Is an employee embezzling from your physician practice? Heed these warning signs

Physician practices need to be aware that theft and embezzlement are not as uncommon as they might think.

Physician practices are vulnerable to embezzlement, even by trusted employees.

One of the most extreme cases occurred in 2011 when 45-year-old office manager Marlene Rice Hoyle embezzled $1.2 million over an 11-year period from a North Carolina practice where she worked for 20 years. She was sentenced to four to five years in prison and had to pay back more than $1 million.

"No matter how much you trust someone, or how long they have been in your employment, you should still have mechanisms to check and verify the finances of the business," Cleveland County District Attorney Rick Shaffer said at the time. "Because what happens ... is people become so much like family or friends to the employer that they give them a degree of trust they do not deserve."

One warning sign is when an employee is reluctant to take time off or share tasks with others or is secretive about their work, Karen Mosteller, a CPA, tells Medical Economics. She said practice leaders should require all employees to take vacations and then check people’s work when they are out of the office. 

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That would have been good advice in the Hoyle case. Although colleagues had long suspected Hoyle of stealing, they were unable to produce concrete proof until she was absent from the office, Stephen Jones, M.D., said in court. 

Cases such as this one should serve as a warning that practices must have mechanisms to check and verify the finances of their business.

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Other warning signs something is wrong, according to the Medical Economics article: an employee suddenly has money to spare or often presents a stack of checks that need signing at the busiest time of the day. That last tip comes from a source with some experience: Lisa Sundquist, a former office manager who was convicted of embezzlement.