Photo by LCSO
A 35-year-old North Platte woman will face charges of theft and insurance fraud after allegedly embezzling from a local chiropractor and defrauding two insurance companies.Sherri A. Smith, 2120 Sunset Drive, was cited into Lincoln County Court on an arrest warrant Jan. 15. She was released from jail after posting a bond of 10-percent of $20,000.00. Smith will be arraigned in court Feb. 22.
Smith faces a maximum 40-years imprisonment with a minimum of two, fines of $50,000 or both if convicted of both crimes. She could also be ordered to pay restitution.
Smith worked for Dr. Jeffrey L. Hoover of Hoover Chiropractic Center for the past several years, according to an arrest warrant. She had been hired in January, 2005.
The warrant said Smith handled insurance billing matters in the office, greeted and scheduled patients, collected payments and handled the office mail.
In March 2007, Megan Hoover – Jeffrey Hoover’s wife and office manager – noticed Smith was somewhat protective about other office employees reviewing mail received into the office, according to the warrant.
Megan Hoover became suspicious and began an audit of cash receipts coming into the office, the warrant said. She noticed the cash receipts did not balance with the deposits..
On March 12, 2007, Megan Hoover confronted Smith about the missing money and Smith admitted taking money from the Hoover Chiropractic Center, according to the warrant. Then Smith and her husband, Steven Smith, reimbursed the center $8,500.00 cash – the amount they estimated Smith took during the course of her employment there.
The Hoovers fired Smith from the clinic, according to the warrant.
One of the fringe benefits given to employees of Hoovers, according to the warrant, are free medical treatments.
While Smith and her family members had never used Dr. Hoover before her employment with the clinic, her family had chiropractic treatments about 20 times during 26 months she worked there.
Dr. Hoover performed all those treatments to the Smith family for free, the warrant said.
But sometime after Smith’s termination from the clinic, Hoover received an explanation of benefits form for Taylor Smith, Sherri Smith’s son. The form showed that Hoover Chiropractic Center had treated Taylor Smith then billed the third party health administrator, United Health Care, for treatment.
United Health Care is the third party administrator for the health care claims for the Railroad Employees National Health and Welfare Plan. Highmark Inc. had previously been the third party administrator for railroad employees.
Hoover then learned that United Health Care had received other billings from Hoover Chiropractic for additional treatments to the Smith family, according to the warrant. Hoover denied billing for any medical treatments to the Smith family.
Charles P. Starr of the Nebraska Department of Insurance began an investigation into the matter.
Starr sought additional records and learned that Hoover Chiropractic had billed third party administrators for 2,157 individual medical treatments to members of the Smith family, the warrant said. As a result of the bogus billings, the insurance companies had issued 122 checks as payments to Hoover Chiropractic between Dec. 1, 2005 and April 3, 2007. A total of $68,620.15 was paid to Hoover Chiropractic from the Railroad Employees National Health and Welfare Plan for the alleged medical treatments to the Smith family.
Starr also learned that Hoover never endorsed any of the checks and had been completely unaware that the bills had been made or that the checks had been mailed to his office. The checks were transacted through accounts of Steven and Sherri Smith at the Hershey State Bank and the North Platte Union Pacific Employees Credit Union.
Starr also discovered 17 other checks, issued to Hoover Chiropractic for patients treated by Dr. Hoover which were unrelated to the Smith family, that were also transacted through Sherri Smith’s bank accounts, that totaled $11,676.13.
The warrant for Smith’s arrest was issued at the request of Lincoln County Attorney Jeff Meyer.