[Editor’s Note: This is the first of a two-part Incisor special report on employee fraud. In this segment, we examine the extent of the problem and why it disproportionately impacts dental practices. In Part Two, we’ll offer ways dentists can help prevent employee theft as well as methods to spot embezzlement early on.]


Special Report

Among other tasks that Jill D’Angelo undertook when she served as the office manager for Dr. Marjorie B. Leof’s general family dentistry practice in Pleasant Hills, PA, was to divert 129 payments from insurance companies to her own bank account. The total amount she embezzled from Dr. Leof, who has practiced since 1992, was approximately $475,000.

As detailed by the Pittsburgh Post-Gazette, D’Angelo also used her position to forge prescriptions under various dentists’ names to obtain more than 100 scripts for painkillers in her name and the name of relatives.

When convicted of her crimes in 2012 and sentenced to 41 months in prison, D’Angelo promised the court that she would “never again commit such a stupid, irresponsible and dishonest act.”

She lied.

Late last year, U.S. District Judge Cathy Bissoon, who sentenced D’Angelo the first go-around, sentenced her to a fresh total of 31 months in prison because of her “outrageous conduct” in once again embezzling and forging prescriptions, according to the Post-Gazette.

This time, the newspaper reports, using her married name—Jill Bowser—D’Angelo stole $87,000 from Steel City Dental Associates (SCDA) in Turtle Creek, PA, and also forged prescriptions for narcotic painkillers so she could sell them.

 

It was fortunate that the FBI and U.S. Postal Inspection Service were able to put a stop to D’Angelo’s criminal activities before the defendant completely destroyed Steel City Dental Associates and caused more losses to the insurers. –Shaun Sweeney, Assistant U.S. Attorney

 

Shaun Sweeney, the assistant U.S. attorney prosecuting the case, told the Post-Gazette that it was fortunate that the FBI and U.S. Postal Inspection Service were able to put a stop to D’Angelo’s criminal activities “before the defendant completely destroyed SCDA and caused more losses to the insurers.”

As victims go, Dr. Leof and the team at SCDA are far from alone.

Judge Cathy Bissoon
Judge Cathy Bissoon
Deanna Mache Gray
Deanna Mache Gray
Roxana Dusanek
Roxana Dusanek
  • In January 2019, Deanna Mache Gray pled guilty to stealing small but steady amounts of funds, totaling $421,119, from her employer, orthodontist Dr. Penny Lampros of Roanoke, VA. Gray had worked for Dr. Lampros for almost two decades. Dr. Lampros described the theft as “a sucker punch in the stomach,” according to The Roanoke Times.
  • Robin Bernazzani was charged in July 2018 with embezzling an estimated $500,000 over a six-year period from Dental Associates of the Southwest in Durango, CO.
  • Last October, Julia Vaysglus was charged with eight counts of bank fraud and other crimes for misappropriating more than $348,000 from a Boston-based dental practice by diverting at least 276 checks from various insurance companies for services rendered to patients.
  • In December 2018, bail was set at $300,000 for Roxana Dusanek, who allegedly stole more than $400,000 from a Hinsdale, IL, dental practice, where she worked as a part-time bookkeeper.
  • Essence Boatwright, an account manager for Carestream Dental in Atlanta, was accused early this year of stealing more than $84,000 from patients over a period of five years.
  • Annette M. Straily, the office manager of a dental office in Duncan, OK, pled guilty and agreed to make restitution of $283,005 after admitting she embezzled funds for a period of about five years from April 2012 through June 2017.
  • This past January, a front desk employee at Harmony Family Dentistry in Durham, NC, was arrested for opening unauthorized accounts and obtaining approximately $15,000 from patients.
  • The Canadian Press reported in March, 2018 on the general manager of a dental practice in Ontario who allegedly defrauded her employer of more than $550,000.

Embezzlement and fraud are pervasive problems for professional practices and small businesses throughout North America. According to Statistic Brain, employee theft costs U.S. businesses $50 billion annually.

The extent of employee theft may actually be much greater than court records and prosecutions suggest. That’s because many businesses choose not to bring criminal complaints against the fraudsters, either reaching a private settlement or simply swallowing their losses.

Dental offices are particularly vulnerable, experts explain, because many practice owners are so focused on treating patients that they fail to properly supervise their team members who handle billing, insurance, and accounting. In addition, dentists often—mistakenly—come to view their team as trusted “family members,” oblivious to the need for close supervision and the widespread occurrence of business crime.

 

Fraudsters who had been with their companies for more than five years stole twice as much on average as those whose tenure was less than five years.

 

“It can be incredibly devastating to find out they [employees] have been ripping you off,” Doug Karpp, told CNBC in an interview. Karpp oversees crime and related behavior for Hiscox, a global specialist insurer.

Hiscox's Doug Karpp
Hiscox's Doug Karpp

According to a 2016 study undertaken by Hiscox, 68% of all employee theft cases involve small and midsize businesses, tallying up a median loss of $289,864 per victim.

The Association of Certified Fraud Examiners (ACFE), the world’s largest anti-fraud organization, notes that an act of fraud typically involves not only the commission of the scheme itself, but also efforts to conceal the misdeeds.

In its 2018 global study on occupational fraud and abuse, ACFE found that the median duration of fraud schemes is 16 months. Moreover, fraudsters who had been with their companies for more than five years stole twice as much on average as those whose tenure was less than five years.

Often, the crooked employee is only discovered due to a tip from a colleague or through a fluke, such as a complaint from a vendor or customer (patient) whose communication unintentionally reveals the misdeeds.

The best growth medium for employee fraud, according to experts, is a thriving business or practice. That’s because when owners are seeing their incomes rising consistently, they are far less inclined to scrutinize their books.

All that money pouring in is a strong temptation for employees who justify their theft to themselves by reasoning that what they pocket won’t be missed.


Why once-trusted employees turn to theft, and how dental practice owners can prevent it, will be covered in Part Two of this Special Report, in the next edition of Incisor.

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