In 2014, Benjamin Perlman, a Boston-based dentist, interviewed a young woman, Tina, to fill the business manager position at his practice. Tina was smart, confident and knowledgeable. He hired her on the spot.

Perlman had a lot going on in addition to his dental practice. He ran a charity dental clinic in the Middle East and held several real estate interests. He didn't have the time or proclivity to manage the tiresome details of running his busy practice. Perlman felt that Tina could free him of that responsibility.

She proved uber-competent, so Perlman trusted her implicitly. He totally removed himself from financial operations and allowed her to run the practice as she saw fit. Tina opened all mail and cut every check, including her own paycheck. She made all the bank deposits and became well-acquainted with the bank employees. They knew that her boss trusted her and authorized her every request.

After about a year, Perlman began to notice that the business checking account seemed to be perpetually short on funds. He chalked it up to a temporary dip in business and didn't give it much thought. He knew Tina had everything under control. One morning soon after, however, the bank notified Perlman that four checks had bounced. Confused, he paid a visit to the bank. The teller produced copies of the day's checks for review. Perlman scanned the images and felt a pit form in his stomach. The very first check amounted to $1,500 and was made out to Tina.

Perlman quickly asked to see all the practice's activity for the last 30 days. He did some quick calculations and realized that, during this period, Tina had paid herself $10,000 on top of her normal paycheck. He immediately placed two phone calls. The first was to his accountant; the second was to the police. When Tina arrived to work that morning, two officers awaited her. She wordlessly supplied the officers with her lawyer's business card and presented her wrists to be handcuffed.

Perlman ultimately discovered that Tina had embezzled more than $100,000 from his practice during her year of employment. And he wasn't Tina's first victim she'd executed the same scheme at several other practices. Tina's total ill-gotten gains had exceeded $500,000.

Take control of your books and protect your practice. Maybe it's boring and tedious. But better bored than defrauded.

She was sentenced to two years in federal prison and deported to her native Vietnam after her release. Perlman wasn't able to recover all the stolen money, and he had to borrow money from his sister to make it through the year.

Case Question:

What steps could have been taken to prevent this fraud from occurring?

Answer rating: 100% (QA)

To prevent the fraud perpetrated by Tina from occurring several steps could have been taken Here are some measures that could have been implemented 1 Segregation of Duties One of the key control measu... View the full answer