Review each of the actual case studies below and analyze the situation. If you were the administrator of the organization, how could you use internal audits to uncover the fraud before an external audit occurred? What type of internal audit occurred? What type of internal audit would you use? Be certain to include a clear description of the scope of your audit.
Case Study #1
On January 6, 2012, in El Paso, Texas, Anthony Valdez was sentenced to 300 months in prison, three years of supervised release, and ordered to pay $13,356,645 in restitution and to forfeit more than $1.7 million for health care fraud and money laundering. The judge also handed down a monetary judgment against Valdez of $9,741,649. According to court documents, Valdez, a former physician, was the owner of the Institute of Pain Management with clinics in El Paso and San Antonio. On July 1, 2011, Valdez was convicted by a jury of one count conspiracy to commit health care fraud, six counts of health care fraud, six counts of false statements related to health care matters and three counts of money laundering. Evidence during trial revealed that beginning in January 2005 and continuing through December 2009, Valdez caused fraudulent claims to be submitted to Medicare, Medicaid, and TRICARE for procedures which he did not perform or were non-reimbursable.
