What Dental Practice Embezzlers and Houdini have in Common


Harry Houdini was probably the most famous magician of all time.  His daring escapes included the “Water Torture Cell” (where he was manacled and suspended upside down in what amounted to an oversized aquarium), and the “Overboard Box Escape,” where he was locked in a wooden packing crate that was lowered into the water.

While many who watched Houdini’s daring escapes probably believed that he had supernatural powers, Houdini was a master illusionist.  Since many of his stunts were performed in full view of his audience, he relied on two key elements to perform the impossible.  First, he was dependent on cleverly constructed props.  However, his true genius was mastering the art of misdirection — getting his audience to focus on his hands while he was doing something with his feet, for example.

Although embezzlers in your office do not stand in the spotlight in the same way that Harry Houdini did, they rely on the same two things.  Like Houdini, they have clever props (often taking the form of adulterated reports on which the embezzler has worked their “magic”). They carefully plan their crime so that the day-end report from your software correlates to the (somewhat diminished) bank deposit.  They can conjure up falsified walk-out statements to give to patients.  With a wave of their magic wands, they create “adjusted” insurance claims that overbill insurance companies.  And like Houdini, this is all performed more or less under your nose.

A busy dental office is an excellent place to introduce some distractions, and embezzlers become adept at encouraging you to see what they want you to see.  Their sleight of hand may include giving you partial reports, providing your reports late, and “selective reporting” where certain providers or procedure codes are suppressed

Houdini’s life ended prematurely, but not because of one of his highly dangerous magic tricks going wrong.  He died of accidental causes — complications from a ruptured appendix did him in.  Similarly, dental office embezzlers normally get caught by some accidental event; the systems and policies that doctors put in place account for the discovery of only about 20% of embezzlement.  The remainder is unearthed as a result of some chance occurrence that was unforeseen by both the embezzler and the dentist.

But here the similarity ends — Houdini was a hero to millions.  He accomplished a lot in his life in addition to magic.  He wrote nine books, acted in movies, and was an aviation pioneer.  He also worked hard to expose magicians who claimed to have divine powers.  Most dental office embezzlers accomplish nothing more than aggressively spending their loot, spending time in jail, and possibly victimizing unaware employers in the future.

So how do you see through the “magic”?  First, you need to know where to look. Our “How To Beat Embezzlers” series gives some excellent and practical advice for monitoring your practice.  Second, employee behavior is the best indicator that someone is performing “magic tricks.”  All of these things are affordably priced on our web store at www.dentalembezzlement.com/store.

Do you think someone is playing “magic tricks” in your office?  We can help.  Call us at 888-398-2327.

Former New Hampshire Employee Accused of Dental Office Embezzlement

leslie brown
Leslie Brown

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Columbia Dental is warning other businesses about the dangers of falling victim to fraud at the hands of a trusted employee.

The company says it lost more than $60,000 when a former employee, Leslie Brown, deposited about 42 of its insurance payment checks into her own account.

Brown was arrested in November on a felony larceny charge, according to police.

Court documents show Brown used the ATM at the Citizens Bank on Broad Street in Manchester to deposit those checks into two personal accounts.

“She was extremely smart in terms of how she did it. It certainly fooled us. It certainly seemed to have fooled the bank as they accepted the money and allowed her to use the money,” said Jeffery Smith, general manager of Columbia Dental.

The fraud occurred over a five-month period starting late last year, according to the documents.

“We don’t have a motive as far as why she needed that money but obviously it’s a substantial amount of money,” said Manchester police Capt. Chris Davis.

Brown was able to cash the checks by stamping “Columbia Dental” on the backs and writing “Pay to the order of Leslie Brown” underneath the stamp, according to court documents.

The bank cleared the the checks even though they were actually written to “Columbia Oral Maxillofacial Imaging,” court documents say.

Smith said Brown credited all patient accounts so the company never caught on.

While Citizens Bank eventually detected the fraud, Smith says it has not refunded any money. Columbia Dental is now suing the bank in an effort to recover the cash.

“We wrote the bank, we wrote the board of directors trying to get some resolution and we heard nothing back,” said Smith.

Court records show Brown has prior identity theft and larceny convictions. Columbia Dental said it was in the dark about her background when hiring her.

Brown has since been fired.

“The bottom line is that be careful where your checks are going and keep a good accounting of them,” said Smith.

Citizens Bank released a statement addressing the incident.

“When we detect instances of potential fraud, we work closely with the affected party and with law enforcement to investigate and address the issue. We also encourage account holders to regularly monitor their accounts for signs of suspicious activity,” the statement says.

Columbia Dental said it has made a number of changes to its policies to keep something like this from happening again.

Leslie Brown is due back in court next month.


Content retrieved from Former Employee Accused of Dental Office Embezzlement | NBC Connecticut http://www.nbcconnecticut.com/news/local/Former-Employee-Accused-of-Dental-Office-Embezzlement-286022881.html#ixzz4BYKaHdIq


Misinformation about Embezzlement

Unfortunately, one of those pesky business matters affecting many dentists is embezzlement.  Published statistics suggest that three in five dentists will be victimized by an embezzler in their careers.
Unfortunately, there is a lot of misinformation about how best to manage this problem.  Many well-intentioned advisors suggest that if the dentist simply checks more (or different) things each month, they will be able to detect embezzlement.
I recently made this response to a consultant who was advocating a checklist of things for a dentist to do or check monthly (I stopped counting at 80 items on the list):

“Respectfully, I think you are going at this in the wrong way.

I don’t have a specific objection to anything on this (very lengthy) list.  However, I do object strongly to the underlying philosophy, which is to suggest that the way to control embezzlement in a dental office is to turn the dentist into an untrained, under-equipped, part-time auditor.
Most dentists I know, when given a list of this length, will simply throw up their hands and ignore the list.  I haven’t tried to calculate the time that performing all tasks on this list would take, but I bet that it is 25 hours or more monthly.  Since the number of hours in a week is constant, this time would come either from clinical or family time, and both have considerable value.
The other problem with the “dentist as auditor” concept is that it ignores the adaptability of embezzlers.  Most successful embezzlers in dental offices are long-term employees.  Their seniority means that they know their doctor well, including what he or she looks at on a monthly basis (and more importantly, what is not scrutinized).  It is then simply a matter of finding a way to steal that is outside the dentist’s scrutiny.  If you start looking at more, or different, items the thief simply switches methodologies and carries on stealing.  Ultimately, there are fraud methodologies that NO system of controls and checks can stop.
Monitoring for fraud is actually far easier than most dentists and consultants think.  Regardless of the specific embezzlement methodologies being employed, the behavior of thieves is remarkably predictable.  Embezzlers want to control communication in their offices, do not want to take a vacation, resist upgrades or changes to practice management software, etc.  If dentists can learn to identify behaviors consistent with embezzlement, they can quickly realize when it is happening.  A benefit of the behavior-based detection approach is that it requires way less time than trying to self-audit, which means that it is far more likely that a dentist will do what is necessary.”

We have developed a scored behavior analysis checklist which is available in our electronic store at www.dentalembezzlement.com/store.

I’ve Heard That If I Suspect Embezzlement, Stealth Is Important. Why?

When an embezzler thinks that he or she is about to be discovered (and possibly go to jail, have their friends read about them in the newspaper, have their spouse find out about their illegal activities, etc.), their thoughts turn to self-preservation.  This is a very powerful emotion, and anyone who has ever taken lifeguarding training is well aware of the danger of getting too close to someone who believes that they are in danger.
We have seen many instances of destroyed hard drives, missing backup media and in a couple of extreme cases, arson and murder committed by dental office embezzlers attempting to cover their tracks.  (read about here — https://www.prosperident.com/2016/07/05/assistants-life-…tal-baltimoresun/ )
Although such efforts normally end badly for the embezzler, the dangers they pose for dentists are considerable.   When we say that embezzlement investigation is a job for professionals, this is one of the reasons why.  Prosperident has expended considerable effort perfecting the ability to conduct stealthy investigations to protect you from these issues.
If you want to discuss your situation in confidence, we are happy to speak with you.  You can call us at 888-398-2327 , send an email to our embezzlement hotline, which is checked daily by our on-duty investigator at emergency@dentalembezzlement.com, or chat with us using the “chat” button that should be visible in the lower right corner of your screen.   We will get back to you as quickly as we can, normally within 24 hours.

Ten Things You Might Not Know About Prosperident

Sometimes we make the mistake of assuming that everyone knows who we are and what we do.  Here are some things you might not know.
1.  The company was founded in 1989, by David Harris
2.  David got drawn into the dental embezzlement world by accident.  Once he found himself there, his investigative skills and amazing ability to think like a criminal quickly established him as the “top gun” of embezzlement investigation for dentists.
3.  Prosperident only assists dentists.  We do not investigate in other businesses, nor do we work for dental insurance companies, the IRS, etc.
4.  We work with all dental specialties and have specialized groups to deal with embezzlement in oral surgery and orthodontic practices.  Our Special Investigations” group deals with some of our more unusual cases.
5.  Our dozen investigators all had extensive dental backgrounds before they started training to be Prosperident fraud examiners.  Half have completed their Certified Fraud Examiner (CFE) designation, which is the “gold standard” of fraud examination.
6.  Our examinations are completely stealthy — no one but you will know that we are involved.  Normally, our investigations are done remotely and without a (probably conspicuous) visit to your office.
7.  We do a lot of speaking, and five members of our team are accomplished speakers.  In a typical year, we do 60 or more speaking engagements — everything from big meetings like the Hinman and Chicago Midwinter to local study clubs.
8.  We offer three products — Diagnostic Examination(for when a dentist wants to know if he or she is being embezzled), Forensic Investigation (for when embezzlement has been confirmed), and Office Protection System, which is a preventative product designed to minimize the probability and impact of future embezzlement.
9.  The most popular section of our website is the Hall of Shame, where we profile over 550 embezzlers.  It’s a great place to look before hiring someone — check it out here.
10.  Our favorite color is blue 🙂

The Cost of Inaction

Two years ago, I set a goal for Prosperident of increasing the knowledge level of dentists and those who advise dentists about embezzlement.
Overall I think we have done a good job of increasing awareness.  Prosperident’s other speakers and I have given hundreds of presentations and have logged thousands of travel miles.  Our articles have appeared in every major dental publication in North America.  Google search the word “Prosperident,” and you will see the extent of the information that we have put in front of the dental community.
And yet, occasionally, something happens that causes me to question our effectiveness at getting the word out.  Last week I had two encounters with dentists that caused me to question our effectiveness at getting the word out.
First, I got a call from a dentist.  As this dentist described his situation, it became clear that embezzlement was very likely happening, given the suspect’s behavior.  We were retained and began our intake process.  The dentist contacted us two days later to say that he was discontinuing the investigation, and the reason was that there was a labor shortage in the area of the practice.  In other words, that it was better to keep an employee who was stealing from the dentist than trying to find another one.  I couldn’t believe my ears.
A few days later, I got a call from another dentist.  One of this dentist’s staff had taken the scrap gold in the office, sold it, and kept the proceeds.  The question that this dentist was calling to ask me was whether the employee should be fired.  While the amount involved was fairly small, the answer to this question seemed so obvious to me that I’m still having trouble believing that it had to be asked.
What concerned me about both of these incidents is the apparent willingness of the dentists involved to tolerate some level of dishonesty on the part of an employee.
Let me make this simple — there should be ZERO tolerance for dishonesty from your staff.  Someone who will sell a few hundred dollars of your gold is obviously over the ethical hurdle that employees must cross before they steal, so it is only a matter of time before this evolves into a more direct (and monetarily significant) form of stealing. And the dentist who suddenly decided that a local labor shortage existed had obviously bought into the idea that the suspect is completely indispensable to the practice.
The costs of inaction can include severe financial damage.  It also consigns the dentists to “long-term uncertainty” — wondering what these employees are up to will continue for as long as they continue to work in these practices.

The Mind of the Embezzler

I’ve often said that our embezzlers fall neatly into two categories, which I labeled the “Needy” and the “Greedy.”  The Needy are exactly what you expect; some life event has made their finances unworkable, and they are stealing to preserve the basics of life.  Some of the events that might prompt this include an addiction, a spouse losing his or her job, or a divorce.  Stealing is done because the thief feels that they have exhausted their other options.
The Greedy are a bit different (and fascinating — I keep threatening to write a book about them — perhaps this column is the start :-).  These people steal to scratch an emotional itch, not a financial one.  We are completing an investigation now where the thief won a seven-figure lottery prize, and after winning the money– get this — kept stealing.  These thieves get some kind of “endorphin rush” when they steal, and it becomes addictive.
The Greedy thieves I have met are smart people and, in many cases, are close to being the intellectual peers of the dentists for whom they work.  I think that at some level they resentfully compare your wealth and status to their own, and decide to address the inequity that they perceive.
In contrast to the Needy, Greedy thieves tend to flaunt their “winnings.”  We have seen everything from top-end BMWs to boats to membership in the “Shoe of the Month Club” bought with YOUR money.
The good news is that our extremely popular Embezzlement Risk Assessment Questionnaire is excellent at ferreting out these thieves.  The Questionnaire provides a systematic way of capturing and evaluating the behaviors that are characteristic of embezzlement.

Things NOT to do if you suspect embezzlement in your office:

  • Start asking unusual questions of staff
  • Ask for reports you haven’t requested before
  • Spend lots of time in your private office on the phone with your CPA
  • Allow a couple of geeky looking people with briefcases to come to your office to look at stuff
  • Implement additional security features in your software
  • Start posting articles about embezzlement in other offices on your staff room bulletin board
  • Run around flapping your wings like a chicken

If someone is embezzling from you, they are constantly looking for signs that they are about to get caught.  When a thief observes these signs, their thoughts turn to self-preservation, which includes things like destroying evidence.  “Evidence” for this purpose usually includes your practice’s financial and clinical records.

Unfortunately, many dentists have learned the hard way about the dangers resulting from alerting a suspect prematurely.  If you have concerns about embezzlement, we recommend using our “Panic List of dos and don’ts that is available on our web store at www.dentalembezzlement.com/store and getting immediate professional assistance.

The Power of Nature … And Embezzlement

Prosperident had a visitor on the weekend — Hurricane Arthur traveled up the East Coast and walloped us on Saturday.  Fortunately, our extensive computer infrastructure didn’t miss a beat and remained in full operation throughout the storm.  Others weren’t so lucky.  At the peak, 140,000 Nova Scotia households were without electricity, and as I write this (two beautiful sunny days after Arthur hit) there are still about 30,000 households more-or-less patiently waiting for power.
Interesting, but what does this have to do with embezzlement, you might ask?  The sheer power of nature is, at different times, wondrous and frightening.  While the determination and ingenuity of a motivated embezzler will not knock down trees or cause boats to sink, measured against the scale of human emotions it ranks somewhere between a tropical storm and a hurricane.
And kind of like the people in the picture by the rocks at Peggy’s Cove who have placed themselves in (possibly mortal) danger by underestimating nature’s power, underestimating embezzlers is also perilous.
I encourage you to take advantage of the summer months to give careful thought to whether anyone in your office is demonstrating embezzlement-like behavior.  The Association of Certified Fraud Examiners recently released its 2014 Report to the Nations, which gave some very interesting statistics — over 90% of embezzlers displayed at least one such behavior, and over 60% presented two or more behaviors consistent with embezzlement. 

When Dentists Behave Badly

Do Dentists Embezzle?  
By David Harris  

I think everyone reading this newsletter is aware of the shockingly high probability of a dentist being embezzled in his or her career.  Published statistics put that probability at three in five dentists, but because some embezzlement goes unreported and some is never detected, the true probability is likely about 80%.  

It is tempting to attribute this pandemic to the necessity to have employees, with those employees being generally less educated and having a less developed sense of ethics than the dentist.  By this logic, while it is quite possible to be victimized by staff, it is unimaginable that another member of the dental fraternity would steal.  

This reasoning is doubly flawed.  First, the overwhelming majority of dental team members share the altruism and integrity that most dentists bring to their profession, and the embezzlement statistics are a result of the actions of a very small proportion of dental staff.  And second, one dentist stealing from another in a group practice context is something that we encounter with some regularity.  We usually have four or five active investigations of this type in progress.  While this is a small proportion of our total investigations, we need to bear in mind that the number of multi-dentist practices where this “fratricide” can happen is relatively small also.  

What I want to establish is that the causes of embezzlement are not as simple as modest economic circumstances and underdeveloped ethics.  Most of our dentist-embezzlers are already reasonably well off, and it is clear to me that they understand the ethical transgressions they are making.  

So why do they do it?  

Sometimes the embezzlers feel that the dentist they are victimizing has somehow wronged them in the past, and they are (using a very twisted concept of fairness) attempting to right this historical wrong.  In other situations, I believe they get some kind of biochemical thrill from successfully stealing (analogous, I guess, to the celebrity shoplifters we sometimes read about in the news who steal a $10 item from a store while earning millions of dollars).  And the dental education and licensing processes are probably far better at weeding out the undexterous and unintelligent than the sociopaths.  

If you are not in a group practice, at this point, you are probably questioning the relevance of this discussion to you.  It’s actually pretty direct.  Embezzlers who happen to be dentists are bestowed a huge advantage by their victims.  Because their actions are “inconceivable” (and I’m now quoting many of the victims), the perpetrator receives far less skepticism from the victim than he or she should.  

Regardless of your practice situation, an easy way to make yourself vulnerable is to decide that it is inconceivable that a certain person will steal from you.  Unfortunately, we have seen far too many of these “inconceivables.”  In addition to the classic cases of the trusted long-term employee, we have also seen embezzlement committed by siblings of the dentist, children, and even spouses.  

I’m not suggesting an ongoing hunt for embezzlers the way Sen. McCarthy once hunted for communists; simply that deciding that anyone is “above suspicion” is exactly the enabler that they need, if they are so inclined.  We just can’t completely rule out the possibility of someone being a thief.  Whether you practice solo or in a group, some amount of skepticism is a healthy thing.