Whenever I post or share articles, the articles that seem to draw the most viewers are about "fraud". Not surprising, since more than 60% of dentists will experience some type of embezzlement in their practice at one time or another.
Experts give many red flags found in the personality traits of an employee who would steal. The criminal thought process is very intriguing.
Being a hygienist for over three decades, I have witnessed many of these traits in action. So "who" is likely to steal from you?
Most employees who commit fraud, experts say, have been with the practice at least 5-8 years. During my career, I have experienced these traits in co-workers in at least six different occasions when there was possible fraud. All were office managers, considered valuable employees, and had been with the office for more than 8 years.
I am going to share some experiences I had with three of them, who fit into the different red flag categories that the experts have listed. We will call these office managers Betty, Liz, and Gretchen.
They tend to work excessive hours, many times without pay.
Early in my career, I worked in an office where the office manager, Betty, would always leave after everyone else had gone. This was before time clocks were popular. It a was later found out by accident, that she was padding her hours, among other things.
Later in my career, both office managers, Liz and Gretchen (in two different offices) would always stay late. Liz would sometimes stay until 7:00 at night when the office closed at 5:00 pm. Gretchen was the first one in the office and the last to one to leave. Neither one was paid hourly and both at one time had been accused of fraud.
They are super dedicated and promote themselves as having high integrity standards.
Betty would always run errands for the office on her free time. She would go to the post office, the bank, and pay bills in person for the office. She would brag about what a dedicated employee she was. It was later discovered that she was including some of her own bills in with the payments.
Gretchen would often tell the staff stories about a former career in management for a large company. She was in charge of hiring and training new staff. One of her stories was about a young woman she had hired with whom she was on a business trip with. The young woman was packing the hotel hangers in her suitcase. Gretchen stated that she fired her on the spot because she does not tolerate any dishonesty. Gretchen was also caught embezzling and was on probation for many years.
They tend to be controlling.
Gretchen was very possessive over the front office computers. This was before a whole office would have computers and have implemented a software program like Dentrix.
It became real apparent how controlling Gretchen was when she was interviewing a prospective hygienist for employment. The interview seemed to be going extremely well. However, when the hygienist stated that she was very familiar with the software program the front office was using, the interview ended abruptly and that hygienist (who was very qualified, I might add) was not hired.
Liz, had a major surgery scheduled, where she would be out of the office for at least six weeks. She did not let anyone in the office know, including the doctor, until the night before. She also informed the doctor that she had lined up her friend to take over her duties for that time period. Everyone seem to think her actions where a little bold, but never questioned it.
Usually have financial difficulties.
Betty had a husband who was in an out of work often. They were always behind on their bills.
Gretchen was a widow who had many debts from her deceased husbands illness.
Liz was divorced, in poor health and had many medical expenses.
Betty use to shop often and the staff would joke about her "shopping addictions".
Gretchen would spend most weekends at the casino, gambling.
Liz, along with being a heavy shopper, was very knowledgeable about pain medications and on many of them.
They resist change
When a part time employee was hired that could also help with the books and paying bills, Betty moved on to another job.
Gretchen moved on quickly when the doctor had computers put in the operatories, Dentrix implemented and the whole staff trained. She actually didn't even wait until the training was finished before leaving.
Whenever the doctor would change an office system, Liz would be stubborn, have a hard time understanding, and frustrate everyone until the doctor would give up and go back to the previous method.
So what would really be the point in sharing some of these stories. After all, there are many good employees out there and no one is perfect. Just because someone might have a few of these traits does not mean that they would steal from you.
However, these are the traits most embezzlers have in common and something to be aware of. From my experience, the doctor usually didn't think that it could happen to him. One doctor I worked for had actually hired someone who had been found guilty of stealing from another office and was still on probation.
Another surprising statistic from the experts, is that only 21% of fraud cases in dentistry are ever prosecuted. One reason stated is that the dentist sometimes has too much pride and doesn't want his colleagues or family to know.
So, in summary, knowledge and awareness are important. I have written another blog about what you should look for in your accounts payable to detect fraud. This too can be helpful.
Can you totally prevent or stop it? According to David Harris, CFE, CPA who is an expert in fraud investigation, there is nothing a dentist can do to prevent fraud. He states that, "Most embezzlement in dental offices takes place because a staff member has decided that the best solution to their financial problem involves stealing from their employer."
The dentist can, however, detect fraud early by, again, being aware and being knowledgeable on the subject. Internal controls being set up are also important. I believe it is better to have an outside bookkeeper, who does not have access to your funds, as another pair of watchful eyes.
The experts also recommend that you do not try to handle suspected fraud in your office on your own. They recommended calling an expert right away before sharing your suspicions with anyone. Evidence can easily be destroyed if the perpetrator suspects you are on to them.
If you just have some concerns about setting things up properly for internal control or maybe need an outside bookkeeper, please contact Annette at BookkeepingAesthetics@ gmail.com. You can set up a consultation at no charge and I will answer any questions you might have. I hope you have enjoyed this article and can take something from it that will help your practice.
Everything You Need to Know About Dental Office Fraud
By David Harris B. Comm
MBA, CMA, FICB, CD, TEP
Licensed Private investigator