Pearl Lu 15

12-Knowledge February 9, 2023

SA 2. Ethical Case Analysis: A White-Collar Crime: Dr. Smith’s Insurance Fraud

SECTION DESCRIPTION

I. Background of the Before assembling any determinations in the matter, one

Case must foremost examine and evaluate what had transpired in
the given scenario, significantly providing the reality that the
case concerns an incident that had taken place among
family members. First of all, one must recognize the
background of the case which includes all the events that
had (or had not) occurred prior to the matter at hand. To
start, the Smiths are a notably successful family with both
brothers having a huge expectation to continue the
excellence that had been started by his father's family
practice of over 20 years. Though Robert Smith has a great
resumé with his fellowship as a cardiothoracic surgeon in
New York and his studies taken up at John Hopkins
University, Robert is evidently intelligent and on his path
towards becoming one of the greater heart surgeons in the
country. Yet his familial duty caused him to return home to
his small town in Ohio, causing him to place a halt on his
pursuit of becoming a heart surgeon, potentially allowing
regret to fester inside him. Joining his brother in the
business, Saul sold his accounting firm and sought to help
out with the finance and business aspect of the operations.
Prior to Saul's arrival, Robert had been handling his own
financial statements and patient files receiving no external
help. However, as Saul reviewed the financial statements,
he noticed charges to Medicaid from individuals who were
not classified as "low-income" Saul made the assumption
that his brother was not a skilled financier, yet he later
discovered a pattern dating back five years in the charges to
Medicaid. However, to Saul's dismay, once Robert was
confronted by Saul, he played off his thievery as a mistake
and even went to praise Saul for noticing his mistake. Such
praise was followed up with no means to solve the matter,
throwing all of the work back to Saul. With a charge
exceeding $25,000, Saul couldn't find it in himself to justify
this wrongdoing with the work they had done for the town.
He was left with the ethical dilemma of placing his brother's
 career at risk, rather, also his very own practice and life were
at risk as well.

There are several evident stakeholders in this case. Most

notably would be the Smith brothers, Robert and Saul. As
the doctor of the business, Robert is heavily involved in
performing the medical services required of him and for
instance with genuine low-income families, must serve as a
bridge between insurance companies, Medicaid and others,
and his patients. Saul, on the other hand, is mainly in charge
of the finances of the business extending his accounting
skills to take note of their assets, liabilities as well as income
and expenses. Saul holds much responsibility in assessing
the cash flow and income that is being generated by the
business. Together, the Smith brothers also hold a
responsibility of upholding the family practice and helping
out their local community by means of their service. Both of
them possess the obligation to give back to their community
and continue the legacy that their father left behind. The
next stakeholder would be Medicaid and their workers.
Medicaid is meant for individuals who have trouble paying
medical bills and seek help from such an organization to
make ends meet by receiving services covered at a lower
price. Once such a service is abused or profited on by the
wealthy and upper class, many of those who are lower
income might be neglected by Medicaid. Another crucial
stakeholder would be the patients of the Smith brothers who
have been availing of their services for the longest time.
These individuals may not only know Robert and Saul, yet
might possibly have even known their dad. These patients
are expected to receive the right treatment and care from
Robert. However, should things go poorly amongst the
parties involved, it would also be possible that there be
involvement of authorities: auditors, police, legislation, and
lawyers who shall be investigating their case. Although
intended to be avoided, it is possible that should the
brothers not be careful of their next step, they shall be
coming in contact with many individuals who shall give the
necessary sanctions for the fraud committed by the brothers.

II. Statement of There are numerous ethical issues involved that are morally
Problems and wrong and illegal in nature. First off, it was genuinely wrong
Objectives
for Robert to play off what he had done to Saul more so
since Saul might be the key for him to be held accountable
for his actions. Rather than being upfront and honest with
Saul about what he had been doing, he chose to pretend to
be delusional and nonchalant regarding the situation and
leave it up to Saul to fix. This might essentially be Robert's
way of inconspicuously passing the blame to Saul by means
of patronizing him to get out of the hole that he had dug for
himself. Rather than calling out for help or finding a way out
for himself, Robert chose the alternative method which was
to pull Saul down with him. Though this in itself has the
potential to ruin the relationship that the brothers had
fostered, there are much worse repercussions to the acts
committed by Robert. Next, Robert has also been lying to
Medicaid regarding the income of his patients as he
mentions that they are low-income clients to an insurance
company that seeks to provide deeds of charity to those who
are in need. In addition to this, to make matters worse,
Robert additionally bills his clients for these unclaimed
services - overcharging excessively and unfairly. Not only
does he steal money from Medicaid, yet Robert steals
money from two parties. Lastly, to document such fraudulent
activities is highly irresponsible and dangerous not just for
Robert yet for the entire family image. Once found out by an
auditor severe damage might follow them causing their
practice to collapse into ruin. With all this being said, how
can Saul carry out his brotherly role to protect Robert
from charges while restoring justice to the patients and
medicaid for the issue as an accountant of the practice?

Objectives:
1. Investigate the gravity of Saul’s actions and identify
how to help him understand that what he did was
wrong.
2. Apply transparency and several other ethical
principles in assessing how to inform, aid and
proceed in partnership with the patients and
Medicaid.
3. Determine what measures must be taken for the
Smith family’s practice moving forward in order to
maintain honest, principled and ethical business
transactions with the patients.
III. Conceptual With the objectives established, one can now proceed to
Framework evaluate the seriousness and complexity of the crisis one
layer at a time by means of a conceptual framework.
Applying the Reflective Practitioner Framework (Catholic
University of America, 1989) alongside notable Filipino
values in business, the Smith family practice can be
comprehended through three primary modes - philosophical,
interpretive, and descriptive. Each of the three modes
supplies an in-depth analysis of the evidence from the case
and answers all the questions behind the grounds all the
way to the possibilities that could be undergone by both Saul
and Robert.

https://education.catholic.edu/academics/conceptual-framew
ork/decision-making.html

First, the motive behind the crime committed by Robert

Smith is first established and understood through the
philosophical mode of thought. Although there is no
justification for committing insurance fraud, recognizing the
background that Robert has might be relevant in uncovering
the intention behind his heinous deed. For starters,
although Robert was set on a path to greatness with his
adept experience in the medical field, life had other plans for
him as circumstances rerouted his journey and forced him to
run a family practice from his hometown in Ohio. Robert was
excellent and had a lot going for him which is why he himself
must have felt robbed of the future that he believed was
destined for him. It is possible that their expectations of
Robert have been set so high that he himself believes that
earning more equates to the success that he is measured
by. Robert must have been greatly affected by the death of
his own mother and undergoing a complete trajectory shift
causing him to resort to unlawful and greatly unethical
means of earning and making income. Growing up great,
Robert must have this belief that he deserves more -
success, life, and money. Though he might be wise and
experienced with a resumé that depicts the labor and toil
that he has placed into becoming a doctor, his self-esteem
can be perceived incorrectly by many. Though pride might
get in the way of his acceptance and contentment, his
inflated sense of self gets in the way of him doing great
deeds for the community. Though he might believe that he is
good at what he does (amor propio), he is insecure about
the income that measures him and seeks more money at
any chance he gets even when it means performing illegal
deeds.

Moreover, taking the interpretive mode of assessing the

situation, how can this issue be interpreted by various
stakeholders? For the most part, Robert intended to play this
critical crisis nonchalantly as he carried a careless attitude
towards the matter, leaving the urgent matter in the hands of
his brother (concept of bahala na). Robert seemed
unaffected by the issue as he treats the problem as a trivial
matter that could be handled by Saul anytime (mañana
habit). Contrary to Robert, Saul is well aware of the
consequences that are to likely follow should Robert's crime
be found out, Saul is evidently shaken by the matter as he
intends to find a means between restoring justice and
protecting his brother. With their family name on the line,
Saul understands the issue as he already foresees the most
negative possibilities such as imprisonment and suspension
of their business. Though the patients are not aware of the
crime committed nor the money that is being taken from
them, the patients are surely going to be angry with the
brothers demanding that they would receive compensation
for the money that has been stolen from them and some
would even go as far as taking the brothers to court and
reporting them to officials for what they had done. Should
Medicaid find out about the insurance fraud, more
specifically the premium diversion, the company would most
definitely cut ties with the brothers and possibly send them
both to up to 20 years of confinement (Bukh, 2015).
However, should the Smith brothers go the correct route out
of this issue as they hold full accountability for what
happened, it is possible that the Patients involved become
 understanding of what had happened out of empathy from
all the years of service given by the Smith family (Utang na
loob) and only require that they be reimbursed and
compensated for what had happened.

Lastly, with descriptive mode, understanding the

repercussions of their actions or lack of proactivity will aid in
formulating courses of action for the brothers. At the base of
this entire issue, the secret that the brothers will desperately
attempt to keep will inevitably come out and cause them to
face more hurdles and problems than the problems that
Robert initially began with. Whether reported by a patient or
Medicaid itself, authorities will surely arrest both brothers for
their criminal deeds as soon as there is enough evidence to
cause allegations to turn into facts. Alleged stealing will
become confirmed and not only have they stripped away
cash and assets. Rather, the brothers will also be forced to
give up the family practice leaving their reputation amongst
the locals in pieces. Especially should it take less time for
the involved parties to figure it out, it is only a matter of time
until the two have no opportunity of coming clean and
admitting their own fault. In addition to this, there could also
be a build-up of tension among patients and brothers. The
brothers could feel heavily betrayed by the patients
questioning where their loyalty lies. In addition to this and
most detrimentally, there could also be a growing animosity
amongst siblings causing them to pass the blame to one
another for the rest of their lives.

IV. Alternative Course of 1. Virtue Ethics - Brother come clean, explain

Action (ACAs) Robert’s motive behind the act, express theri
STEP 7 apology and recompense those affected.

acknowledges that the ego is the enemy and centers

on cultivating virtue through practice by prioritizing
doing what one believes is charitable, honest, moral,
and benevolent. First, Saul should be able to inform
Robert of the wrong that he has done by deliberating
together on how they can break the focus on
covetousness, connect with virtue and do what is
good. Both brothers personally unveil to the patients
concerned about what they had done and elucidate
the circumstance behind the behavior, exhibiting
genuine remorse for their transgressions as they
guarantee that those who have lost will be refunded.
This shall lead to humility and transformation on the
brothers' part as not only will actualization lead to a
more eminent emphasis on accomplishing their job
for the community, yet they also retain their patients
 and continue the practice more transparently moving
forward. Though they both don't go to prison, Saul
and Robert must pay back the clients causing them
to lose assets, never disclose to Medicaid regarding
the insurance fraud, and must continually work to
make up for what they had done through additional
works of charity (offering discounts, providing
extensive care to the clients whom they have
wronged to gain back their trust).

2. Utilitarianism - Robert and Saul keep the money,

don’t divulge anything to their patients, and
move forward from the incident learning from
their mistake.

The second choice would be Utilitarianism which

focuses on the maximization of the well-being of all
parties involved. Should they select this route, Saul
and Robert are to keep their crime completely secret
from their patients and Medicaid as Saul must work
to attempt to modify and adjust their financial
statements for the time being, yet move forward with
heavy precaution and recognition that what Robert
has done cannot be reprised. The greatest benefit of
this case is how they can continue with their practice,
retaining all the loyal patients and the money, and
the fact that the brothers are on good terms with one
another and are not imprisoned (as of the moment).
However, Saul and Robert shall not fully understand
the depth of what they had done nor will they show
enough remorse because they chose to not confront
the mistakes that they have made. The greatest of all
of this would be the fact that they run the risk of
being found out by the patients or Medicaid which
gambles their freedom, practice, and relationship
with one another causing Saul to be restlessly
paranoid and unsettled at this fact.

3. Deontology - Saul sends Robert to jail out of duty

to the law. Potential falling out of practice and
damaging his relationship with all parties
involved.

The last route that can be taken would be deontology

which bases moral judgment on using rules to
distinguish right from wrong. In this possibility, Saul
complies with the law and either forces Robert to turn
himself in or reports Robert himself to the officials for
the insurance fraud that he has committed. Though
Saul might be safe from this as he turns in his own
 brother, there are numerous downsides to this choice
should it be taken. First and foremost, he completely
damages his relationship with his brother as he does
not do much to protect him from imprisonment and
does not have any opportunity for a resolution
between the brothers to change their practices. Apart
from just performing this choice out of duty rather
than cognizance, the patients are also potentially
going to have to search for other doctors in Zoar
resulting in a loss of many assets, family practice,
and the ruin of the family's reputation.

V. Recommend Though what Robert has done is immensely grave and

unethical, he must owe up to his past mistakes and exhibit
transparency with the patients that have been under their
care for the longest time. Robert might feel as though he
himself had been robbed of opportunities and he should be
able to settle these feelings that he has by means of
speaking to Saul about his struggles and measuring his
success, not through monetary means, but rather by seeking
to be more generous and a steward to his community.
Fighting battles alone as Robert has been doing is not an
excuse for doing more wrong in the world. Rather it is time
that Saul also extends a helping hand to his brother by being
there to get him through this tough spot in his life. This
means that Saul calls Robert out and truly listens to the
underlying personal issues that exist in him (insecurity, grief,
pride). Robert should build his life on a foundation of trust -
both in the lord and in his brother. Once their brotherhood is
established, they can unite with one another to face the
consequences of Robert's actions together. This means
gathering or opening transparent conversations with the
patients about what had happened and giving them concrete
solutions as to how they can proceed with this together. In
this discussion, they admit that they recognize that stealing
and bearing false witness (commandments 8 and 9) are
immoral and that they have regressed from their old ways.
The brothers must then mention their plan of action to each
of the clients involved, opening themselves to criticism,
complaints, comments, and suggestions. As they start their
venture to change the way they have done business, the
Smith brothers' new goal is to run a practice that involves
complete transparency, accountability, and stewardship and
constantly work on such within a 6-month time frame as they
continue to do business. Robert and Saul shall accomplish
this by hiring external accountants yearly to review financial
statements and audit their transactions, Saul creating a
system or website that shall offer patients a full record of
their medical history including payments, visits, insurance,
 and the like and Robert to create opportunities and
occasions where he performs his services for his patients for
free, especially for those who are low income. Recognizing
that recovering from what had been done requires the
re-establishment of trust in the community, Robert must
begin to show great remorse for what he did and pay the
stolen amount from his pocket. Hoping for sympathy and
teamwork, Robert should start exhibiting Bayanihan as he
applies his extensive background in medicine to not just
participate yet innovate the medical services offered in his
town of Zoar Ohio. This means giving discounts to his
long-time patients (suki system) and inviting over old
acquaintances from his fellowship to join his body of work in
Ohio as they offer a greater range of services. Saul on the
other hand shall begin making or collaborating with a
professional to create a systematic means of organizing
patient files that are constantly accessible to not just the
brothers, yet also the patients themselves. Here, they can
be made aware of what they are being billed for, pending
payments, future appointments, and (if applicable) a general
and comprehensive guide as to the healthcare that they are
receiving. Accomplishing this will not only continue to make
the brothers profit but rather instill deeper and more
profound ideologies that shall allow them to attain success
by means of greater sources of fulfillment. More than
anything, though difficult times may not excuse unethical
behavior, it is relevant that a family and a community stand
by one another when this happens. Recognizing the root
cause is half the battle as the brothers learn their lessons
through their actions. Only time shall prove if the brothers
really are remorseful for what they have done. Yet, in time,
pride or monetary success will not be Robert's priority in his
practice, rather establish more meaningful relationships with
his patients and seek contentment and purpose as he learns
to trust that though life had different plans, the path he is on
and the path he has chosen for himself is a path that he is
grateful to be on.

VI. References
Asset diversion. New York Criminal Attorney: NY
Criminal Defense - Bukh Law Firm. (2016, September
16). Retrieved February 23, 2023, from
https://nyccriminallawyer.com/fraud-charge/insurance-f
raud/asset-diversion/

Hursthouse, R., & Pettigrove, G. (2022, October 11).

Virtue ethics. Stanford Encyclopedia of Philosophy.
Retrieved February 23, 2023, from
https://plato.stanford.edu/entries/ethics-virtue/
Radford University Core Handbook. (2020, October
30). Deontology: Strengths & weaknesses. PHI220
Ethics and Society. Retrieved February 23, 2023, from
https://viva.pressbooks.pub/phi220ethics/chapter/deon
tology-pros-cons/#:~:text=27%20Deontology%3A%20
Strengths%20%26%20Weaknesses&text=Recall%20t
hat%3A,is%20ethical%20based%20on%20outcomes.

University, C. (n.d.). Conceptual Framework Decision

making. The Catholic University of America. Retrieved
February 23, 2023, from
https://education.catholic.edu/academics/conceptual-fr
amework/decision-making.html