You've got that sinking feeling – you can't put your finger on it, but you think that one of your trusted senior staff might be engaging in improper and potentially fraudulent conduct, including respect to the your practice’s financial accounts, Medicare billing records or consent forms.
What are the red flags that this might be happening to you?
1. Out of the ordinary transactions and/or accounting - These can include strange cash transactions, mismatched payees, unprofessional looking invoices from suppliers, duplicate payments to different suppliers, payee's names not matching different ledgers. It might be a good idea to have your books audited by external auditors who can highlight any anomalies.
2. A high degree of access, trust and autonomy and overly close relationships with one or more others - Sadly, it is often the case that the fraudster will be a longstanding and senior staff member. Even more sadly, those people often develop very close relationships with workmates and together they conspire to defraud the business.
3. Push back on new internal controls - Fraudsters don't like change. They worry the things they are hiding using the current processes will be uncovered.
4. Not taking holidays - Fraudsters also don't like taking holidays, for the same reason as above.
5. Strange patterns of work - This could include, for example, working extra hours or working during unusual hours, refusing to delegate (except to their close workmate), not collaborating, insisting on dealing with certain suppliers.
6. Living the high life -This may seem trite but it's surprising how often fraudsters’ extravagances are ignored (think fashion, houses, cars and holidays). Pay attention to their personal expenditure but also their use of their corporate card. Company expense accounts are something that fraudsters like to abuse.
You've got that sinking feeling – you can't put your finger on it, but you think that one of your trusted senior staff might be engaging in improper and potentially fraudulent conduct, including respect to the your practice’s financial accounts, Medicare billing records or consent forms.
Get advice from your lawyers, but bear in mind if you have evidence and don't take appropriate action fraudsters will likely just move on to their next victim.
Justin Fung is a lawyer and the Head of Commercial and Corporate in our Avant Law team. Justin has over 15 years’ experience advising in commercial, corporate, risk, compliance, governance, regulatory enforcement and dispute resolution and advises clients in the private and public sectors. He was previously General Counsel of a national allied health group of companies and held Group and Divisional Head of Legal roles in a major ASX-listed health company, whose operations covered medical and dental centres, allied health, pathology, diagnostic imaging, assisted reproductive technologies, day surgeries and hospitals. Prior to these in-house legal roles, Justin was an Executive Counsel with the global law firm Herbert Smith Freehills where he practiced for over 10 years.
Disclaimer: The information in this article does not constitute legal advice or other professional advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of this content. The information in this article is current to 15 July 2022.
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