New Insights Into Embezzlement April 2020

Episode Transcript

Auto-generated transcript: New Insights Into Embezzlement April 2020

You are listening to the dental practice owner's podcast. Brought to you by Prosperident. From our unique perspective, as dentistrys and bezel-it experts, Prosperident's team can bring you the information that is important to practice owners. The dental practice owner's podcast brings you strategies, tools, and tips that you can use, and dentistry's thought leaders as guests.

So sit back, relax, and listen to Prosperident's Amber Weber, Wendy Askins, and David Harris. Talk about the issues that matter to you. We would like to welcome everybody to our Prosperident Power Hour. My name is Amber Weber, and I am a senior fraud examiner with Prosperident. I spent 13 years of the dental hygienist in office manager, and then I was fortunate to meet David and become a team member with Prosperident. My, our other host today, our Dave Harris.

He is our CEO of Prosperident, and I'd like to introduce everybody to Wendy Askins. He is a supervising examiner. Wendy has been a great mentor for me, and I've learned a lot from her. So Wendy, if you could please introduce yourself to everybody, that would be great, so we could everyone could get to know you. Oh, thanks, Amber. How many from Texas everyone? I've been with Prosperident for eight years, and I've been in the dental industry for about 30 years.

And it's been such a rewarding career. I've met amazing people, and I'm so happy to be joined up with Prosperident, and be able to fight crime every single day. Excellent. Thank you. Wendy, and we were so happy to have you. And we're so appreciative of everybody joining us today for our Prosperident Power Hour. Our CEO, Dave Harris, we'd like to hear from you about today's webinar. Good to be here. Anyway, Amber, if you're ready, I'm ready. Let's get going. Some things discussed here for security issues.

We won't be talking about certain things for that, but we're happy to have private discussions with you. So you will get our contact information at the end of the webinar, so we have specific concerns that we cannot assess here. Please feel free to contact us. So if that any other questions about that, just let us know. We'll be here to answer for you. We'll talk about a few myths. These are myths about imbezzlement that have been around for a long time and won't go away, but I want to deal with them head on.

The first one is that my accountant is protecting me from imbezzlement. Sometimes what dentists in their advisors don't realize is how narrow the accountants window really is into their practice. Picture a conversation that I could have with my accountant. I go to my accountant and I say, Mark, I'm really excited because I'm going to start this new business. And Mark, my accountant says, David, that's great. Tell me about it. And I say, well, I have this really great idea. I'm going to actually use two different pieces of software. One piece is going to track my revenue and a totally separate piece of software is going to track my expenses.

And Mark, here's the best part of all. They're not going to talk to each other. Mark would say to me, David, that's the stupidest idea I ever heard. I mean, there's no way that would work. And yet, I just described every one of your practices. Dentists use practice management software to track their revenue. They use quite books or some kind of accounting software to track their expenses. And these two, in general, do not hook up. When your accountant looks at your world, typically they're looking at the expense side,

in other words, quick books. And in the way that accounting works in the U.S. in particular, they really don't need to look at the revenue side at all. They can work from your bank account. So most accountants are not looking at your practice management software, most of the time. And that means that the chance of them finding investment, which typically takes place on the revenue side is pretty small.

I'll give you some statistics on this. When we look at embezzlement globally, accountants find about 30% of it. When we narrow our focus to dentistry, that number goes down to about 9%. So your accountant does certain procedures. If you're dealing with a dental CPA, they probably are a little bit better equipped than in generic CPA, but it's still not all that likely that what they do is going to find investment.

Here's the other myth. You know, I have really good systems in place. I have checks and balances and that's going to protect me from embezzlement. I was doing a webinar for a group the other day. And I said, the way you have to view this stuff is it's kind of like playing poker with somebody, but your cards are face up and there's art. Your staff know exactly what your systems are,

what you look at, and more importantly, what you don't. And for a thief, embezzlement is really a crime of navigation, and it involves navigating around the scrutiny that you've put in place. Let's also understand that if I'm a thief, and I want to steal from you, and the first way that I think of to do that is blocked by you, that doesn't send me home to join the church choir, it simply makes me an un-requited thief,

and I need to look for some other way to do it, and chances are pretty good I'll find it. I think I hear a lot from practitioners is, I don't take in that much cash anyway, therefore I'm not vulnerable to being stolen from. And I'll say a couple of things. First of all, I think COVID is the perfect excuse for a lot of practices to stop taking cash.

In other words, this is a great time when you reopen to say to your patient community for the safety of our staff and our patients, we're no longer accepting cash. And it gets rid of a major headache. You know, one of the real sources of annoyance and administration of the front desk. So I think that's something that a lot of practices

should be thinking about right now and possibly emblemating, and it would be fine to do as long as it's communicated in advance. In other words, you don't want to be having that conversation when something... be standing in front of one of your receptions trying to pay their bill. Having said all that, it's not that hard for thieves to steal checks with your name on them to adulterate credit card payments or even to interfere with what are sometimes

called EF to your ACH. EF to his electronic funds transfer to your bank account. You should know that thieves can steal any form of wealth transfer to you. So let's not fall into the trap of thinking, you know, there's not much cash that comes in here and therefore I'm not vulnerable. The other myth is that every piece of software will print some kind of day and report and if that report agrees with the amount of money going in my bank, I must be safe. No, it's not hard to teach software to lie.

That's another conversation we're not going to have in a public forum, but we see it on pretty much a daily basis. The final myth, and I hear there's one a lot, you know, there's no point in going after these thieves because they really don't get punished anyway. Well, I'm going to turn the floor over to Wendy Askins and she'll talk about a thief and the punishment they got. Oh, thanks, Dave. I can think of no more beautiful example of this than Deanna Gray.

Deanna Gray is a thief who got exactly what she deserves. Now, when I first spoke to this sweet, precious client of mine, she made the comment to me, we really don't get that much cash in my office. The reason that my client was not seeing the cash that was coming in from her patients is because Deanna was stealing 75% of the cash payments that were coming across with her own desk for a total of a little bit over 550,000 jobs. You can imagine that sent my client straight over the edge. She immediately called the state police in which Rosemary was able to work with the

state police and have Deanna arrested. Unfortunately, Deanna was arrested in another state at her new job as a dental practice office manager. Now, that should absolutely send chills of every single person's spine and that's why you should be listening to David's webinar next week on how to forensically hire. Anyway, so Deanna was arrested in her at her new job in a dental office and she ended up being charged with 10 felony counts at first and she took a plea bargain in which she had to remunerate $412,000 or I'm sorry, $421,000 to my client.

If she can pay that back by selling her assets within a five year time period, she can be released from prison. If not, she will have to serve the entire 12 years in prison. Whoo, that should make us all extremely happy. You said assets are you mean kidneys, right? Yeah, just like that, yeah, yeah. Anyway, so what are your chances of being an investment victim? Well, and in 2019, the ADA Council on Dill practice did a survey. It was the most recently updated survey that they had done since 2007. And of course, what we see is that investment is not decreasing. It's actually increasing to 53% of the participants in the survey reported

that they had been a victim of an investment. What's more astounding than that is the difference of how many times each participant had been in bezzled. So we see 26% had been in bezzled twice, and then percent had been in bezzled three times, two percent had been in bezzled four times, excuse me, and eight percent had been in bezzled five times. And in my experience with prosperity over the past eight years, I find this, unfortunately, to be true, currently I am working with an orthodontist, and this is his second time to be in bezzled from. And he said, I wish I would have had you guys supporting me the first time that I went around, because I don't think I could do this again. I can't do it again all by myself. So he's grateful that we're working together,

but it's still his second time to be in bezzled within about a 10 year time period. Now, what's even scarier than that is the dramatic increase that we've seen from the 2007 survey, which showed that 35% of the participants survey had been in bezzled, as compared to 53%. So what this is showing us as a dental community is that it's not if you're in bezzled, it's when you're in bezzled. So our next slide is of Misty Casanova. Yes, that is her real name, and no, she is not a stripper. She was a down to professional, who stole $353,000 from her dental business. Now, Misty, so Misty stole simply because she was greedy. Misty loved it to take limo rides, two concerts, and sit on the front row, and she led it to pay for all of her friends.

Unfortunately, Misty was so greedy. She had to steal from her practice owner to be able to do that.

Most of the thieves that steal pre-COVID were stealing because of greed. I think in the near future, in a post-COVID world, we're going to start seeing people that are stealing out of sheer need, and that they were once a two-income family that was stretched to the very limit as they were with two incomes, and now possibly they both lost their jobs, or maybe one person gets their job back, and the other doesn't. So now they are a single income family in which two incomes are actually needed. What's interesting about someone who steals out of need is that if you listen to Dave's webinar, and Amber's webinar last week, you heard them talk about the three pillars of of theft.

And that is pressure, opportunity, and rationalization. The difference between a needy person who steals and a greedy person who steals, is that a needy person will jump from pressure to rationalization very quickly, because in their minds, they're not doing it from a selfish standpoint, just so they can be on the front row to see Lady Gaga.

That's not it. They're stealing out of a pressure to be able to provide for their family and to keep a roof over their children's head, so they jump from pressure to rationalization very quickly. The only avenue or the only pillar that is still open is the opportunity, and that's where your business comes in. So what does it look like when you get in-business from?

Well, first of all, you can count on losing the rate of $100,000. The theft scheme will last approximately one and a half to two years, and there will be at least three different type of theft methods that are used. Now, some interesting things I want to point out here is average duration for what

at a half to two years. The reason that happens, or the reason that that link is chosen, is because the scheme will start to collapse on itself. Being a patient might see something on the ledger and might call and ask a question, or bring it to the doctor's attention, or someone else in the office might notice, or the business owner might notice a few differences

in the day she or some deleted payments that just don't make sense, so they start asking questions. So we'll see that oftentimes after one and a half to two years, the investor will abandon that scheme and guess what? They move on to a new business, right? And then the reason that three methods are chosen is because, as Dave mentioned before, in Bezelman is a crime of navigation.

If I lay all of my cards out on the table and I thought one avenue of theft, you might discover that avenue, and you might choose to implement a protocol, which now blocks that avenue of theft. And I can't afford for that to happen, so I have to create other avenues of other streams of money that I can steal so that my scheme is not interrupted.

Great information, Wendy.

Well, let's ask an interesting question about how embezzleman is discovered. And I think this may surprise some people. The information here comes from a survey, and Wendy mentioned it a little bit earlier. So the American Dental Association, Council and Dental Practice. In 2019, did a survey,

and they questioned about 17,000 dentists on embezzlement. And they asked them, first of all, were you embezzled or not? And Wendy talked about the answers to that. They also asked, how did it happen, how did you discover it, things like that? There's a lot of interesting information in the survey. One of the questions was about discovery.

Of course, there were a wide variety of answers. I've aggregated them for purpose of this conversation. And look what happened. Those systems that you put in place, the day-end balancing, dividing up duties between people, all those things, resulted in the discovery of 17% of the embezzlement that was found. The other 83% came to light by what I would really

broadly call dumb ass luck. So this is some chance of currents that resulted in discovery. And if you want examples of what this kind of stuff might be, a patient questioning their bill. Some third party calling you about something that wasn't expected. I mentioned in a previous webinar that one of the biggest embezzlement I ever worked on,

early in my career, came to light when the office manager broke her like skiing in Monday morning for the first time in anybody's memory. She wasn't in the practice. And by 11 a.m., one of the receptionists came into one of the doctors in the practice and said, I need to talk to you, there's something we're going on here. And she'd gotten a number of calls that morning from very similar calls

from patients about their bills. And it sort of made her believe that there might be something going on. So when I said a few minutes ago that I don't think systems will protect you very well, here's why. Now, having said that, it's certainly possible to implement better systems. We, one of the things we do with a lot of doctors, and this is something that Amber Weber, our host today, is pretty heavily involved in,

is we work with them to put in place systems that are more effective than what they have. But the systems that most of you have now probably aren't going to do it for you. Another question, and I'm going back now to an earlier survey. This is when it was done in 2007. And the question is, what prompted discovery? And we're looking at it in a little different way now. And I've broken the responses into a financial source of discovery,

which might be something like my accountant found the investment or the day end didn't balance to the report or something like that. And behavioral discovery. So behavioral discovery really means that you have somebody in the practice who's acting like they're up to something. And I'll talk in a minute about what sort of thing that might mean. But look what happened. More than two thirds of investment was not discovered

by some kind of financial irregularity in your practice. It came too light by the way that thief was acting. And I think one of the places where sometimes we put emphasis in the wrong direction is that a lot of you are probably doing a good job of looking at the financial stuff, but not necessarily paying enough attention to how people in the practice are acting. And I'm going to talk in a few minutes about what that behavioral looks like.

And we're also going to give you a tool at the end that we'll make this a whole lot easier. So now. that I've depressed the heck out of about 700 people. Let's talk about what to do about this. And I mentioned behavior. Let me be specific here and give you some behaviors. And I'll mention as well that the people in the background today, of course, are

in bezards. If any of them look a lot like one of your staff, please email us quickly after. We really should talk. One of the strongest characteristics of a investment is that how thief spend their time. And the first thing I'll say about this is that they love a loan time. They want to be in the practice when nobody else is. So that means they will show up early or they'll

stay late after everybody's gone, or maybe they'll come in on a Saturday or Sunday when the practice is closed to do their stuff. They want that own time for a couple of reasons. First of all, they really don't want to be observed when they're doing certain things. And the possibility that you might poke your head into their workspace at the wrong moment isn't when they really like to consider. And the other thing that people don't think about a lot is that investment takes concentration.

And it's difficult to muster that concentration when the phone is ringing and you've got patients wandering through the office and the doctors have been around. So thieves will try to get by themselves. The other way that they spend their time is that a lot of thieves are reluctant to take vacation. And what happens when they're gone is they lose control over the flow of information through the practice. And just like I mentioned about the investment where the office manager broke her leg, that was another unplanned way of losing control of how information went through the practice.

So a lot of thieves who will come up with reasons not to take vacation or they'll only take it when the whole practice is closed. Or they'll take it in little tiny increments like a day at a time. And the significance of taking one day of vacation is that if I do that, nobody else is going to feel they need to pick up my work on that day when I'm gone, knowing that I'll be back soon. So the takeaway from this is you really need to make very sure that everybody takes vacation for an extended period of time like two weeks at least once a year. And it's great to make this as a policy, but unless you monitor it, it's useless.

If you simply make an edict that everybody needs to take vacation, but there's no real follow-up or tracking of that, then I'm not sure you've accomplished what you said out to you.

The next thing that we know about these is that they're territorial. In fact, the more recent ADA study, the one that was done in 2019 and released in 2020, found that almost 50% of the investment victims had observed this in one of their staff. So we're talking here about possessiveness about their duties, and it will even extend often to their workspace. This is the person who doesn't like anybody else sitting at their desk or touching their computer. And a really close cousin of territory all it is that these people typically don't want to cross-training anybody else to do any portion of their job. From the perspective of a thief, if I teach somebody else how to do some of my work that creates the possibility that my job gets broken up. And when my job gets broken up, then whatever

I'm doing to steal right now, gets a little bit tougher, making it a lot tougher. So the easiest way to do this is just not to involve myself in any kind of devolution of my knowledge. And to dentists and let's face it, a lot of dentists are perfectionists or put another way set really high standards for themselves. And nothing appeals to a perfectionist like another person who thinks the same way. And when a staff member says to you, when I'm gone for the next two weeks on vacation, don't let anybody else process payments because they're only going to screw it up. That has a pretty strong appeal to a lot of dentists. Most thieves know they can fool you. It's back to what we said earlier about their understanding your habits and what you look at and what you don't. The word

that can really terrify a thief however is consultant. When you say to your staff, I think there's some room for improvement here and we're going to bring in a consultants. The thief is the one who really stomps their foot and says if you do that, I'm going to quit. And there are some consultants in the audience and I'm very sure that every one of them has a story about this. Where they said, they walk into a practice somewhere and more or less simultaneous with that, one of the staff walks out. The thieves, the person who will cut ethical corners, let's say that you're walking down the street and 50 feet in front of you is somebody and you see their wallet fall out of their pants. Most of us would do without giving it another thought,

as we'd pick up the wallet we'd chase that person and we'd say, here you drop this.

And a thief may do that too, but there are a couple of things that run through their mind that probably wouldn't run through yours. Like I wonder if anybody else saw this wallet fall. And I wonder how much money is in it. Again, the outward behavior might be the same, but the thought process is a little bit different. In a practice, this is often the person who patient-see is kind of the fixer. The person who can get things covered with insurance that nobody else can, for example. And the final behavioral characteristic I'm going to mention today is what I call that conspicuous display of honesty. And the best way I can put it is this. If somebody is really honest, they will have no need whatsoever to repeatedly draw that to your attention.

When somebody tells you or shows you how honest they are and does that repeatedly, that's a real sign of dishonesty. I was looking at a deposition that an ambassador had done a little while ago. So this is where an attorney is asking this person questions. And she said probably a- As sometimes in this deposition that went on for about an hour and a half, she would say the words, I swear to God, whatever came out of her mouth after she said those words was a big fat-wapping lie every single time. I suspect we all realize that if somebody is truly religious that they believe that one of their duties is honesty. It comes with every religion I've ever seen.

And religious people don't need to invoke the deity to show that they're doing what their religion already compels them to do anyway. But that's exactly what this person did. So those are some good and bezel-mett warning signs. Let's talk about hiring properly. And we mentioned early on that you're suddenly going to be in a place where you have more choices than you have in a little while. We did talk about this last week and I know a lot of you were there with us last week. I'm just going to zoom through it today. Next week we're going to spend a lot of time on hiring and the theme for next week is really how to find out what people don't want you to know about them when they're applying for jobs.

In case you can't make it next week, I'll just skim very through what I think a proper screening isn't feel free to compare this with what you do right now. I really want to see photo ID before I hire somebody because you know if I'm if I'm applying for a job and I have a bit of baggage that I don't want you to find out about one of the easiest ways to hide it from you is to take somebody else's identification. We need to talk to former employers and that's going to be a lot of our focus next week. It astounds me the dental practices that have the power to prescribe medications. Higher people without drug tests, which is out of step with how most of America hires certainly if somebody has financial responsibilities or quit in the future. Checking their credit is a really good idea. I'm going to mention that some states have restrictions on some of this stuff. They don't prevent you from doing it, but they may require it done in a certain sequence or they may limit the ability to check some of these things until the end of the process.

The other thing I'll say is none of these are an absolute red light. In other words, the fact that somebody has a bad credit doesn't automatically mean don't hire them under any circumstance. What it means is you need to understand why they have bad credit and based on that understanding decide if it creates a threat to your practice. The example I give of this is somebody who lives in a really big house right next to the golf course and this person and their spouse both both drive expensive cars. And they have bad credit that should terrify you because that's somebody living on what we call OPM other people's money. And when there are other sources of OPM have all been used up your next. So we need to be interpretive we shouldn't simply say you I'm not hiring you because you have bad credit we just need to understand and as I say decide whether the reasons for the bad credit pose a threat to the practice. In 2020, it's really easy to forge documents.

In 1985 it was really hard. But computers and the internet and everybody's logo online make it easy. So we should never ever accept a piece of paper as evidence that somebody is credentialed as a dental hygienist or an associate dentist or a dental assistant. The good news is that most most licensing bodies have their information online now and typically you can check online. Obviously we need to match this with the checking of photo identification. In other words, if we know who the person is then we can check their credentials. If we skip over step one then we're really not sure who somebody is. And if my sibling is licensed as a hygienist and I'm not all I have to do is give that person's identity and suddenly you believe I'm a hygienist.

We're going to talk about this a lot next week so I'm not going to get into it too deeply right now, but you can learn a lot about somebody from what they do on social networking. And I think if you don't look there in 2020 you're missing a really good chance to understand more about the person you're about to hire. And a statistic that should send shivers down all of your spines is this 65 million Americans, which equates to one and four adults has a criminal record. I think if you echo a comment I made a minute ago the mere fact that somebody has a criminal record doesn't mean that we shouldn't hire them. But it means that we should make that decision from a perspective of knowledge. And I was in discussion today about with with one of the. People who are in the audience about one of their former staff who ambezzled and you know one of the things that came to light very quickly was that person had a previous criminal record, which I suspect the doctor didn't know about at the time the decision was made to hire this person. So let's.

Gain knowledge first and then make decisions. Okay, so some screening again, I think most of you in the audience are probably looking at what you've traditionally done before you hire somebody and said, you know, it falls a lot short of this. It's a great time to close the gap and being in that favorable position next month and probably next year of having more choices is good.

Let's say you get to the point today or next week or next year when you suspect a businessman. The really important thing not to do is to let the suspect know that they're a suspect because the list of things somebody will not do when they think they're about to go to jail is pretty short. I'll talk for a second about the charming couple on your screen. The woman to your right is named Chante, join her Hickman. She works for a dentist named Dr. Albert Row in Ennerendell. So just outside Baltimore, Maryland. Shanty was in bezzling from Dr. Rowan. She thought she was about to get caught.

I'll mention incidentally that Dr. Row was a fairly slight man. He was about 5 foot, 6 and 140 pounds. So what Shanty did is she came back to the practice one night when she knew that Dr. Row would be there catching up on some paperwork. She brought her cousin, Dante Geter, who's on your left with her. Dante is about 6 foot 3 and 235 pounds. And the two of them overpowered Dr. Row dragged him into the patient restroom and beat him to death.

For that activity, these two model citizens on your screen got aggregate prison sentences of 40 years. And of course, Dr. Row's family got him home in a box. I'm very sure that I don't need to make this story any worse than it already is, but I'm going to anyway. The amount that Shanty had him bezzled from Dr. Row was later established to be $17,000. So if you're an embezzled, you need to do what happens next secretly. And this is not an infirmersial today.

We're here to give you knowledge, not to promote our services. But one thing I will mention is that when we investigate, it is 100% stealthy. And we go to tremendous lengths to keep it that way. And Wendy and Amber, I'll invite you to unmute yourselves here. And if there's anything you want to add, I'd love to hear from you. Anyway, it needs to be done in total secrecy and that's vital. And you simply do not want to use yourself as a guinea pig in a sociology experiment about the limits of human behavior when somebody thinks they might go to prison.

So now it's time for your homework assignment. We're going to give you a list of things to do in your practice. And I'm going to break them into a couple of categories. There are some things that should happen daily. We'll also talk about monthly. And here's the good news. The third set of things we're going to talk about are things that you can outsource. On a daily basis, the first thing is this.

If you have multiple providers in your practice, so I'm talking about you plus associate dentist, co-owners, hygienists. If you have an assistant who's doing things that are billable, the first thing that should happen is everybody should take a look at their own report for accuracy and sign off on it. The second thing is your front desk staff will print all those reports. What I'd like you to print yourself is a summary report of everything. If you delegate printing that report to somebody else, you lose control over the parameters

of the report. And I know that there are some dentists in the audience who have this mental picture of going through their entire careers without learning the first piece, the first thing about their practice management software. That software is at least as important to your financial well-being as your handpiece. And you all know that handpiece like it's your child. But you all look at your practice management software like it's written in some foreign language. And if you're in a place right now where you're more or less shut down,

this is a great time to get a little more conversant with your software.

But that daily report should really be one that you print yourself. And I want you to take a look at it and I want you to put your initials on it. So that's the one that you knew you know that you saw. And put it in a safe place and let's keep it for three years.

On a monthly basis, you need to do a little bit of a review. The first thing I want you to review doesn't come out of your practice management software. It comes out of your alarm system. And it's called the entry log or the access log. So your security company, if you ask them, will be happy to send this to you each month as a PDF. And what the entry log will tell you is whether anybody's coming into your practice at weird times.

The couple of minutes that it will take you to look at this each month. And it's not a lot of time once you get familiar with their format. It's time incredibly well spent on protecting yourself from embezzlement. The second thing I want you to do is I want you to review your receivables listing. AR here stands for accounts receivable in case anybody has that question. And I want you to go one further step. I want you to sit there with it and last month side by side. And what you're really looking for there is the things are aging properly.

So what I mean by that is if something was 60 days past do last month and it hasn't been paid, then this month it should show up in the over 90 day call. And next month it should show up in the over 120 day call.

If somebody is stealing depending on how they do it, often some weird things will start happening to your receivables. So something may show up last month and the over 60 day call them and this month it's current. That can happen. So you need to compare the two months side by side. It's not enough to simply look at this month and grumble about the people who haven't paid you.

There are three reports that come from your practice management software that highlight high risk transactions. I'm giving you generic names for these. In your practice management software they may have slightly different names, but I don't think you'll have a whole lot of difficulty going from what I'm how I'm describing them to what they're called in your software. And the three things that I really want you to look at are modified transactions. So that means something was entered as let's say a two-service composite filling and somebody

changed it to a three-service.

Maybe that's for valid reason maybe not, but those are those are risky. I also want you to look at transactions that were deleted and I want you to put special focus on adjustments. So most software has three separate reports that cover each of those. Print those off once a month and have a look. The other question is whether a month and summary of them. or adds up to this sum of your daily reports. If it doesn't, what that means is that there was activity posted on a Saturday or a Sunday or some other time

when the practice was closed. We have something called a monthly monitoring spreadsheet and one of the jobs it does is to answer this very question. It just does the math for you. So there's going to be an email that comes out around the end of today and it will have a link and you can click on that link and you can download that report, that spreadsheet. This is something, by the way, that we normally sell

in our electronic store, but today is about giving for us more than taking, so it's yours at no cost. Another thing that's going to come with today's email is something called the Embeslement Risk Assessment questionnaire. And I talked a lot about behavior and what Embesling behavior looks like. The Embeslement Risk Assessment Question

here is something you complete online. It takes, I would say, at the outside 15 minutes and at the end you get a score and the score will tell us and you how much a staff member is acting like they have their hand in your pocket. So it's a really good way to use something that's kind of happening a lot for things for other things these days to take the temperature of somebody.

The third piece of your homework assignment are some reconciliation and I completely understand any dentist who says I did not go to dental school to do these things. So they are great things to be outsourced. And I'm saying here outsourced as opposed to delegate. This should not happen, this should not be done by anybody who's working in your practice.

They can go to an outside bookkeeper to your CPA firm, to your spouse, if you have a spouse who's prepared to do these things. Or, of course, you can do them yourself. But every month, there are three things that need to line up with PMS and PMS here, in case anybody has that question, stands for practice, management software, not the other thing.

So every month, the practice management software needs to be reconciled against the bank account. Remember at the very beginning I talked about the accounting disconnect that happens in dental practices between practice management software and accounting software, that reconciliation is what brings those two back together. The second thing that we need to reconcile your practice management software with is what's

called your merchant account. And that's the account that is set up to take credit card payments in your practice. So that little terminal that sits at the front desk, that is tied to the merchant account. The third reconciliation happens when you use some kind of third party that does patient financing for you or payment management or something like that.

So if you work with care credit or lending club or green sky or somebody who does patient financing, or if you're an orthodontist, orthobank is a company that will collect payments for you. If you work with anybody like that, we need to square up the practice management software against those third party accounts. If we do not do these three things,

then money can fall through the cracks and you won't know it. So feel free to outsource. I mean, there are great dental bookkeepers out there. There are dental CPA firms who will do this as I say, if you're lucky enough to have a spouse who takes it on perfect, but it needs to happen. And it can't be done by your office manager,

your financial coordinator. Doing that is really like handing the keys to the hand house to the fox.

Ladies and gentlemen, thank you for spending some time with us. What I'd like to do now is invite Amber and Wendy to turn their mics back on. We will throw it open to question. Great Dave, I have a question that I think would be great for you to answer. We had a attendee ask. Why is it important for the doctor to run daily reports

versus the office manager? That is a great question. And the answer is this.

I mentioned before that it's not that hard to teach a computer to lie. We tend to assume that whatever it comes out of our practice management software because the software is expensive and it comes out on a nicely printed report, we tend to assume a veracity to that that probably shouldn't be there. So when we allow somebody else to print the report,

we create the possibility that it doesn't tell the whole story. When you print the report yourself, it absolutely does. So that's the answer. And I view day ends as being a bit of a team process. What I think should happen is the office manager should be printing individual reports, so that each hygienist, for example, can review what they did. And then the doctor should print her or his own summary report

to look at the whole practice. Amber, Wendy, anything you wanted to add there? No, I think that's that kind of ties into the next question that we have, what daily in my assignment, do you recommend for contract dentists, not practice owners, with no access to the front desk? So what times of the development should we look for? The kinds of investment is something

that I don't think we should answer in an unrestricted form like this because really anybody could have signed into this. For the person asking that question, and any other associate dentists who are curious, I'd encourage you to contact us and you can see our email addresses and website there on the screen now.

I'd encourage you to take that up privately with us. I think as an associate, you need to review that daily report. It's a little bit hard as an associate specifically to know about collections and what money comes in because most times you're cut off from that part. So you need to have a good look at your receivables. A danger sign is an associate should be

when somebody who owes you money is, for example, being seen by another practitioner in the practice, or being seen repeatedly by you, but the old balances aren't being taken care of. So as an associate, you really need to pay attention to who owes the practice money for work that you did. And I find sometimes a associate, you know, look at their production,

but they don't ever get their receivables list. Great. If you're another question, Dave, does President offer reconciliation services? No, we do not. That's something that's a lot better done by somebody closer to your practice, like a book either. No, it's not. It's really not something that we are set up to do.

I did see one question that I will tackle. And Amber, Wendy, did you answer the question about criminal records check in California? I did. Okay. Maybe that's, did you make a public answer? Was that a private one? It was private. Okay, maybe I'll make that public.

The question was, can you do a criminal records check in California? So there are some states, and there are about 15 of them that are called band-the-box states. And what that means is that you can do a criminal records check, but it needs to be done after you've made a conditional job offer to somebody. Okay. So the way it works in California is you do everything else, if you're happy, you make a job offer conditional on the criminal records check, then you do the criminal

records check. And what that means is if you end up not hiring that person, it is very explicitly because they have a criminal record. So what California has forced is that if you're going to make a decision on the basis of a criminal record, that it needs to be explicit. And you can't simply bury this and say, I'm sorry, we just found somebody more qualified. Okay.

That's what band-the-box does, but you can absolutely still do a criminal records check. And the other thing that is different about dentistry from a lot of other businesses is inherently, you deal with vulnerable populations. You treat children, you treat elderly people, you treat people with mental disabilities. And for those reasons, you are 100% justified in refusing to hire somebody because of the past criminal activity. So there's no question about the justification. In California, it's simply a matter of sequence.

Okay, I've turned on the questions, guys, so I can see some of the things that we're seeing here. Maybe I have a good one. Please. Someone ask, is the practice management software support team able to find and bezzlement? They may, but it's not their training. And we get a lot of referrals from support centers at practice management software.

Wendy Askins, and this wasn't mentioned earlier, Wendy heads our orthodonic investigation department. So she, her, her focus is pretty specialized among our investigators. And, you know, she's on a first name basis with the people at, I would say virtually all of the orthodonic practice management software companies. We have a lot of dialogue with them. They have no training for this. They're certainly not paid to do a complete investigation.

What they will tell you in some cases is, you know, you may have a problem and you might want to get somebody to have a look at it. Yeah, great question. Okay, I have another one. Is that okay? Can you talk, if a practice or business owner has a suspicion of investment? And how do they go about going to the authorities and what are their options at the end of that?

Like civil criminal? Yeah, that's a little about that. Oh, wow. Great, great question. I'll pat the person who asked that one on the back. The first thing is this, going to, let's say, your local police department and saying, I think one of my staff is in bezzling from me is going to be a very frustrating and unproductive exercise.

The police, this is a very technical crime and the police have no ability to do what's called primary investigation. That's what we do. So our job is to investigate to tell you what happened, which takes the form of a report. Once you have that report, that's what goes to the police. People forget this sometimes, but it's not the job of the police to tell you what was stolen from you. You have to tell them that.

And then from there, they'll make sure the law was the law gets applied. But if you just go to the police and say, I think somebody stole from me, they can't help you. And I know I have many stories as I suspect Amber and Wendy do about people who tried that and it just didn't work. In fact, even if you go to generic fraud investigators. So these are people who work for CPA firms or maybe are on their own. And they investigate fraud ads, drug stores, and maybe they do medical doctors, and probably

help restaurants if they're generic fraud investigators and they don't specialize in dentistry. It's kind of like me going to my next or neighbor who's a cardiologist and saying, do you think I need a root canal on this to specialization is really important in getting results from this whole process? The other thing I'll mention, in addition to the justice system, almost all of you have insurance coverage for this and the typical amount that most dentists have is $25,000. So if you're stolen from, you can get that amount back fairly easily. Somebody was asking about civil versus criminal.

So just to give people the basics of the legal system, it's kind of divided into two parts. Criminal law for which the punishment is typically jail or something lesser and civil law. Civil law means I'm suing somebody. In general, suing people for investment is pretty unproductive. First of all, most of the thieves and it goes back to what Wendy said early on. Most thieves are at least as good at spending it as they are at stealing it. So they tend not to have, you know, $800,000 equity in a house or a great big investment portfolio or something like that.

They're spending it on trips or if there are those, those needy people who Wendy mentioned they're buying groceries. So suing them and paying an attorney to do that tends to be pretty unproductive. The criminal justice system is funded by the government and it's much better to let it do the job. And normally at the end, you will get what's called a restitution order. So this is an order by the judge for this person to pay you back. Now, whether or not they have money to pay you back is an open question, but it doesn't

cost you anything to get there. So our recommendation in most cases. cases and their exceptions, but in most cases, suing these people as unproductive, lets give the criminal justice system the fuel it needs to do its work and then step back and let it happen. All right, what else do we have, Amber?

Let's take a look. Well, I'm sorry. I mean, it's awful questions. So, several people had asked if we recommend one type of software over another, is there one brand of software that is safer? And also that audit logs. Yeah, so audit logs may be all take first.

So every piece of software has this thing called an audit log or an audit trail. And what it does is it captures every line item that happens in practice management software. So, if somebody's in your practice for a hygiene appointment, there's about a quarter of a page that's the audit log for that, because it will capture profite, fluoride, scaling,

radiography, patient payment, insurance payment, and probably a few other things. The problem with the audit log is just how big it is. So, if you're a one-dannest, one hygienist, general practice, and you get the idea that I should print out the audit log for last year, you better have about 6000 pieces of paper on hand and a whole lot of toner for your printer. So, looking for something in there is kind of like

looking for the key that you lost on the golf course. And there are better places to look. And the things I mentioned, the adjustments report, the deletions report and the, I forget what name I call it now. Adjustments, deletions, and amendments are, they capture kind of the high risk end of the audit log. So, I'd encourage you to look there first.

In terms of practice management software, here's the basic problem with every piece of software. If I have your password, and none of the safeguards that are built into that software will apply. And last week, when we talked about things to do, one of the things we said to you was, change your password, because most of you probably haven't done it in, well, since Clinton was president,

and you have to do it. If your password is compromised, and somebody can log in as you, then they can do anything in the software. And you really just can't stop that. So you need to change your password. And you need to change it periodically, because it's likely to become compromised again.

If I'm a thief and my user privileges in the practice management software won't let me do what I want to do, then my work around is get your password. I'm not gonna talk here about how it happens, but it happens a lot. So that's the problem with software. Thank you. Here's a question, Dave.

How do you check for social media? What's the best way for hiring? That's something we're gonna talk about next week. So maybe I'll keep people in suspense for seven days because I can. Okay. I'm gonna tackle the one that's asked about dentist versus dentist and bezelnut,

because that's a really good question.

It is, you know, a lot of us understand that a staff member could steal from us. It doesn't cross the mind of a lot of dentists that a brother or sister dentist who shares the same level of education and the same code of ethics might steal, but it certainly happens.

And, you know, we have that prosperity, we have typically about 110 to 120 open cases at any point in time. So those are cases that are being worked on right now by us. Usually about six or seven of them are

what we call fracturized cases and really that means where the dentist is, where the suspect is a dentist. And when you think that it's a relatively small percentage of dentists, I think it's about 25% of dentists who practice in group practices, that's a pretty high number. And Wendy, I'm gonna give you, I'm gonna make you chuckle because I'm gonna reminisce about a case that you did.

And the way that this case started, let's do. The way this case started was I got a call. And the person calling said, I'm a specialist, I practice with another person of my specialty. And we have this unwritten rule where when patients pay us in cash, we just put it in our pocket and we don't report it to the IRS.

But the reason I'm calling you David is that I think that my partner is stealing more than I am. And it's not often I'm speechless, but I really didn't know what to say to this. Anyway, he ended up hiring us. Wendy was the investigator. Wendy, why don't you tell us how this ended up? Oh well.

Okay.

It did end up that actually, one practitioner was stealing more money than the other practice owner, which ended up being our client, not just through cash, but also through some payables and billables and supplies. And it was really, really an interesting and sad case. So it was confirmed in equity, if you will. Yeah, and they let the lawyers help them sort it out.

Yeah, needless to say they're not still practicing together. Oops. Hey, David, I have another question. If we still have time, someone is asking about third party billing sources, such as, yeah, absolutely. How do you verify those companies? And how do they fit in the scheme

of blocking investment? They can help quite a lot, because what they create for you is separation of functions. One of the dangers in a lot of practices because they're very small businesses in terms of the number of administrative staff is that you have one person or two people or three people who receive the cash, record the cash, reconcile it.

And it's relatively easy for one person or possibly a couple of people in that group to get together. steal. When you go to the companies where you outsource this, now you do have some separation of functions. The recording of stuff has done independently. So I like them for that reason. And we get a lot of calls from these people who say, you know, I'm working in a practice in PRA wherever and, you know, something's not adding up. The other advantage that I see for this is that it takes one of the most technical tasks that your

front desk people perform. And it outsources it to people who specialize in exactly that task. So it tends to get done better by them and people like EASIS, and I'll mention them specifically here, will do things like follow up on unpaid insurance claims. And, you know, if an insurance company in the company, and then you mark something as paid and it hasn't been deposited at the office. EASIS will trace that. And there are certainly other companies in that space. I mentioned EASIS because they're the biggest. EASIS have, and I've lost count. I spoke at their annual conference last year, and they had at that point 350 odd team members doing this. So they're pretty big in their, in general, I think they do it pretty well. But, you know, when you're hiring somebody for a front desk, if you take that most technical part out of their job,

it makes it easier to find somebody who can do the rest of the job well. And, you know, one of the things that I've said to a lot of dentists over the years is you might want to think about hiring some people outside of dentistry because often it's easier to find the personality attributes and stuff that you want if you have as broad a search as possible. So, yeah, we're, we're a big fan of those. We think they gain you some, some investment protection, but also it simply makes the, it, it, it makes the whole task of, of staffing your front desk. I think a little bit easier. Great. I see a question up there, maybe all tackle. It says, is there software to install in our practice management software to look for suspicious transactions? There really isn't. And the, the, the problem with that kind of approach is that, looking at only your software and nowhere else for investment is unlikely to bare fruit. We have to remember that the purpose of software is to capture some real phenomena that are happening. I mean, on the one side there's treatment happening and on the other side there are payments.

And when you ignore those and just look in the middle, it's a, it's a little bit difficult to come up with any conclusions. And, and Amber and Wendy both spend, you know, all day with their heads in software and I think I'll get affirmation from them that you need to look at other things too. And, and therefore, you know, that the sort of fraud detection software that, some people have tried to come up with over the years just doesn't work very well. Yes, I agree. It's not a full proof way of knowing everything that's happening in the practice. That's it. You just can't, you just can't raw definitive conclusions from software alone. All right. I don't have a question, but John thinks for a really smart. John, thanks for really smart thinking.

We've had a little practice of this. Here's a question all tackle. Sounds like you're a Canadian company. What percentage of your clients are from the US doesn't matter that you're Canadian? Nothing personal. I have lots of Canadian relatives. Yes, I'm Canadian. I'm speaking to you from our head office in Halifax, Canada. You will notice that the, the two team members with me are both coincidentally from Texas. They happen to live about 45 minutes apart. Our head office is in Canada. And what that means is that our, our admin staff are accounting our IT team are all here in Canadian. And before anybody asks me. Yes, I do play. I talk about. 85% of our team live in the US. 94% of our revenue roughly comes from the US. So yeah, we're, we're a Canadian company, but we are totally equipped to help US clients. We also do a little tiny bit of working Australia if that happens to matter to you.

And I'd like to thank my terrific collaborators for this because this, I know I did a lot of the talking, but this was was very much a group efforts. I'd like to thank Amber and Wendy who are terrific members of our team and we'll see you all back in seven days. Thank you. Thanks for attending.

Thanks for listening to the dental practice owner spotcast. Brought to you by Prosperidant. You can contact Prosperidant through its website www. Prosperidant.com or by calling 888-398-2327. If you have questions about this podcast, if you would like to discuss your practice, or there is a topic you would like to see in a future podcast, we would love to hear from you. Amber, Wendy and David will be back soon with another episode.