“My Day-end Report Balances to my Deposit, so I Must Be Safe From Embezzlement”

We hear this a lot.  At the core of your practice management software is a concept called “double-entry accounting.”  This means that a transaction mandatorily affects two different “accounts” maintained by your software.

So, for example, entering a dental procedure increases both your “charges” and the receivable due from that patient.  Entering a payment decreases the patient’s receivable balance and adds to “collections.”

In a perfect world, stealing money would cause one of two issues; either the day-end report would not balance to the bank deposit if the amount stolen had first been entered as a payment in the practice management software. On the other hand, if the amount received was stolen without anything being entered into the practice’s practice management software, the software would show some unfortunate patient having a balance that is higher than what it is supposed to be.

Many dentists believe that the existence of this double-entry accounting will prevent would-be thieves from successfully stealing from the practice.

There are a couple of flaws in that logic. First, many dentists do not thoroughly check reports from their practice management software against the bank deposit. It isn’t sufficient to limit the review to the amount of cash and checks being taken to the bank; the practice owner must also verify deposits made directly by third parties, such as credit card payments and “ACH” (automated clearing house) deposits made by some insurance companies and other third parties like patient financing companies. A complicating factor is that there is often a timing difference — if a patient pays by credit card today, the practice management software treats this payment as being received today, although there is typically a delay of a couple of days before this payment is deposited to the practice’s bank account.

So if the practice owner is not verifying deposits or is doing an incomplete verification, a thief may not be required to display any artistry — they simply create an out-of-balance situation in the knowledge that the doctor will not find it.

If the day-end routing is done properly by the practice owner, a thief must become more creative. There are a number of methods of generating “fake news” where so that the reports produced by the practice management software are inaccurate, so that the day-end appears to balance while at the same time patient account balances are accurate. This is common, and something that we see almost daily.

Because we do not want to add to the tool kits of any embezzlers who happen to be reading this article, we are not going to enumerate the methods of “cooking the books” here; however a dentist with concerns or questions is welcome to contact us for a private discussion.

Prosperident’s David Harris Featured in Dental Economics


I recently received the following email from a dentist: “My embezzler passed my references check. I asked for six references, and she passed with flying colors… and then proceeded to rob me blind. I thought that maybe y’all needed to make a post about it, or SOMETHING, to the world of dentistry, because seriously, this is why we can’t trust references. When people fabricate deception like this, how can we trust anything, as employers, to be able to find someone worthy of hiring?”

The dentist was referring to a website that, for a fee, will supply false references to help someone pass reference checks. Here is what one such site claims:

“Paladin Deception Services is here to assist you in obtaining the fictitious reference, the little white lie, or the alibi that you need. Our agency can provide you with either male or female testimonials over the phone in the local area code that you require. We’re confidential, professional, innovative, and affordable. Most importantly, we keep it legal. Get the verification that you need!”


Mashpee, MA Woman Charged With Embezzling More Than $400,000


A Mashpee woman is charged with embezzling nearly a half-million dollars from her former employer, a dental specialist in Yarmouth, over the course of 14 years.

Mary Lou McGrail, 69, allegedly falsified records and stole $427,742 from the owner of Professional Endodontics between 2002 and 2016, according to court files.

Ms. McGrail, who was arraigned Wednesday, December 5, in Barnstable District Court, faces one count of larceny over $250 and one count of falsifying/omitting entry in books.

Her employer first approached Yarmouth police in October 2016 to report his employee and longtime friend had been stealing money from his dental business. According to court files, in 2017, Ms. McGrail admitted to embezzling approximately $14,000 and her husband offered to repay $16,000.

The doctor refused this offer because he believed Ms. McGrail had taken “in excess of $20,000,” according to a report. He fired Ms. McGrail from her role as a bookkeeper and administrative assistant.

A detective informed the doctor he would need to complete a full audit of his records, recommending he solicit a forensic accountant to examine them.

The doctor’s own accountant completed a review and determined between $85,000 and $100,000 had been embezzled. Later, an outside consulting firm assisted with an official audit of all financial records since 2002, arriving at the figure of more than $400,000 in embezzled funds.

The audit found 487 different transactions where either financial records or medical services had been “altered or omitted by Ms. McGrail to ensure that the missing money was not detected,” according to the report. For instance, in August 2014, a service to a client was listed as a “free consultation” although the client had paid Ms. McGrail $1,095.

As part of the investigation, a Barnstable County Superior Court grand jury granted a detective permission to obtain Ms. McGrail’s bank records from Citizens Bank, the report says.

Ms. McGrail is due back in court for a pretrial hearing on January 22.

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Content retrieved from https://www.capenews.net/mashpee/news/mashpee-woman-charged-with-embezzling-more-than/article_9e470426-6601-5310-9880-f8b935a5af48.html


Office Manager at Flushing, NY Dental Firm Busted for Pocketing $35K in Insurance Checks


Law enforcement agents extracted a former Flushing dental office manager and hauled her to court on charges that she allegedly stole thousands in insurance payments to the clinic.

Prosecutors said that Manhattan’s Katerin Rochet, 37, was picked up on Jan. 9 on a nine-count indictment charging her with third-degree grand larceny, first-degree falsifying business records, criminal possession of a forged instrument and identity theft.

According to Queens District Attorney Richard A. Brown, Rochet allegedly stole more than $35,000 in insurance payments made to the Flushing Dental Group, located at 39-01 Main St., where she worked as an office manager.

“[She] used her position to steal from the people who gave her a job,” Brown said in a Jan. 10 press release. “In deliberate acts of deception, the defendant is accused of opening several bank accounts in the dental office’s name — posing as the president of the office — and then swiped the insurance checks that were intended for the dental practice. This kind of brazen thievery will not be tolerated.”

Brown said the theft took place between January and May 2017, while Rochet was employed by Flushing Dental Group. She allegedly forged an official record from the Department of State’s Division of Corporations with the office president’s name, then used it to open several bank accounts.

Within a few months, authorities said, Rochet allegedly collected more than $35,000 in insurance checks intended for Flushing Dental Group. She allegedly deposited the checks into the accounts that she opened, then funneled the money into a bank account that her mother owned.

The scheme was unraveled through an investigation by the NYPD Queens District Attorney’s Detective Squad.

At her Jan. 9 arraignment, Rochet was ordered held on $25,000 bail and to return to court on March 14. She faces between 3 1/2 and 7 years behind bars if convicted.

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Content retrieved from https://qns.com/story/2019/01/11/office-manager-at-flushing-dental-firm-busted-for-pocketing-35k-in-insurance-checks/

North Carolina Dental Office Employee Charged with Insurance Fraud, Embezzlement


RALEIGH — North Carolina Insurance Commissioner Mike Causey today announced the arrest of Margarita Alejo, 38, of 2500 Carver St., Durham. Alejo is charged with insurance fraud, obtaining property by false pretense, and embezzlement, all felonies.

Special Agents with the Department of Insurance’s Criminal Investigations Division accuse Alejo of manipulating claims with Cigna on a patient, falsifying patient records, opening unauthorized accounts and obtaining approximately $15,000 from patients of Harmony Family Dentistry in Durham. According to the arrest warrant, she did this while working as a front desk employee between November 2017 and May 2018.

Durham police arrested Alejo on Dec. 21, 2018. She was given a $15,000 unsecured bond.

Insurance fraud costs American consumers approximately $80 billion dollars a year. According to Commissioner Causey, fraud costs North Carolinians between 15 and 20 cents of every dollar paid on insurance premiums — and it’s getting worse.

“I am determined to stem the tide of insurance fraud in this state in order to save residents money,” said Commissioner Causey. “That’s why I am dedicated to the mission of our NCDOI law enforcement officers who investigate and prosecute claims of insurance and bail bonding fraud.”

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Content retrieved from http://www.ncdoi.com/media/news2/year/2019/010919c.asp