The attention-getting article is titled : “ 17-Year sentence for West Palm Beach Eye Doctor in $ 73 million Medicare Fraud Case. ” Dr. Salomon Melgen was convicted of 67 crimes involving healthcare imposter for persuading aged patients to undergo excruciating treatments they didn ’ t need for diseases they didn ’ metric ton have. Dr. Melgen became the highest-paid Medicare doctor by rendering unnecessary care to his aged affected role population who trusted him .
Beyond the fiscal fraud that was bad enough, the aesculapian tests were agonizing. Melgen unabashedly billed Medicare for procedures he claimed were performed on the artificial eyes of one-eyed patients as if they were actual. normally performed over several minutes, he completed the tests in seconds, making them useless as a diagnostic joyride. The list of inappropriate charge and examples of patient mistreatment are many, but you get the compass point .
Why would a apparently comfortable doctor bend to fraud ? What possesses a person to commit such acts ?
These three basic circumstances lead to the commission of imposter as depicted by the “ Fraud Triangle ” below :
Financial Pressure : The upper-left stage of the triangle represents financial pressure. This is what creates the motivation or bonus for the deceitful act. The individual often has some “ perceived unshareable fiscal trouble, ” so he begins to consider committing a deceitful act. For exemplify, he might steal to conceal and support a drug trouble, pay off debts, or acquire expensive cars or houses. Changes in fiscal circumstances such as divorce or chronic family illness can besides create a fiscal incentive. Greed is frequently the drive influence .
Opportunity: The buttocks stage is opportunity, which defines the method by which the deceitful act can be committed. The person must see some room he can use or abuse his position of trust to solve his fiscal problem with a abject perceived risk of getting caught. The opportunity to commit imposter can arise from diverse circumstances such as :
- Weak internal controls.
- No separation of duties.
- No rotation of tasks.
- Lack of enforcement or monitoring.
Rationalization : The last leg represents rationalization. That means the person committing fraud sees himself as a normal, honest person who is trapped in a badly situation. thus, the perpetrator of imposter justifies his fraud to himself. common rationalizations include ( but are not limited to ) the following :
- “I was only borrowing the money.”
- “I was entitled to the money.”
- “I was underpaid.”
- “I have been wronged.”
- “There is no other way.”
The Fraud Triangle has been far refined as it applies to elder bodied executives with similar and complementary observations. The Executive Fraud Triangle recognizes those attributes of avarice, pride, and entitlement which “ surround ” the executive :
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- Greed: Executives want money, position, title, authority, perks, services, etc.
- Pride: Executives think they’re better, smarter, more skilled, or superior.
- Entitled: Executives feel as though they deserve money, position, title, authority, perks, services, etc.”
In the article discussed above, the fib is compounded by a life style of wealth, excess, and world power. Dr. Melgen abused his side of trust, thinking he wouldn ’ deoxythymidine monophosphate be caught. In terms of fiscal pressure, Dr. Melgen was greedy – seeking what seemed comparable no limits to wealth and baron. He had the opportunity because his patients placed their implicit trust in him. He owned his own exercise, and as the doctor in ultimate restraint of what goes on the charge tabloid, an opportunity was clean. We can entirely guess at his systematization which might range from “ I deserve it ” to “ I ’ m only borrowing it. ” Consistent with the executive fraud triangle, we see attest of greed, pride, and entitlement. If you were an investor in Dr. Melgen ’ sulfur practice, his problems would be your problems !
Avant Advisory Group professionals have uncovered many instances in which a person of entrust – the owner or samara executives with his hand in the cookie jolt or worse. He or she sees an opportunity and seems never satisfied careless of how much money or office. surprisingly, many if not most frauds, are detected from a tiptoe. We receive then many calls to come in and look about because “ something does not seem right, ” or because person said or saw something .
sometimes “ the numbers good don ’ metric ton add up. ” It can be an isolated incident or the cash balances may not match up to the reported profitableness. It can be inappropriately capitalizing expenses into inventory or the expense of capital expenditures. Or it can be the intended manipulation of reported sales and the transfer of cash balances into a non-core commercial enterprise entity. nowadays, the challenges are greater, as are the pressures to meet target numbers. And sometimes, management makes a sagacity birdcall on how to report the numbers in the current period hoping to catch up sometime in the future. No topic the reservoir of the discrepancy, the accounting needs to be corrected and the results viewed in the proper perspective .
By practicing with Big Four CPA audit firms over the years, we have obtained deep and broad account and audit know. And it is experience supplemented by countless forensic, imposter and bodied examinations performed on behalf of private equity firms, hedge funds, family offices, banks, corporate boards of directors and audit committees, law firms, and other stakeholders. As a result, we are wonderfully equipped with deeply technical cognition and practical skills necessary to perform cost effective forensic, imposter, and corporate inner investigations. This makes us effective in contributing to impregnable challenge resolution strategies and advisory opinions.
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further, this fiscal forensic expertness provides our consultants with an extra perspective beyond those experienced in or performing merely traditional fiscal audit or due application. In fact, as function of performing everyday quality of earnings engagements and assessments of portfolio companies, we have identified questionable and even deceitful accountancy and report issues .
therefore if your “ numbers just don ’ thyroxine add up, ” give us a call and we will help put your beware at rest by bringing you answers that you can trust .
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