Prosperident Pulse #106 May 2021

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May 2021

Webinars
Did you know that Prosperident puts on a free webinar every month?
The theme for our Spring webinars is How to Outsmart Embezzlers.
Our next webinar takes place on May 20 at 8:00 pm Eastern / 5:00 Pacific, titled Master Your Practice’s Finances.
Registration is available HERE, and PACE CE is offered.
Want a Great Speaker for Your Event?
In a non-Covid year, Prosperident speakers present 70 or more times annually.
Here are some of the places we are speaking soon:
Jun 6-7
Cleardent Virtual Event
Toronto, ON
Jun 11 Atlantic Virtual Dental Conference Halifax NS
Sep 9 Smile Source Exchange Las Vegas NV
Sep 16 Seattle Study Club Austin TX
Sep 25 Canadian Association of Dental Consultants Toronto, ON
Oct 19 Compre-hensive Care Club Port Huron MI
2022

Feb 26 Chicago Midwinter Meeting Chicago IL
May 6 Ontario Dental Association Toronto ON
If you would like to book a Prosperident speaker for your event, please give us a call or use THIS LINK.
Did you miss a previous newsletter? We archive them HERE.

I’m a New Practice Owner. What Should I be Doing to Protect My Practice?
That is an excellent question.
Embezzlement protection involves a few big steps and a lot of small items. For this post, let’s address the big items.
They are proper hiring, financial monitoring, and creating a climate where an employee with suspicions about a co-worker will feel comfortable coming forward.

Hiring

Most dentists know far less about the people they hire than they should. When we say the words “background check” to many dentists, what they hear is…
Something to Talk About…
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Each generation has its defining event. For my grandparents, it was World War II. My parents experience was the Cold War and the assassination of President Kennedy.

Until last year, I had always thought that the events of Sept 11, 2001 would be my generation’s seminal moment. I was wrong about that.

When COVID first became headline news over a year ago, most of us probably thought that the disruption would last for at most a couple of months and that the sudden shortage of toilet paper was the most newsworthy event. We were wrong about that too.

With vaccines finally beginning to win the sometimes-deadly race against virus mutations, we can now take a deeper look at the virus’s impact on the world and on dentistry.

In 2020, economic activity in the US suffered its worst decline since 1946. Unemployment, which stood at 3.5% pre-Covid, peaked at 14% and is still double what it was last February.

Dentistry has had to adapt in small and big ways to keep patients and staff safe and demonstrate that safety to sometimes fearful patients.

And yet there are silver linings. The ADA has reported that in 2020, dentists managed to achieve 83% of 2019 revenue. Considering the enforced shutdown that most practices experienced, the overall economic decline, and various other challenges, 83% is a remarkable accomplishment.

My friend, well-known dental consultant Kirk Behrendt, says that dentists are currently in a one-time period of opportunity. Where does this opportunity come from? It is everything from pandemic-deferred dental work to increased availability of staff to real estate opportunities created by employers downsizing due to staff working from home.

I hope that you are looking for, and finding, the chances to improve your practice. As always, please know that you can obtain help and support from us. If you want to speak with me about your practice, you can book a time HERE.


Yours truly,

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David Harris
We are Prosperident, Dentistry’s Embezzlement Experts
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I’m a New Practice Owner. What Should I be Doing to Protect My Practice?

That is an excellent question.

Embezzlement protection involves a few big steps and a lot of small items.  For this post, let’s address the big items.

They are proper hiring, financial monitoring, and creating a climate where an employee with suspicions about a co-worker will feel comfortable coming forward.

Hiring

Most dentists know far less about the people they hire than they should. When we say the words “background check” to many dentists, what they hear is the need to check whether someone has a criminal record.  With 70 million Americans having criminal convictions, criminal records are part, but by no means all, of what should be checked.  The most important investigative step, and often skipped, is the need to speak with former employers.  The best predictor of what kind of employee you will have is how this person performed as an employee in the past. 

There are many other good sources of information, such as doing a drug test and examining how someone conducts themselves on social media.

Here is a link to a webinar where we discuss the proper screening before hiring — https://www.prosperident.com/prosperident-power-hour-april-22-2020-forensic-hiring/

Financial Monitoring

The second component is the financial monitoring of your practice.  We see far too many “I’m a clinician only” dentists who completely abdicate their finances to staff with no oversight whatsoever.  If you leave your finances in the hands of staff without supervision, you will probably be embezzled sooner or later.

At an absolute minimum, the following should be done:

  • A daily review of transactions in your practice management software to look for errors and suspicious entries.
  • A monthly confirmation that the amount that should have been deposited in your bank account according to your practice management software actually was deposited.  The good news is that, unlike the daily review of transactions, this step can be comfortably outsourced to an external bookkeeper.
  • A monthly confirmation that the total revenue, collections, and adjustments from all of the day-end reports you have received equals the totals for the same items from a month-end summary report from your software.  This task can also be outsourced, or we have a spreadsheet that you can use to do the math for you and make this a quick and easy process.
  • A monthly review of your receivables and insurance claims that have been sent but nod paid by insurance to look for unfavorable trends and other anomalies.  This activity is one that should not be delegated.

Here is a webinar that talks about how to oversee your practice’s finances — https://www.prosperident.com/prosperident-power-hour-may-6-reconcile-or-reckless-you-choose/.

Encouraging Employees

The third component is to create a climate where, if a staff member thinks that a co-worker is up to something, that staff member feels comfortable approaching you with his or her concerns.  Staff in dental practices are far less likely to express their concerns than people in other businesses.  Having a well-thought-out policy that is communicated to employees through their employee handbook is a good way to provide comfort to staff who are wrestling with whether to approach you on their suspicions.

This monitoring doesn’t need to be an arduous process.  Five to ten minutes per day and an hour once per month are enough time to do this if some outsourcing assistance is used.

We assist many practice owners with setting up systems that allow them to be in control of their practices’ finances.  Please give us a call if you would like to discuss how we can help.

Prosperident Webinar April 2021 – How Embezzlers Think and Act Post-pandemic

Join your Prosperident hosts Amber Weber, Wendy Askins, and David Harris as they discuss emerging trends in how people steal from dental practices and offer strategies for combatting popular embezzlement pathways.

If you want to check out other webinars that we have done, they are all available here – https://www.prosperident.com/prosperident-webinar-series/. Or if you prefer to receive content in podcast format, Prosperident’s The Dental Practice Owner’s Podcast is now available on Spotify, TuneIn and iHeart Radio. You can subscribe using one of the buttons below.

KY’s Denise Dempsey Pleads Guilty

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Denise Dempsey

Referring to Prosperident’s Wendy Askins as a “living legend” is not much of a stretch. She leads all Prosperident investigators in convictions and dollar amount of embezzlement identified in her storied career, and she has mentored many of Prosperident’s capable investigators. And there has just been another notch added to Wendy’s belt.

Denise Dempsey (who sometimes goes by “Verlie Dempsey” of Harold, KY, has pled guilty to embezzling from the dental practice where she worked. She has paid some restitution, but according to court records still owes approximately $244,000.

She was initially indicted on a charge of “theft by failure to make the required disposition of property,” but pled guilty to a reduced felony charge.

As her sentence does not appear to include jail time, there is a possibility that Denise is looking for work in dentistry. We remind readers to perform a proper background check, including a criminal records check and speaking with former employers, before making a hiring decision.

Well done, Wendy!

To watch a webinar on how to properly vet staff before hiring, click on the link below.

Forensic Hiring Webinar

Canadians DO Embezzle — BC’s Kim Stephens Gets Convicted

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Kim Stephens, of British Columbia was recently convicted for “fraud over $5,000,” which is the most serious fraud offense in Canada. Kim was sentenced to 12 months of house arrest, a further year of probation, plus was ordered to pay restitution of $95,324 to a victim of her crime. Kim also has a prohibition against handling money or monetary instruments in the course of her work.

Kim has worked in several dental practices in the Vancouver area, and her employment has generally not ended in a positive way. She also worked for a time as a consultant offering services to dentists.

Prosperident’s Senior Fraud Examiner Dr. Pat Little performed the investigation leading to the conviction of Ms. Stephens.

This is a good reminder to observe our usual cautions about checking with former employers before hiring.

To watch a webinar on how to properly vet staff before hiring, click on the link below.

Forensic Hiring Webinar

Prosperident Pulse #105 – April 2021

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April 2021

Webinars
Did you know that Prosperident puts on a free webinar every month?
The theme for our Spring webinars is Our next one takes place on March 22 at 8:00 pm Eastern / 5:00 Pacific.
This month, our topic is How Embezzlers Think and Act Post-pandemic.
Registration is available HERE, and PACE CE is offered.
Want to See Us Live?
We are so excited that live events are happening again.
Here are some of the places we are speaking soon:
Apr 16 East Texas Dental Society Bullard TX
Jun 11 Atlantic Virtual Dental Conference Halifax NS
Sep 9 Smile Source Exchange Las Vegas NV
Sep 16 Seattle Study Club Austin TX
Oct 19 Compre-hensive Care Club Port Huron MI
2022

Feb 26 Chicago Midwinter Meeting Chicago IL
May 6 Ontario Dental Association Toronto ON
If you would like to book a Prosperident speaker for your event, please give us a call or use THIS LINK.
Did you miss a previous newsletter? We archive them HERE.

Why Don’t Staff Come Forward With Embezzlement Concerns?
We have noticed an interesting phenomenon in dentistry. When you look at all types of business in aggregate, “whistleblowers” are responsible for detecting 43% of embezzlement. However, when you narrow the focus to just dentistry, the number drops dramatically to under 10%.
One possibility is that other staff members are unaware that one of their colleagues is up to something. Our (admittedly non-scientific) experience suggests that this is often not the case and that the more common reason that staff with concerns do not express those concerns is that they do not feel comfortable doing so.
Something to Talk About…
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Our webinar series celebrates its first anniversary this month. When we started the series, dentistry was reeling from the Covid-induced shutdown. Our motivation in starting the series was to give back to a profession that has been so supportive of us.

And give we did. We opened our electronic store to attendees, developed several new “toolbox” items, and gave away a boatload of copies of my embezzlement book.

In addition to our three hosts, many Prosperident team members and some great outside guests have joined us live. We have had a lot of wisdom pass through cyberspace, some very funny moments, and the occasional technical glitch of the kind that makes your hair fall out. (The proof is in my picture above!).

If you haven’t checked out our webinars, recordings are available HERE.

Lately, we’ve had people request for audio-only content so that they can listen while driving or working out. This was a great suggestion, so we launched our podcast series. Some content is taken from webinars, and some comes from other sources. It is available through iTunes, Spotify, and other podcast hosts, and on our own website HERE.

We are pleased and humbled with our growing audience and the positive reception that we have been receiving for our material.

To repeat an offer we make in our webinars, we are happy to make ourselves available to any practice owner who wants to speak with us. Thanks for being part of our community and for letting us be a part of yours.

Yours truly,

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David Harris
We are Prosperident, Dentistry’s Embezzlement Experts
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Why Don’t Staff Come Forward With Concerns About Embezzlement?

We have noticed an interesting phenomenon in dentistry. When you look at all types of business in aggregate, “whistleblowers” are responsible for the detection of 43% of embezzlement. However, when you narrow the focus to just dentistry, the number drops dramatically, to under 10%.

One possibility is that other staff members are unaware that one of their colleagues is up to something. Our (admittedly non-scientific) experience suggests that this is often not the case, and that the more common reason that staff with concerns do not express those concerns is that they do not feel comfortable doing so.

Clearly there is a significant opportunity to catch embezzlement more quickly than you otherwise would if the barriers preventing concerned staff members from approaching the owner of their practice were removed.

What are these barriers? There are probably several risks that someone perceives about bringing concerns forward:

  • Compared with many of the businesses contributing to the global 43% number (this comes from studies done by the Association of Certified Fraud Examiners), dental practices are small workplaces. This creates the logical fear that the whistleblower will be easy for the thief to identify.
  • They often aren’t sure how receptive the practice owner will be to the possibility that something improper is happening. Particularly when the person suspected is the office manager, any prospective whistleblower must force the practice owner to choose between the whistleblower and a potentially long-term, valued employee.
  • What if I am wrong? Most people trying to decide whether to come forward in this situation are plagued with doubts and insecurity about the meaning of what they are seeing often produces hesitation.
  • Misplaced loyalty. Often staff members feel loyalty to each other, and that loyalty is often stronger than the allegiance that some staff have to the practice owner. We have also noticed that in many cases where embezzlement is taking place, the embezzler dribbles some largesse on other staff. This could include hours paid beyond what these employees actually work, or other benefits beyond what the practice owner is aware of. This kind of action tends to cement the staff member’s primary loyalty to his or her colleague.

What can be done to enhance the likelihood that a staff member with concerns will come forward? Many practice owners have given some thought to how they would respond if approached by a team member with concerns. Unfortunately, this thought process takes place inside the practice owner’s head and is not discernable to an employee who is agonizing about whether to bring their suspicions to the practice owner.

The way to influence someone wrestling with the decision of whether to become a whistleblower is to provide them assurance that their concerns will be handled properly. Since there is no way to identify someone who is facing this dilemma, this requires a standing policy on how someone bringing concerns forward will be handled. Normally this policy should be incorporated into a practice’s employee handbook and communicated with all employees.

What are the elements of a successful whistleblower policy? Here are some key commitments the policy should make:

  • To listen with an open mind.
  • To appreciate the risk someone took to come forward, and to not punish a whistleblower, even if their suspicions are not well-founded.
  • To vigorously protect their identity. In most cases, the fact that there even is a whistleblower should be kept secret, and if there is “discovery” it should be attributed to some other factor.
  • To investigate thoroughly and impartially. Committing to outside investigators is a great means of ensuring these things.
  • If the act of this person coming forward prevents financial loss to the practice, to pay a reward commensurate with the saving. (Offering such a reward is a great way to overcome misplaced loyalty.)

Creating a comfortable and secure environment where someone with information of tremendous value to you is motivated to deliver that information to you can have an immense payoff. We can help by providing our template whistleblower policy to any practice owner on request.

Contact Us

Prosperident Webinar March 2021 – Honing Your Practice Owner Skills

Join your Prosperident hosts Amber Weber, Wendy Askins, and David Harris along with special guest Dr. Wayne Kerr as they discuss how to address the financial and managerial challenges associated with practice ownership.


If you want to check out other webinars that we have done, they are all available here – https://www.prosperident.com/prosperident-webinar-series/. Or if you prefer to receive content in podcast format, Prosperident’s The Dental Practice Owner’s Podcast is now available on Spotify, TuneIn and iHeart Radio. You can subscribe using one of the buttons below.

Arizona man sentenced to 16 years for DSO Ponzi scheme that cost victims more than $23M

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Kent Maerki

A Scottsdale man was sentenced to 16 years in prison for his role in a nationwide investment fraud scheme, authorities said Monday.

Kent Maerki, 78, made misrepresentations about his businesses to solicit investments, according to court documents.

Maerki, who owned Dental Support Plus Franchise, LLC, and Janus Spectrum, LLC, cost victims more than $23 million in losses and kept about $4 million of those funds as part of a conspiracy.

He mostly targeted elderly victims who cashed out on their 401(k) retirement plans and other retirement accounts to invest in companies founded by Maerki.

Their money was then being transferred to other companies controlled by other members of the conspiracy, according to court documents.

“This defendant made millions of dollars by deceiving innocent investors and perpetuating a scheme that defrauded vulnerable victims out of their hard-earned retirement funds,” Raj Parekh, acting U.S. attorney for the Eastern District of Virginia, said in a press release.

“Today’s sentence sends a strong message that anyone in the financial services industry who lies, manipulates and steals their way to success acts at their own peril and risks substantial jail time if they do not operate their practices truthfully and with integrity.”

Content retrieved from https://ktar.com/story/4171815/scottsdale-man-receives-16-year-sentence-for-investment-fraud-scheme/

24 Months for Serial Embezzler who Stole From Dentist and then Mayor

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Roslyn Wedington, 51, was sentenced to two years in prison for tax fraud in connection with her work at the Maryland Center for Adult Training.

She asked for leniency, saying that she cheated on her taxes because she was overwhelmed by student loans and medical bills and trying to help friends and family. If spared prison time, she said, she could pay back her debt to society.

But federal prosecutors, calling her a “rare fraud recidivist,” noted that she had embezzled $800,000 from a previous job and made little effort to make restitution.

U.S. District Judge Deborah Chasanow noted Wedington’s ability to help people, but said that she had twice taken advantage of a position of authority.

“You have proven you cannot be trusted,” Chasanow said. “Frankly, I have no trouble imposing 24 months.”

Wedington was director of the Maryland Center for Adult Training, where Pugh served on the board of directors. Disgraced for Baltimore mayor Catherine Pugh’s aide Gary Brown helped Wedington earn an off-the-books salary so she could avoid paying taxes and wage garnishment for years. She managed to avoid paying $120,000 to the government during that time.

Brown was sentenced to 27 months in federal prison for his role in the MCAT scheme, as well as a fraud scheme related to Pugh’s Healthy Holly children’s books. Pugh, meanwhile, is serving a three-year sentence in an Alabama federal prison.

Wedington was convicted in 2004 for stealing $852,000 from a beloved Park Heights dentist while working as his secretary. She presented checks to Dr. Ernest Colvin to sign, then would add a thousand dollars to the amount. Colvin, who has since died, asked at the time for leniency for Wedington, and she was spared jail and asked to pay back $250,000. She made sporadic payments.

Part of Wedington’s salary from MCAT was garnished in 2013 to repay debts. To avoid such garnishments moving forward, she asked Brown to move her “off payroll” at MCAT and instead funnel money directly to her.

According to Wedington’s plea agreement, Brown directed the center’s payroll provider to pay him the amount of her salary — more than $80,000 a year — as an independent contractor. He then gave the money to Wedington in cash. Brown eventually gained authority to write checks from MCAT bank accounts, and started writing Wedington checks directly.

Assistant U.S. Attorney Leo Wise told Chasanow that “fraud was how [Wedington] operated. That’s simply the state of affairs for her.”

Wedington’s attorney, Brandon Mead, said that his client hadn’t splurged on handbags and fancy cars, but was trying to get by.

“Ms. Wedington is one of those individuals who takes on a lot,” Mead told Chasanow.

Wedington apologized, but also blamed others.

That didn’t sit well with Chasanow.

“The fraud in this case was your instigation,” Chasanow said. “You didn’t want to pay taxes, you wanted to have money yourself. There might’ve been good things you did with it. That’s not the point.”

Content retrieved from: https://www.baltimoresun.com/news/crime/bs-md-ci-cr-pugh-wedington-sentencing-20210304-euyub2njczcpfnpshykzvdr7bm-story.html