Bookkeeper Tina Marie Reyes has just pled not guilty to embezzling $1.5 million from a group orthopedic practice in Newport Beach, California. It is her right, of course, but she had better summon Clarence Darrow to defend her. It is not looking too good for the 46-year-old woman.
A Three-Year Run
The charges against Ms. Reyes are specific, shameful and unethical. While in the employ as bookkeeper of California Orthopedic Specialists Inc., from August 2014 through July of 2017 she is accused of embezzling more than $1.5 million. In all, she must answer to 36 counts of grand theft which is referred to as “aggravated white-collar crime exceeding $500,000.”
Her unethical behavior was discovered almost by accident. One of the group’s physicians was on vacation when it was brought to his attention that a vendor hadn’t been paid on an overdue invoice. He reached Reyes to determine why the payment was delayed. She “insisted” she would make payment soon. The physician was puzzled and when he returned to the States, he decided to examine the bank statements. He was horrified.
He discovered a group account for the practice with unusually large sums, and then notices the practice’s credit cards had unusually large balances. Many of the charges were made to Reyes for personal purposes. She was fired in June 2017.
According to the charges:
“She was able to hide her theft by transferring just enough contributions from each individual doctor to cover the payments on the credit cards on all her charges and the company’s monthly payments, and then transfer money back into a doctor’s individual accounts to make them appear whole…A complete forensic audit revealed that defendant stole approximately $1.5 million.”
It was a clever enough case of fraud that could have only occurred in an atmosphere characterized by a lack of oversight. It is worth noting that the prior bookkeeper had been on the job for more than 20 years. She was honest and trustworthy and so naturally; the practice believed the new bookkeeper would be trustworthy as well.
The Opportunity
In a busy orthopedic practice, physicians, medical assistants and support staff are naturally focused on patient care. Given the ethical track record of the previous bookkeeper, there was a natural hands-off policy that was well established. Unfortunately, Ms. Reyes saw this as an opportunity to steal.
One of the basic tenets of an atmosphere where fraud has been allowed to exist is that a lack of oversite naturally can lead to embezzlement in one form or another.
Why does such activity exist? It is usually out of a need. In this case, the need was for money which translated into “power.” Ms. Reyes liked what the stolen money could do. Money signified power and prestige.
How could she rationalize her behavior? Rationalization is the third component of fraud. In this case, Ms. Reyes probably felt the physicians, being rich, would not miss or even notice the lost funds. Perhaps she was angry at the perception of income inequality, that she was the invisible bookkeeper and that they were wealthy physicians who never noticed her. In short, she felt entitled and empowered to steal.
The fraud could have been easily avoided through staff ethical training, checks and balances on all financial transactions with strong oversite. Instead, the practice is out $1.5 million and the bookkeeper is undoubtedly headed for a stiff jail sentence.
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