dental embezzlement

Dental Office Embezzlement of $100,000 in Dental Insurance Payments

December 27, 2011 By Catherine Hughes 2 Comments

Dental office embezzlement is still alive and well in California.

Deborah Lynn Kessler, 45, pleaded guilty to four counts of grand theft over charges that she embezzled more than $100,000 in dental insurance payments at the dental practice where where was manager.

The Orange County Register reports that Kessler signed dental insurance payments over to her personal bank accounts over the course of about three years. Investigators initially said she may have used the money to pay for an RV, boats and trips, and to cover her personal bills.

She was sentenced to two years in jail, plus an additional two more years of community supervision.

According to a 2010 Association of Certified Fraud Examiners report almost one-fourth of all embezzlement cases report losses of at least $1 million with smaller businesses being the most susceptible to fraud.

The average embezzlement scheme lasts for 18 months before detection.

The U.S Chamber of Commerce estimates that employee embezzlement costs American companies $20 billion to $40 billion a year. A long-term employee is 15 times more likely than a stranger to steal from a company.

Some of the best ways to prevent dental office embezzlement is by implementing a segregation of duties, keeping petty cash to a minimum and requiring dual signatures on checks.

Has your dental practice ever been the victim of employee embezzlement? What happened, and how did you handle it?

For more on the Orange County Register story see: Dental worker guilty of stealing more than $100,000

Dentists: Beware of the China Domain Registration Scam

October 4, 2011 By Catherine Hughes Leave a Comment

China Domain Registration Scam Domain registration scams continue, both offline and online.

In the online version, a dentist receives an email, wanting to “clear up” ownership for their dental practice domain that someone else is allegedly attempting to register in China.

The emails usually look something like this -

Dear Manager,

(If you are not the person who is in charge of this, please forward this to your CEO,Thanks)

This email is from China domain name registration center, which mainly deal with the domain name registration and dispute internationally in China and Asia.

On September 26th 2011, We received Tianhua Ltd’s application that they are registering the name ” yourdomainname ” as their Internet Keyword and ” yourdomainname .cn “、” yourdomainname.com.cn ” 、” yourdomainname .asia ” domain names etc.., It is China and ASIA domain names. But after auditing we found the brand name been used by your company. As the domain name registrar in China, it is our duty to notice you, so I am sending you this Email to check.

According to the principle in China, your company is the owner of the trademark, In our auditing time we can keep the domain names safe for you firstly, but our audit period is limited, if you object the third party application these domain names and need to protect the brand in china and Asia by yourself, please let the responsible officer contact us as soon as possible. Thank you!

Best Regards,

John
General Manager
Shanghai Office (Head Office)
3002, Nanhai Building, No. 854 Nandan Road,
Xuhui District, Shanghai 200070, China
Tel: +86 216191 8696
Mobile: +86 136615 29704
Fax: +86 216191 8697
Web:

This is an updated email version of an old fax scam -

According to the FTC, consumers – many of them operating small businesses on the ‘Net – have received unsolicited solicitations stating, “URGENT NOTICE OF IDENTICAL DOMAIN NAME APPLICATION BY A THIRD PARTY.” The letterhead identifies the sender as either Electronic Domain Name Monitoring or Corporate Domain Name Monitoring.

The solicitation warns that an application for a domain name almost identical to the recipient’s has been “submitted to the National Domain Name Registry (NDNR) for registration,” by an unidentified third party. For example, the owner of a site “www.sobi-sky.org” was told that an application had been submitted to obtain the domain name “www.sobi-sky.net”

The solicitation says, ” Consequently, it is our opinion that this application may have been submitted in bad faith. . ..” The solicitation lists four reasons someone might want a copy-cat domain name, including “disrupting the business of a competitor,” or intentionally attempting to lure someone else’s customers by creating a confusingly similar Web address.

The fax solicitation offers to block the application by obtaining the copy-cat domain name for the fax recipient for a fee of $70. It warns that, if the consumer fails to act, “NDNR WILL NOT BE LIABLE FOR THE LOSS OF DOMAIN NAME LICENSE, IDENTICAL OR CONFUSINGLY SIMILAR USE OF YOUR COMPANY’S NAME; OR INTERRUPTION OF BUSINESS ACTIVITY OR BUSINESS LOSSES.”

Often online scams come from successful offline scams that just get updated for online use, much like viral email hoaxes do. Remember the old paper chain letters?

Whenever you receive a suspect email, some great sites to check their validity are -

Snoops.com

Hoax-Slayer.com

TruthOrFiction.com

Urbanlegends.about.com

Google can be a great hoax research tool if you search the company name or website address offering to “help” you with your domain name registration.

By searching the website address on Google I see others have posted about this domain registration scam -

Using Google to search for scams

Also, when I attempted to visit www.ygnetworkltd.com I got the following warning about the website -

China Domain Registration Scam website

When in doubt always check with your domain name registration company. Never be in a hurry to answer an unsolicited email asking you for money from a company you don’t know.

To read more about this type of domain registration scam see: FTC Halts Domain Name Scam Thousands of Consumers Pay Up To Fend Off Fictional Poachers

Filed Under: Dental Editorials, The Wealthy Dentist Tagged With: dental embezzlement, dental practice management, dental scams, dentist, dentistry, dentists, hoaxes, internet scams

Orthodontic Braces: Taxpayers Spent $424 Million for Children in Texas

September 6, 2011 By Jim Du Molin 2 Comments

In June of this year, The Wealthy Dentist published a story about Taxpayers footing the bill for orthodontic braces in Texas.

In Texas, Medicaid pays dentists for orthodontics per procedure, instead of a lump sum for the “finished mouth” of straight teeth.

This has made Medicaid orthodontia a lucrative dental business in Texas.

WFAA-TV of Texas has been investigating this story for the last six months and has uncovered hundreds of millions of dollars of questionable Medicaid spending on dental braces for children in Texas. Their news reports prompted federal investigators to now audit the Texas Health and Human Services Commission, which controls the Medicaid funds.

According to the WFAA website -

In a letter to the state, the Inspector General says it will examine the “authorization process for orthodontic treatment” under Texas Medicaid. “The objective of our audit,” the letter continues, “is to review the State’s controls to ensure that only medically necessary orthodontic cases are paid.” The time period covered by the audit is September 1, 2008 through May 28, 2011.

The new station’s investigation revealed that during that period, Texas taxpayers spent $424 million on orthodontic braces for children under Medicaid. Taxpayers spent $100 million in 2008, $140 million in 2009, and $184 million in 2010, state records show.

Texas dentist, Dr. Christine Ellis, who teaches at UT Southwestern Medical Center, has twice traveled to Washington in an attempt to convince lawmakers to scale back Texas Medicaid orthodontics payments and divert funds for more pressing dental needs.

Her attempts fell on deaf ears. According to the WFAA-TV article, Ellis said, “There’s no response. No one is putting the brakes on this thing.”

Billy Millwee of the Texas Health and Human Services Commission is now telling WFAA-TV that if taxpayers money has been lost, the Attorney General might take action to get it back. He went on to say that Texas will have a new managed care Medicaid dental program beginning next spring.

For more on this story see: Feds Investigate Texas Dental Medicaid Program and Taxpayers Footing the Bill for Braces in Texas.

Filed Under: Dental Editorials, The Wealthy Dentist Tagged With: braces, Dental Care, dental embezzlement, Dental News, dental practice, dentist, dentistry, dentists, health care, Medicaid Fraud, orthodontic, orthodontics, orthodontist

Dental Practice Fraud Causes 200k Embezzlement Warning

May 10, 2011 By Jim Du Molin 6 Comments

dental embezzlement The Colorado Dental Association recently sent an email alert to member dentists regarding a $200,000+ embezzlement that occurred in a dental practice related to the processing of credit cards.

According to the Metropolitan Denver Dental Society, experts estimate that more than 50% of dentists are embezzled with an average loss of $50,000.

But, because embezzlers often steal relatively small amounts over a long period of time, the misappropriation of funds goes unnoticed.

The U.S. Chamber of Commerce estimates that 75 percent of all employees steal at least once, and that half of these steal repeatedly. The Denver District Attorney’s Office website warns, “embezzlement is at epidemic proportions accounting for 20 percent of all cases filed by the Denver District Attorney’s Economic Crime Unit.” In 1970, one in 200 employees was dishonest; it is estimated that today, one in six employees is dishonest.

The MDDS states that the most common method of embezzlement in a dental practice occurs through theft of cash, checks or supplies.

Here are a few embezzlement scenarios that occur in dental practices -

Cash is pocketed from patients.
Petty cash is stolen.
Cash or checks are removed from the daily deposits and replaced with subsequent receipts.
Insurance fraud.
Endorsements are forged.
Writing duplicate accounts payable checks or writing checks to phony vendors.
Stealing supplies and re-selling or returning to vendors for refunds that are pocketed by employees.

In a survey The Wealthy Dentist performed in 2010, 59% of the dentists surveyed said they had discovered evidence of embezzlement. With such a high degree of fraud, how does a dentist diminish the risk of embezzlement?

The American Bar Association offers the following checklist on how to prevent fraud and embezzlement -

Adopt an effective, documented system of internal controls to protect against acts of dishonest staff.
Bank and credit card statements can be delivered to the business owner’s home or separate address for personal review.
Checks and debit transactions should be reviewed with the statements.
Checks should require two signatures, or be reviewed by the owner.
A copy of the bank reconciliation should be attached to each monthly bank statement and reviewed by two parties.
Finance or accounting personnel should not be signers on all bank accounts.
Checks received in the mail should be immediately endorsed by a two-person team who opens and processes the mail.
After checks are properly endorsed and verified, the bookkeeper should take charge of the checks for deposit.

Have you recently experienced embezzlement in your dental practice?

For more on employee embezzlement and how to prevent it see – The Metropolitan Denver Dental Society Watchdog

Filed Under: The Wealthy Dentist Tagged With: dental embezzlement, Dental News, dental practice embezzlement, dental practice management, embezzlement

Warning: Dentists Get Scammed for $50 Million

March 8, 2011 By Jim Du Molin 4 Comments

Dentists Get Scammed for $50 Million
Who can you trust?

Dentists and physicians are legendary for losing money to scam artists. But who would have thought two dentist would take their peers to the cleaners for $50 million.

What school did these guys go to?

Two Canadian dentists are being investigated by the Ontario Securities Commission (OSC) for an alleged $50 million Ponzi scheme.

According to the Star, in 2006 Peter Sbaraglia, DDS and his wife, Mandy Sbaraglia, DDS joined forces with Robert Mander, the mastermind of a Ponzi scheme that snatched the $50 million from naive investors.

The OSC’s Statement of Allegations states, “Sbaraglia, acting on behalf of CO Capital Growth, used investors’ funds to repay other investors and to pay for his and his family’s personal expenses and not for the benefit of CO investors. In addition, Sbaraglia and his spouse received over $2 million as purported profits earned by them in the Ponzi scheme.”

Fifty investors, many of who were dentists familiar with the Sbaraglias, may have lost up to $50 million in the scheme. Regulators calculate the amount as closer to $40 million.

The OSC claims that as much as $7 million of investors’ money remained in the Sbaraglias’ personal accounts and was never properly invested. Approximately $2 million was considered profits by the Sbaraglias and used for personal expenses. Another $2.4 million was lost in poor trades, and $585,000 was used to buy open venture securities. Much of the remainder of the money was used for business expenses, according to the OSC.

Rick McIntosh, Mandy Sbaraglia’s brother and former head of the Toronto Police Association, also lost money investing with CO Capital Growth. McIntosh and his wife invested about $1 million with the Sbaraglias.

Both Peter and Mandy Sbaraglia claim they are innocent victims and blame Robert Mander for the financial collapse of CO Capital Growth. Still, in December, a judge put all the Sparaglias’ assets into receivership, which included their $2.9 million home.

It’s never a good idea to invest money with family or friends, but if you do invest, you should be aware of the possibility of losing your money.

Have you ever been approached to invest in something offering a crazy rate of return on your investment? Do you think you could be duped into investing in a Ponzi scheme?

For a full report on the Sbaraglias’ story, visit the Star.