that they were not proper or authorized corporate expenditures, they served no corporate purpose, and they were not sanctioned by any agreement or understanding between himself and Massod. Moreover, Fayad clearly understood the wrongfulness of these diversions. The injury was therefore both objectively wrongful and made with conscious disregard of that wrongfulness, and it was thus “malicious” within the meaning of § 523(a)(6). The Court therefore concludes that Fayad’s liability to Massod for diversion of corporate funds to Hidar is excepted from discharge under § 523(a)(6) as a debt for willful and malicious injury to another entity.

Incident to the collapse of the joint practice, Massod had to pay certain corporate obligations that she and Fayad had guaranteed, including the balance due on a car lease. Massod testified, without rebuttal, that these obligations amounted to at least $40,000. In addition, upon failure of the practice, Massod lost the benefit of payments on her student loans that the corporation was obligated to fund.

F. Willful and Malicious Injury Regarding the Student Loans

Massod also contends that Fayad’s liability to her for failing to implement the student loan agreement — by failing to effectuate the corporation’s obligations (i) to make payments on her student loans and (ii) to give her a promissory note and security interest to secure the corporation’s obligation to her — is excepted from discharge under § 523(a)(6) as a debt for willful and malicious injury to another entity. I find that Massod has carried her burden of proof as to this count.

Fayad’s non-implementation of the student loan agreement injured Massod in two ways. First,by his failure to cause the corporation to make payments on the student loans, she was injured to the extent of payments that the corporation should have made but did not make, plus interest, penalties, and other finance charges that Massod incurred as a result of the nonpayment. Second, in failing to cause the corporation to give Massod a promissory note and security interest, he deprived her of a right to look to assets of the corporation as security for enforcement of the corporate obligation to pay her student loans. Fayad contends that, given the collapse of the joint practice, the security interest would have been subject to avoidance by the corporation’s creditors as a fraudulent conveyance; therefore, he urges, its value would have been negligible and his failure to cause the corporation to give Massod a security interest was not injurious to Massod. This argument, however, goes only to the extent of damages, which is not an issue before me. (Fayad does not contend that it was a factor he considered in his decision not to effectuate the student loan agreement, and I find it was not a factor.) In addition, Fayad has not established that the grant of a security interest would have been a fraudulent as to creditors, especially if he had effectuated it when he should have. There is no evidence that the grant of a security interest would have rendered the corporation insolvent or left it insufficiently capitalized. In any event, whatever the vulnerability of the security interest to avoidance, she had a right to the lien, and he had the obligation to cause the corporation to provide it.

In July 1997, when the lien agreement was made, the practice was in the midst of its highest revenue-producing year (followed by an even higher revenue-producing year in 1998). Thus, there was certainly a basis to view the lien as valuable and not subject to avoidance, thereby establishing, at least to that extent, the injury to Massod in Fayad’s refusal to perfect it.

Fayad testified that he did not implement the student loan agreement because he had caught Massod cheating on him. I find that his non-implementation of the agreement was deliberate, a considered refusal to carry out his obligation as an officer of the corporation, with full knowledge that it would injure her and indeed intent to injure. This was simple retaliation. The wilfulness of the injury is therefore established.

Fayad was also aware of the student loan agreement, of the corporation’s obligations under that agreement, and of his own obligation, as the corporate officer responsible for implementation of the agreement, to effectuate the corporation’s obligations thereunder. I therefore conclude that the injury was wrongful and inflicted in conscious disregard of a known duty: it was “malicious” within the meaning of § 523(a)(6). The Court therefore concludes that Fayad’s liability to Massod for failing to implement the student loan agreement is excepted from discharge under § 523(a)(6) as a debt for willful and malicious injury to another entity.

Fayad’s argument that Massod could just as readily as he, and with the same authority, have issued the requisite promissory note and executed and recorded the necessary financing statement is unpersuasive and irrelevant to the wilfulness and maliciousness of the injury. She was the less experienced and the more trusting of the two, less versed in general business practices, and even less so in the niceties of secured transactions, and he exploited that inexperience and trust. He held the upper hand in the finances of the corporation, and he knowingly used it to her detriment. Moreover, by their own division of labor within the corporation, the obligation to effectuate the student loan agreement was his.

V Conclusion

In accordance with the foregoing findings and rulings, the Court concludes that Fayad’s liability to Massod for diversion of corporate funds to Hidar and for failing to implement the student loan agreement is excepted from discharge as a debt for willful and malicious injury. The Court makes no determination as to the existence or extent of the underlying liability; Massod may establish and enforce the underlying liability in another court of appropriate jurisdiction. All other counts in the complaint must be dismissed. A separate judgment will enter accordingly.


Embezzlement isn’t always about stealing money — sometimes it is information

Colorado woman accused of theft from dentist

Christine A. Cooper, 43, was summonsed into court Thursday on the felony-4 charge of theft of at least $20,000 and less than $100,000 for alleged conduct between July 2014 and January 2016.

A Montrose woman is accused of stealing thousands of dollars from a local dental practice over the course of more than a year.

Christine A. Cooper, 43, was summonsed into court Thursday on the felony-4 charge of theft of at least $20,000 and less than $100,000 for alleged conduct between July 2014 and January 2016.

She is accused of taking money from the office of dentist Sharlene Martinson during this period.

Do you have questions about embezzlement?  Give Prosperident a call at 888-398-2327 or send an email to requests@dentalembezzlement.com

Content retrieved from: http://www.montrosepress.com/news/woman-accused-of-theft-from-dentist/article_b466b71e-86c3-11e6-8191-57c064e1d6dc.html

Embezzled dentist obtains settlement from bank that cashed checks

Harris Bank and the owners of a Naperville dental practice have settled a DuPage County Circuit Court lawsuit stemming from the theft of more than $85,000 by a former clinic employee. Dental practice owners Keith and Linda Brown and bank officials late Tuesday agreed to settle the Browns’ lawsuit, which sought nearly $50,000. The agreement came toward the end of the second day of a chancery court bench trial before Judge John T. Elsner.

“There is a court order that will essentially require the parties not to discuss any details of the settlement,” said Ben Alba, one of the Browns’ attorneys.

A lawsuit dismissal order could be entered by Elsner as early as next week, he said.

Do you have questions about embezzlement?  Give Prosperident a call at 888-398-2327 or send an email to requests@dentalembezzlement.com

Content retrieved from: https://www.highbeam.com/doc/1N1-0F3D23668AB7A7B5.html

University of Louisville Professor found dead after being questioned by police about missing funds

University of Louisville dental professor Michael H. Martin’s was found dead in his office hours after he was interviewed by university police for allegedly misusing a university credit card.

The credit card was for a $353,875 grant that Martin directed that was funded by the National Institutes of Health, according to university records.

Hebert said Friday that two School of Dentistry employees — Joan Scott, the unit business manager, and Gary Dryden, the assistant dean for finance — were suspended without pay in connection with that investigation.

Scott was suspended for three days, and Dryden for five, Hebert said, but he described both as “good employees.”

Do you have questions about embezzlement?  Give Prosperident a call at 888-398-2327 or send an email to requests@dentalembezzlement.com

Content retrieved from: http://www.courier-journal.com/story/news/crime/2014/07/02/admitted-borrowing-university-money/12047131/