Employee embezzled $36k from Savage dental practice
Savage, MN. A Savage resident and former employee of Smiles of Distinction in Savage is accused of embezzling more than $36,000 in cash from the dental practice, and she also allegedly defrauded insurance companies to obtain reimbursements for procedures that were never performed.
Melissa Kate Arndt, 50, was charged last month in Scott County District Court with theft by swindle, theft and insurance fraud – all of which are felonies. Her first appearance in court is set for Jan. 12, 2015.
According to the criminal complaint, Savage police were contacted on Nov. 2, 2013 by a dentist at Smiles of Distinction, 4300 Egan Drive, who reported that he had fired Arndt a month earlier because he suspected that she had been embezzling money from the practice.
He told police that he suspected Arndt of embezzling between $20,000 and $50,000 from the business by not making cash bank deposits that was required of her, and by not requiring family and friends to pay co-pays or portions of bills not covered by insurance.
On Nov. 26, 2013, the dentist provided police with documentation allegedly supporting his claims. He told police that he bought the business in 2007, and that Arndt had been an employee under previous ownership, so he decided to keep her on the staff. Arndt was responsible for front office work, deposits, scheduling and working with patients.
The dentist eventually opened a business account at a nearby bank in Savage, and after making an initial deposit, he tasked Arndt with making the cash deposits at the bank from that point forward. However, the dentist received a notice from the bank in December 2012 stating that there had been no transactions on his account for several years. When the dentists asked Arndt about the lack of deposits, she allegedly said that “they just didn’t receive many” cash payments, according to the complaint.
Before Arndt was fired, two other employees approached the dentist and stated that they believed Arndt was stealing from the practice. After Arndt was fired, the dentist started reviewing financial records, and he found that in 2008, a total of $11,726 in cash had been taken in by the business, but that none of that money was ever deposited in the practice’s bank account. He also found that in 2009, a total of $9,961 in cash had been taken in, but that none of it was ever deposited.
Further investigation by the dentist found that Arndt masked the alleged thefts by using “credit adjustments,” as she would allegedly delete entered cash payments and would re-enter them as cash adjustments. One example that the dentist gave was a billing for patient “T.L.” dated June 7, 2012 through July 22, 2013. The dentist said he spent a lot of time working on the patient’s teeth during those dates and the patient paid for most of it in cash. On June 7, 2012, the patient paid $1,217.54 toward his bill and the entry was listed as a credit adjustment and on July 22, 2013, Arndt listed a $860.20 amount owed by the patient as a credit adjustment. The dentist believed that all of the money was taken by Arndt instead of being deposited in the bank account.
The complaint states that Arndt also used credit adjustments to give sizable discounts to family members and associates, and that she filed insurance claims for dental work that had never been performed.
For instance, the dentist said he found several claims submitted in Arndt’s fiancée’s name for work that the dentist had not done. The dentist explained that the fiancée had Delta Dental insurance, and that Delta Dental sends reimbursements directly to its patients. The dentist provided police with eight service dates for crowns, examinations and cleanings that he did not perform on the fiancée.
The dentist said he believed the Arndt submitted the claims to her fiancée’s insurance company and that the fiancée received a total of $7,999.06 from Delta Dental. A review of the dentist’s schedule revealed that he was not treated on the dates listed and the dentist said he was absolutely positive that he never did any crowns for the man.
In an interview with police, the fiancée said he had not received crowns, but that he had received other treatments, and he thought the reimbursement checks from Delta Dental was for that work. When an investigator showed the fiancée a copy of his bank statement showing a $2,000 deposit from Delta Dental, as well as a copy of the dentist’s schedule indicating that he did not have an appointment on the date listed, the fiancée allegedly said, “I have no idea.” The dentist later reported that the fiancée’s entire file was deleted on the day that he fired Arndt.
An investigator met with a woman who works at the dental office who stated she had been employed as a dental hygienist at the dental office since January 2008. She said she also assists in other areas, including front desk operations. When asked about the practice of employees making credit adjustments on accounts, the woman said that the dentist has a plan wherein dependent children, employees and other family members can use credit for procedures performed and, as you gain experience in years of employment, you receive more credit.
She said that was one of the very few times credit adjustments are made and that all of the credit adjustments she has made had been under the dentist’s instructions, and each included explanations for the adjustment. After the woman reviewed the financial records, she allegedly told police Arndt was making unexplained credit adjustments which were not allowed by the dental office.
The woman also said Arndt was the only one responsible for taking cash payments. If Arndt was unavailable and the woman had to take cash payment, she had been instructed by Arndt to place the cash in a drawer by her desk, along with checks that had been received throughout the day. The woman said that looking back, she thought it was odd that Arndt always insisted the other employees leave before closing because she had to finish up with the deposits, even though Dr. Schultz said that he wanted all employees to leave at the same time for safety reasons.
The complaint states that cash totals taken by Arndt from the dental business are $36,128.81, and that the false claims issued by Arndt to Delta Dental totaled $9,497.06.
