Category: Articles about embezzlement

Lots of articles on embezzlement

“My Day-end Report Balances to my Deposit, so I Must Be Safe From Embezzlement”

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We hear this a lot.  At the core of your practice management software is a concept called “double-entry accounting”.  This means that a transaction mandatorily affects two different “accounts” maintained by your software. 

So, for example, entering a dental procedure increases both your “charges” and the receivable due from that patient.  Entering a payment decreases the patient’s receivable balance and adds to “collections”.

In a perfect world, stealing money would cause one of two issues; either the day-end report would not balance to the bank deposit if the amount stolen had first been entered as a payment in the practice management software. On the other hand, if the amount received was stolen without anything being entered into the practice’s practice management software. the software would show some unfortunate patient having a balance that is higher than what it is supposed to be.

Many dentists believe that the existence of this double-entry accounting will prevent would-be thieves from successfully stealing from the practice.

There are a couple of flaws in that logic. First, many dentists do not thoroughly check reports from their practice management software against the bank deposit. It isn’t sufficient to limit the review to the amount of cash and checks being taken to the bank; the practice owner must also verify deposits made directly by third parties, such as credit card payments and “ACH” (automated clearing house) deposits made by some insurance companies and other third parties like patient financing companies. A complicating factor is that there is often a timing difference — if a patient pays by credit card today, the practice management software treats this payment as being received today, although there is typically a delay of a couple of days before this payment is deposited to the practice’s bank account.

So if the practice owner is not verifying deposits or is doing an incomplete verification, a thief may not be required to display any artistry — they simply create an out-of-balance situation in the knowledge that the doctor will not find it.

If the day-end routing is done properly by the practice owner, a thief must become more creative. There are a number of methods of generating “fake news” where so that the reports produced by the practice management software are inaccurate, so that the day-end appears to balance while at the same time patient account balances are accurate. This is common, and something that we see almost daily.

Because we do not want to add to the tool kits of any embezzlers who happen to be reading this article, we are not going to enumerate the methods of “cooking the books” here; however a dentist with concerns or questions is welcome to contact us for a private discussion.

Why Caution Is Needed When Checking References

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Reference Check Essentials: Helping You Master Your Hiring Process

We recently received the following email from a dentist:
“My embezzler passed my references check. I asked for 6 references, and she passed with flying colors. And then proceeded to rob me blind. I thought that maybe y’all needed to make a post about it, or SOMETHING, to the world of dentistry, because seriously, this is why we can’t trust references. When people fabricate deception like this, how can we trust anything as employers, to be able to find someone worthy of hiring?”

The dentist was referring to a website that, for a fee, will supply false references to help someone pass reference checks. Here is what one such site claims:

“Paladin Deception Services is here to assist you in obtaining the fictitious reference, the little white lie, or the alibi that you need. Our agency can provide you with either male or female testimonials over the phone in the local area code that you require. We’re confidential, professional, innovative, and affordable. Most importantly, we keep it legal. Get the verification that you need!”

People with tainted pasts are aware that dental offices are great places to seek jobs because background checking done by most offices is superficial and easily defeated.

Here is what one (illiterate) convicted felon said about working in dental offices:
“Dental game is great. No back round checks unless u work with kids. Great money easy hrs and its the same thing over and over.”

We’d like to mention two sobering statistics about the people who apply for jobs with you: one in four US adults has a criminal record, and some studies suggest that the prevalence of resume falsification or enhancement exceeds 50%ii.

To help you avoid a hiring mistake similar to that of the dentist who emailed me, here are some essential steps to follow when checking references:

1. Check photo identification (and some other institutionally issued card or ID) for every applicant you interview. One of the easiest ways to hide an unsavory past is to use someone else’s name.

2. You must speak with all former employers for the past five years. There is no value whatsoever to “character” references; the only people you want to speak with are former employers. What someone’s 8th-grade science teacher thinks about them isn’t of much value.

3. Have a conversation with every single work reference listed for the past five years. Written reference letters, even if addressed personally to you, are worthless. Many people leaving a workplace “borrow” a supply of letterhead and envelopes so they can forge reference letters as needed. One study found that 17% of the employers surveyed had detected forged reference letters. You need to pick up the phone and call. No exceptions.

4. On the subject of calling, never call any phone number given to you by an applicant. You may end up speaking with a relative or friend pretending to be a former employer or a “deception” service like the one described earlier. Find phone numbers independently, and call those numbers to ensure you are speaking to the correct former employer.

5. Ensure that the office you are calling is a real business. If it is a dental office, the dentist will be registered with their State Board. Another place you can check is www.ratemds.com, which has patient reviews for virtually every dental practice. If the work experience was with a non-dental business, do they have a website? Another good place to check for legitimacy is Equifax, which maintains listings on almost every legitimate company. (https://sb.econsumer.equifax.com/bizdirect/companySearch.ehtml?advancedSearch=true).

6. When you call the office of a former employer, make sure you speak to the right person. If you are calling a dental office, speak to the practice owner first. He or she may hand you off to their office manager but start with the dentist. For any non-dental small business, identify and speak to the owner. Larger companies typically have HR departments that provide job reference information. Often, calling an HR department means that the information you obtain is limited, and you will probably not have the benefit of speaking with anybody who supervised your applicant, but make the call nonetheless.

7. You should ask the following questions to every former employer you speak with:
a. What were the start date and end date of employment? Please ask the former employer for these dates; do not provide them and ask for confirmation. Applicants trying to hide something will often manipulate employment dates.
b. Confirm job title for the position(s) held by the applicant. Job applicants often embellish their resumes so that, even though their former position was “receptionist,” on their resume it becomes “office manager.”
c. Ask each former employer who the applicant worked for previously and subsequently. Often former employers do not know this information, but sometimes they do. Comparing what you learn with the resume provided may uncover a discrepancy.
d. Ask who ended the employment relationship. This question may not be one that gets answered, but you may learn something valuable if it is.
e. You should always ask whether the organization or individual you are calling would re-hire the applicant. If you are speaking with an HR department, you may get better results if you ask the question in the negative, i.e., “Is there any reason why this person is not eligible to be rehired by you?”.

8. You must get a reference from an applicant’s current or most recent employer. Often an applicant will ask you not to contact their current employer because “he/she does not know that I am leaving”. This statement may be true, but alternatively, this may be a strategy to prevent you from calling a “current” employer only to find out that your applicant was fired from their employ two weeks ago. An applicant who asks you not to contact their current employer must be told that you do not hire anyone without speaking with their most recent employer. You may offer to defer this conversation, but you must make it clear that a discussion with their current employer must take place before you finalize an offer of employment.

While most applicants for the vacancy you need to fill are honest and will make excellent employees, there are those who need to be filtered out.

We see “serial embezzlers” all too frequently, and many of them would not have secured employment with the practices they stole from if those offices had known about and implemented the hiring strategies we have outlined here. Historically low unemployment rates and the perception that there is a shortage of qualified applicants for positions in dental offices put a great deal of pressure on practice owners to rush the hiring process. I would like to urge you to resist the temptation to expedite your hiring process. The cost of hiring a rotten apple far exceeds the value of conducting a proper screening.

Importance of Investigators in Criminal Cases

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Here is an excellent article from the online magazine PInow.com

When the general public thinks of a private investigator, they may think to common situations in which a PI is hired, including divorce and insurance fraud. What they may not realize, however, is that private investigators often play a critical role in solving criminal cases. Through examining the importance of investigators in criminal cases, the benefits of using a private investigator become apparent.

Working With Law Enforcement

Private investigators are a unique asset that can prove to be incredibly resourceful to law enforcement officers. When police departments are understaffed or overworked, the potential for criminal cases to go unsolved increases. By working together with law enforcement, a private investigator can help bring to light new theories and identify new pieces of evidence that can help solve the case before it grows cold.This may prove to be helpful in not only providing resolution, but in pursuing a conviction, as well.

Additionally, private investigators are able to dedicate their time to a single case if they so choose, providing full resources and attention to that particular case. They are also not limited by jurisdiction lines, so they can pursue leads completely without having to stop and turn over their case.

While some police officers may be reluctant to working with a private investigator, especially in states where there are not strict licensure requirements in place for private investigators, it is important for them to take advantage of a private investigator’s services when they are unable to solve a case themselves. It is also similarly important for private investigators to respect the work that the detectives have already done. Establishing a relationship could prove to be helpful on not only the case that each are working on in the present, but also for future cases as well.

Furthermore, a great number of private investigators were once part of law enforcement in some capacity, which helps bridge the gap between law enforcement and private investigators by helping to establish common ground and a rapport.

Benefits for Law Offices

For attorneys who are pursuing the conviction or vindication of an individual, a private investigator can prove to be an important asset, depending on the type of case. While more straightforward criminal cases (for example, DUI) may not necessitate the need for a private investigator, more complicated or serious cases will.

Private investigators can assist law offices by conducting witness interviews to help bolster support for their side of the case. These could include re-interviewing witnesses who had been previously interviewed by law enforcement as well as finding and interviewing new witnesses who had either initially declined to comment or were not found.

Similarly, attorneys may not have the time and or internal resources to conduct all of the legwork needed to build a solid case. Before building a case, the attorney has to research, investigate, and review all the details of the case. This is where a private investigator becomes a critical member of the defense or prosecution team.

In fact, some states, such as Wisconsin, actually include private investigation as part of the state appointed defense; however, it is up to the assigned attorney to use them. In some situations, it could mean unnecessary jail time for defendants who are wrongly accused but their defense does not adequately support them.

An analysis of legal resources used in Wisconsin revealed that “The billing data, however, shows most lawyers deem investigators essential.”

Benefits for General Public

When it comes to criminal cases, members of the general public can also benefit significantly from hiring a private investigator. In some cases, and especially cold cases, surviving victims may contact a private investigator in an attempt to breathe new life into a case in hopes of getting it solved.

A fresh set of eyes may help uncover bits of evidence that were previously unnoticed. This is not to imply that the people assigned to the case were negligent; instead, it merely highlights the fact that different individuals will interpret and analyze the facts of a case differently, which increases the chance for the discovery of new information.

While private investigators do not have access to the same resources as law enforcement, they often can approach the detective assigned to the case and see if they are willing to work together. An example of this occurred in Beaumont, Texas, where a man was found dead of unknown, unnatural causes. The case grew cold, and ultimately, the man’s widow called and hired a private investigator. The investigator, Ken Brennan, took on the case, approached the detective, and worked with him to solve the case.

However, individuals can benefit from hiring a private investigator for criminal cases that haven’t gone cold as well. They may wish to hire an investigator to assist with a missing person’s case or to supplement an ongoing investigation or criminal case. Furthermore, there may be the potential for a criminal case and which a private investigator could assist in uncovering a crime.

Choosing a Private Investigator

It’s important to choose a reputable private investigator who is both experienced and up-to-date with any state-required licensure requirements. If you’re in need of a private investigator, you can easily search our directory by city, state or zip to find qualified investigators ready to help.

Content retrieved from: https://www.pinow.com/articles/2366/importance-of-investigators-in-criminal-cases?signup_code=roundup&mc_cid=ad02924926&mc_eid=b330a6d46d

Is my practice “immune” from embezzlement?

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“I live in a small town…”

I’m not referring to the catchy John Mellencamp tune of the 1980s (although I did like the song).  I’m referring to one of the factors that dentists use to convince themselves that they are “immune” from embezzlement.
We all want to believe that our staff are honest and that they would never steal from us, and most of the time this is true.  However, there is also a significant portion of the population who, in the right circumstances, will commit a dishonest act.  When you combine the size of this cohort with the large number of staff that a typical dentist will hire in his or her career, the result is that at least two in three dentists will eventually be embezzled.
The two biggest mistakes that I see dentists making is that they underestimate the ingenuity and determination of those who embezzle, and that dentists latch onto certain factors that they believe provide immunity.
It is tempting to think that embezzlement is an urban problem and is caused because dentists in cities often end up hiring people who they don’t know, whereas in many cases those hired by a small-town dentist are already well-known to the dentist.  What the dentists with this hypothesis do not know is that the majority of embezzlers have no criminal record or history of previous embezzlement.
I have also encountered many dental specialists who believe that embezzlement is primarily a problem for general dentists.  Others think that by paying their team members a premium above the going local rate will ensure the honesty of those people.
And then there are those who are convinced that checking the day-end report from their practice management software will prevent embezzlement.  (Boy are they mistaken — see a discussion HERE.)
Embezzlement happens for one simple reason — someone working for you decides that they have an entitlement to your money.  The factors that push them into this decision have a lot to do with them, and very little to do with you.  If the factors necessary to put someone in the place where they feel that stealing is appropriate, then they will embezzle.  This can happen in any practice.
Our Hall of Shame profiles about 500 embezzlers.  Statistical analysis of them shows that they fit virtually no profile.   Most are female, but this is probably a simple reflection of the gender imbalance among administrative staff in dental practices than the propensity of one gender to embezzle.  They range in age from their early 20s to their 70s.  They have widely varying levels of education.  They live in the biggest cities and the smallest towns.  Their methods of stealing vary widely.  Amounts stolen range from a few thousand dollars to over $1,000,000.
So to believe that certain factors make your practice immune is both understandable, and naive.  Take heart, though, because there are some concrete steps that you can take to improve your chances.  A good starting point is HERE, and Prosperident does offer some excellent options for improving your protection.

Do you want to protect your practice better?  Give Prosperident a call at 888-398-2327 or send an email to requests@dentalembezzlement.com

Why Dentists Hire Badly

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By David Harris

Our June 2017 Newsletter’s guest columnist Laura Hatch nailed it in her article on hiring when she says that dentists HATE the process of hiring staff.  (See Laura’s article HERE.)

Let’s face it — hiring is a minefield:
  • You either have too few qualified applicants or too many.
  • In addition to the challenge of finding a single person with both the right skills and the personality you are seeking, hiring is subject to much governmental regulation.
  • Often you are operating under considerable time pressure to fill an essential position.
I think it is also safe to say that very few dentists chose their profession based on a burning desire to own a small business.  For most, being the CEO is the curse that accompanies the privilege of restoring and enhancing smiles.
Skepticism when hiring is something that does not come naturally to most dentists.
There are clear dangers out there — 25% of US adults have criminal records, and credible studies estimate that more than 50% of resumes contain some level of falsehood.  And yet when I ask audiences of dentists whether they have done something as basic as checking photo identification last time they hired very few have done so, and the thought that an applicant might be using a false identity never crossed their minds.
It is no wonder that about a quarter of our caseload involves “serial embezzlers”.  These people have stolen before, and have managed to hide this fact from subsequent employers.  This DentalTown article deals with one such serial embezzler who has worked in over a dozen practices.
There are some simple steps you can take to protect yourself better from these people. Click HERE for some good ideas on screening applicants.

Do you have questions about embezzlement?  Give Prosperident a call at 888-398-2327 or send an email to requests@dentalembezzlement.com

I just hired someone and then got notice that their wages are garnisheed. Should I fire them?

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We recently got this question from a consultant friend of ours:

“I have a question as I have a client that recently hired somebody and  shortly after she started he got a request for garnishing her  wages to pay off &3,200..00.

He’s not sure how to handle this and are even if he should keep the team member. What would be your recommendations? It appears as it has set off the red flags for him and I myself am not sure how to handle this or what to recommend.

Thank you in advance for your help.”

This was our answer:

It isn’t necessarily an issue, but probably requires a bit more investigation.

Garnishees can come from a lot of different things — unpaid parking tickets might be an example of something causing a garnishee where there might not be an employment implication.  It could also be a financial dispute with an ex-spouse.  It could also be an unpaid fine for a criminal conviction, which is obviously more concerning.

It is important for the dentist to understand WHY the employee’s wages are being seized, so he or she needs to dig into this.  And of course it isn’t a good idea to take the employee’s word for what happened; your client should ask to see paperwork.

Also, it’s a good time to consider whether the background checking that was done when this person was hired was sufficient.  Were former employers contacted?  Was the applicant tested for drug use?  Some information on checking backgrounds when hiring is here — https://www.prosperident.com/how-not-to-hire-the-wrong-people-in-your-practice/ .  If screening done at the time of hiring was lax (and it usually is), this needs to be addressed.

Clearly the garnishee means that the employee is in precarious financial position — obviously they don’t have $3,200 available to settle this debt. If this person is a single mom living in a rented apartment, I  fully expect there to be financial issues.  However if this person drives an SUV and lives in an expensive house, the fact that they don’t have $3,200 would really concern me.

I’m happy to speak with your client if he or she wants to discuss further.

Do you have questions about embezzlement?  Give Prosperident a call at 888-398-2327 or send an email to requests@dentalembezzlement.com

 

 

Doing Proper Backups

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We all know that data is important, and we need to back it up.  Whether a hard disk stops working, or your network has been invaded by “ransomware”, having a proper backup can definitely save your bacon.

When we examine someone’s practice for embezzlement, we start by making a duplicate of their practice management software in our lab.  This allows us to do our work unobtrusively and isolated from the changes that take place daily in “live” software.

Normally our technical staff connect to the client’s server over the internet and upload what we need to our lab.  However, occasionally we receive a disk drive on which our client has made a backup.

Overall our experience with these backup media isn’t good.  It is common for us to receive a backup containing only empty folders.  At other times, we receive an “incremental” backup (i.e. only files changed since the last backup).

Obviously, if you are using cloud-based practice management software you don’t need to worry about this; for the rest of us there are a few rules to follow:

  1.  Test your backups.  To paraphrase an old cliche “You don’t need a backup until you need one and when you need one you really, really need one”. Testing a backup of practice management software isn’t easy — you need to restore it to a “clean” install of your practice management software to make sure that it works.  With most software, there are several critical files that, if not backed up, will make you unable to restore a working copy.
  2. Always back up data; never back up software.  Your practice management software is easy to rebuild if needed (usually as a download from the company that owns it), so there is no good reason to back it up.  And it also presents a danger — if your backup media is lost, someone finding it will have both your data and the means to read it.  Data without the software is usually quite difficult to extract, and backing up your software provides little benefit to you but makes it much easier if someone comes into possession of your data.
  3. Don’t use flash drives for your backup.  The storage of small USB drives has increased dramatically over the past few years, and it is tempting to use them as backup media.  However their small size is also their downfall; it is far too easy to lose one and not realize it.  However if a portable hard drive falls out of your pocket, you will definitely notice.
  4. Backups need to be taken off-site.  Backing up to a hard drive next to your server will not help you at all if your office burns down.
  5. Encrypt your backup.  Practice management software, except in very outdated systems, is already encrypted.  However, there are often a few files that are backed up that aren’t encrypted, and many offices back up other office files in addition to practice management software.  So encrypting and protecting your medium with a password provides a good (and easy to implement) additional layer of security.  And you really don’t want a HIPAA breach, do you?
  6. Be careful with “incremental” backups.  These are backups limited to things that changed since the last backup.  This is normally done if the data set is really, really big, but makes the job of restoring from backup much harder (typically you must restore the last full backup, and then every incremental backup made after the full backup, in sequence.
  7. Redundancy is key.  If something is important (and your practice data certainly qualifies), it should be backed up at least twice (e.g. one backup to the cloud, and another to a physical medium).
  8. Cloud backup needs to be used carefully.  Most cloud backup probably isn’t HIPAA compliant, so some research needs to be done, and, just like backup to a physical medium, cloud backup should be properly encrypted.

Hopefully you never need any of this, but in case you do…

Do you have questions about embezzlement?  Give Prosperident a call at 888-398-2327 or send an email to requests@dentalembezzlement.com

 

Should I fire an employee if I find out that they have embezzled from someone else in the past?

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By David Harris

CEO, Prosperident

Over the past week, I’ve encountered a couple of similar situations, which leads me to believe that this scenario is worthy of my writing about it.

Both situations started with a call from a practice owner who had just discovered that an employee had previously embezzled from another practice.

While this isn’t my focus today, I’ll mention that this does highlight the poor job that most dentists do when screening job applicants; in both cases this information was discoverable before hiring. An article on proper pre-employment screening is here.

In both calls, we were being asked to see if these employees were now embezzling. I think that the hope of my callers was that if our investigation came back “clean”, they could stop worrying about these employees.

Unfortunately it fell to me to burst their bubbles, and I told each caller that in my view, the employees should be fired immediately.

Embezzlers are people who, responding to a particular set of pressures, chose to steal.  Many others, in similar circumstances, adopted some other solution.  The probability that, over the duration of their employment, those pressures will reoccur is considerable.

Once someone has shown a preparedness to cross the “criminal threshold”, particularly if doing so had relatively few consequences, the likelihood of recidivism is high.

There are certainly people (and I count myself among them) who, after youthful miscreance, choose to change their behavior.  I know and admire many people who mad a positive change in direction.

However, both of the employees in question failed a basic honesty test when applying for their current positions — they could have owned up to their pasts instead of concealing them.  Since both got their jobs on the basis of lies, this tells me that they have not yet turned the corner towards honesty, and are “ticking time bombs”.

While it wasn’t exactly what my callers were hoping to hear from me, I’m pleased to tell you that both have taken my advice and have parted company with these employees.  In a similar situation, you should do the same.

Do you have questions about embezzlement?  Give Prosperident a call at 888-398-2327 or send an email to requests@dentalembezzlement.com