60% of dentists are embezzled

Embezzlement Red Flags You Should Not Ignore

IT’S A FACT, DENTISTRY IS ONE THE MOST EMBEZZLED PROFESSIONS.

Virtually every dentist can name at least one other dentist they know who was embezzled by a former employee.  That’s not surprising news, when you consider that 60% dentists have reported embezzlement during their career, and this does not include the dentists who were embezzled and chose to remain silent or sweep it under the rug.

The people who embezzle from a dental practice fall into two groups. The largest group is comprised of first-time offenders. These are the people who never intended to steal when they were first hired. They have no prior criminal history and tend to lead relatively blameless lives. Most often, they appear as hardworking, loyal employees. They typically work in the practice for several or more when something happens in their personal life that creates intense pressure for money, which motivates them to steal. From experience, I estimate 80% of dental embezzlers are in the first-time offenders’ group and most do not go on to reoffend.

Conversely, 20% of dental embezzlers have on the job experience stealing from a previous employer. They have an established history of dishonesty and unethical conduct. These are the serial embezzlers.

Serial embezzlers begin stealing soon after they are hired. They have a tendency to steal with such frequency and magnitude that the practice owner soon becomes suspicious. Serial embezzlement symptoms are acute and intense. Serial embezzlers are typically employed by each practice for less than one year.

EMBEZZLEMENT STARTS WITH THE HIRING PROCESS.

HR professionals say that 60% of people lie on their resume. These are mostly “white lies” where the job applicant will overstate a skill, change an old job title to make it sound more important, or omit information that may appear unfavorable.  Some job applicants will fabricate credentials and create a fictitious work history to gain employment.

During the hiring process, it is impossible to predict whether a job applicant with excellent credentials and an unblemished past, will begin to steal from the practice in a few short years. We do not have a crystal ball for this scenario.

On the other hand, dentists can keep serial embezzlers and those with a checkered past out of their practice by conducting basic pre-employment diligence.  I’ve outlined the steps to follow in my pre-employment checklist which can be download from resource pages at the end of this article.

THE EMBEZZLER’S DILEMMA

Embezzlers are creative when conjuring up different ways to hide stealing from their employer. They will create plausible lies to cover their tracks and create the illusion that everything is in balance.  If an owner starts asking questions about an account or a payment, the embezzler will create fictitious or alternate scenarios to explain things.  When they are at work, they remain “on constant alert” of being caught, which causes them to exhibit behaviors associated with their fraudulent conduct.

These are called red flags behaviors, and they are an indicator that fraud may be present; but they do not always guarantee its presence.  There may be an innocent explanation to explain the red flags, but it can also point toward something more sinister. Recognizing these red flags can help practice owners detect embezzlement in its early stage, before it gets out of control.

Among the twenty-six red flags identified by my online assessment, the Top Six red flags have special importance because in 85% of reported embezzlement cases, at least one of the top six red flags was present, and in 95% of cases, two or more red flags were present.

HERE ARE THE TOP SIX RED FLAGS

Lifestyle: Be aware of employees that display a living standard disproportionate to their income.

Money Problems: Look out for employees with visible money problems. These employees may comment or complain about “never having enough money”. The cause of their money problems may be visible or hidden. Some may get collection calls while at work, others have large medical bills, or a spouse who lost their job.

Control Issues: Be aware of an employee who spends a lot of time alone in the office by staying late or coming in early. Many dishonest employees will refuse to take vacation or refuse to stay at home when they are sick. Watch for an employee who is unreasonably resistant to change, and objects to changes in practice management software, bookkeeping, accounting services, merchant service providers, or other services.

Irritability: Watch out for employees that are “jumpy” whenever someone tries to help them with their duties. Dishonest employees will resist the involvement of others in their work and are often slow to respond to routine requests for information. The report that you asked for today may not show up on your desk until tomorrow and often become annoyed when you ask reasonable questions about financial transactions or dental insurance claims.

Wheeler Dealer:  Be aware of employees who exhibit “wheeler-dealer” behavior, such as cutting corners with patient or dental insurance charges. Most wheeler dealers will exhibit a false sense of entitlement and ingratiate themselves with others for their own gain.

Divorce and Debt: divorce can cause loss of a second income and financial hardship. other financial pressures can include a family member who is in trouble with the law, large medical expenses, or a gambling addiction.

Remember, embezzlers will work very hard make you believe they are “on top of things” because this contrived appearance is essential to maintain the bond of trust that allows them to continue stealing.

ADDITIONAL RESOURCES FOR DENTISTS AND PRACTICE OWNERS

This article has briefly described six of the behavioral red flags signals that every practice owner should know, however it doesn’t address the questions asked by dentists when they suspect or confront embezzlement. Questions such as:

• She took all the passwords, what can I do?
• Can I fire my employee for stealing?
• How will this affect my practice and my patients.
• Can I get my money back?
• Should I contact police?
• Should I call an attorney?

You can find the answers to these questions and many more on the Dental FraudBusters blog website here: https://www.dentalfraudbusters.com/fraudbuster-tips/

Dentists can check their practice for 26 red flags by taking my online anonymous assessment. Yes, you read that correctly, the assessment is anonymous.  To learn more or to take the assessment, visit this page: https://www.dentalfraudbusters.com/dental-embezzlement-red-flag-assessment/

Do you want to learn how Keep people with a checkered past from gaining employment in your practice? Just follow the steps in my pre-employment checklist; you can download a copy here: https://www.dentalfraudbusters.com/serial-dental-embezzlers/

If you are a dentist who is currently contemplating or involved in a litigation matter and want to learn more about how digital forensics can help to resolve disputes, visit Hiltz & Associates here: https://www.hiltzandassociates.com/expert-witness-for-dental-attorneys/

About the Author: William Hiltz

William Hiltz is the CEO of Hiltz & Associates, and the curator of Dental FraudBusters.

Bill has over 20 years’ experience working exclusively for dentists in matters related to fraud, embezzlement, risk, and compliance.  Bill’s services include digital forensics and data analytics for dentists involved in unethical business disputes or malpractice lawsuits.

Contact: https://www.hiltzandassociates.com/home/contact-us/