What To Do If You Suspect Embezzlement

Auto-generated transcript: What To Do If You Suspect Embezzlement

You are listening to the dental practice owner's podcast. Brought to you by Prosperident. From our unique perspective as dentistry's and bezel-lit 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've got a lot that you can join us. What we're going to talk about today is picking up the pieces and what to do when the unthinkable happens. When you become a victim of imbezblemist and fraud happening in your office.

So today's topic is going to be really interesting. We're going to share information and stories for those of you who maybe haven't experienced this yet. So that if that day ever comes, you are prepared to know how to prepare yourself. Thank you, Amber. Hi, Dave. It's good to see you.

I think to see everyone else that's joined us today. I am so excited about this topic. Having worked with so many clients and walked them through that moment in time when the unthinkable has happened to them. And they find out that someone has been and does link from them. And they're just totally confused.

And they've got all of these thoughts whirling around and they're had, what do I do? Where do we go? What else is going to affect my family and my business? Today we're going to get some of those answers to you. We're going to walk you through what happens when you first become suspicious? What happens when you confirm your suspicion?

And how you confront. So from suspicion to confrontation, we're going to walk you through all of those. We're also going to walk you through the avenues of restitution that are available, but similarly and criminally. And we're also going to talk about how to manage your personal and your business reputation.

Because after you become the result, that's also very important to how you, the messaging that you control the message that goes out from that particular experience. When you have that sinking feeling, and you wake up in the middle of the night with a start and suddenly it becomes clear that maybe that trusted staff member of yours isn't so trustworthy after all.

The first thing I'm going to tell you is that when you have that feeling statistically, you're right about 70% of the time. Trust your instincts. When I get talking to doctors who call me and have that suspicion, one of the first questions I ask them is this, let's say hypothetically, this person is not still. How do you feel about them otherwise as an employee? In other words, would they keep their job or not if

the measurement was now? And sometimes, then this will say to me, you know what, they're far from my best employee anyway. So I think if they're not stealing, they probably don't have a job here. And then one of the things that I say to them very quickly is, well, okay, so if they lose their job if they're stealing and they lose their job if they're not stealing,

this might be a time to look at firing. In other words, why wait until the end of our investigation they'll live that person go? Sometimes having evidence of a measurement is helpful in getting through the termination process without, for example, getting sued. And if that's the case, then firing now may not make sense. But if you have an employee who is fireable now,

and you're not happy with them, and you also think they're stealing, well, let's just do what's gonna happen anyway and get them up in order. The next thing I'm gonna say is this, if you have suspicions about somebody, it's really vital that you not let that person know that you have concerns. And it was a case where there was a murder.

And this happened in Annronville County, so just outside Baltimore, Maryland, and somebody named Shantay, Dr. Hickman, ended up murdering her doctor because Shantay thought that the doctor was gonna catch her stealing. And I mean, this is a, this is a terribly tragic story. And what makes it even worse than it would be otherwise is that they amount that she had stolen was $17,000.

If somebody's going to go to jail, you know, the list of things they would not do to prevent that from happening's pretty short. Now, thieves don't always think things through. If somebody's embezzling from you and your practice burns down, they're gonna be the number one suspect. I mean, they will get caught in punishment, but that isn't necessarily consistent with how they think.

Here are some of the things that doctors do when they suspect an investment to get them caught or get them uncovered. The first one is you go to your receptionist or your office manager and you ask for a whole bunch of reports you've never asked for before. And then the next thing you do with those reports is you take them into your private office,

you close the door, you phone your CPA and you spend an hour on the phone your CPA. If I am a thief and I'm stealing from you, every morning when you come into the practice, I look at you and I ask myself the question, does she know that I'm stealing? And anything like kind of actions I'm talking about here will cement in my mind that you are.

Of course, one of the cardinal sins here is to bring onsite investigators. One thing, if you've been watching our webinars that you know about us is that we do everything we can to avoid setting foot in your practice. And almost everything that we do is done at a distance. And the internet is very much our friend in that. But onsite investigators,

you know, it's very hard to stick a geeky account and looking person in your practice for four days and claim that they're there to fix your compressor.

So we don't want to do that. And we're going to talk a little bit later about confronting the suspect. Certainly when you have suspicions or even discovery of investment is way too early to confront a suspect at that point. You need to know a lot more than you do at that juncture. And all you're likely to do if you're in the 70% who are right

is tip your hand prematurely. And if you're in the 30% where they get suspicious and it's not true, then you're going to ruin a relationship within a place. So there is a time for confrontation. but it's not early on. And we all know that Dennis love to fix things quickly. This is a case where you really need to be a little bit patient.

So if you do kids somewhere, someone red handed, just like you were talking Dave, you can't let your emotions get in the middle of it. So this slide's kind of talks about a childhood story that we're also familiar with Pinocchio. Pinocchio has celebrated 80th anniversary this year. And going back to the thought of Pinocchio, this is where, as a practice owner, you can really get your lesson on honesty. So in the story of Pinocchio, every time the situation rose, the story always changed. But when you catch someone red handed, this is when you have to have your ducks in the row and have everything ready to prepare for the termination. So the main thing is do not be angry and have everything lined out and don't let

the suspect be involved emotionally in the conversation that you're going to have with them. At Prosperiant, we have a termination checklist. Even if you don't have our termination checklist, make sure you have everything in writing. And like I said, the business side of your conversation is not going to change. Make sure all of your communication when you catch this person red handed and not kind of just remains very business like, very structured, because this person is going to play into your emotions because the developers have a relationship with them. So don't play into being Pinocchio for them. At the interview, make sure everything is scripted and your objections are clear. If you do receive a confession, you want to make sure

that it's very clear and concise and it ends in a business like manner. And then the main thing is is you want to make sure at the end you're going to proceed with an investigation. We're going to talk about that more later and the importance of an investigation. But there's several reasons that need to make sure this person knows that they're not going to get away with just their nose growing. So let's talk about a relationship with law authorities. When something like this happens, it's best not to confront or not to ask social media lawyers what the best thing is to do. So I love social media, but Jason put up an example of this was actually on a devil face the page or yeah, don't face the page in which David, I were actually those involved in trying to

educate the people that were on there because someone, number one, had posted, I think someone from my office is stealing. And this is one of the ridiculous comments that someone wrote. I mean, not only is the grammar atremsious, but there's falsity in every single line or every single concept that that person wrote. Now, I'm sure they weren't trying to spread bad judo or whatever. They just didn't have the knowledge or the experience to be able to give an educated comment on how to handle the police. This is just so much wrong with that statement. Sorry, but you just got a laugh at it. It's, um, wow. Anyway, okay, let's go. First of all, the police are not just saving their waiting at the door for you to come in.

This is not an easy crawling to uncover. It's very technical because remember we're dealing with dental accounting and we're also dealing with your practice management software. Now, if you have, if you live in a large city and you have the financial crimes unit within your police department, that may be something a little bit different than in a very rural area. But it's a very complex crime. If you want to go to the next one, there we go. One of the things that I have always found in working with my clients is that once my clients go to the police with the report that we've written for them, I always try to contact the detective that's working on that case to go through all of my case files and help them to understand exactly what happened. Case in point that

sometimes the police are hesitant to begin the initial investigation, but if you have all the information to get to them upfront, then they'll be more than willing to take that on and process it as a secondary investigation because all they have to do is go back and double checking, make sure that the work is correct that we've done. Case in point with that, we had a case in New Mexico where she was in young detective and she had been a bee cop who was on the street in the Indiana family violence or domestic violence calls. She was doing domestic violence one day, the next day she was the detective in the Indiana financial crime. I love this woman because she just called and spent hours on the thing with day, hours on the phone with myself and she was just

flat on honest and she said, I don't know what I'm doing, I'm willing to help prosecute this case or send it to the DA, but you guys are going to have to help me write the charging papers, the charging papers that you take before a judge so that you can get an arrest warrant for the suspect. So we helped to her along with that. I mean, on the on a side note it was very unfortunate for everyone involved because that suspect ended up committing suicide the morning before the police showed out to arrest her that afternoon just to not to go down a trail. But again just to emphasize has serious and bezzlement is and the serious consequences that come along with it. The police, when you go to the police they're going to want you to bring a packet with you basically that says,

this is what was stolen, this is how it's done, here's every transaction that was manipulated and then they'll be willing to take that on and work with you. And another Our issue we also deal with is when we talk about police officers, not really understanding dentistry or some of them don't even really understand the crime, effect and how it's committed. Another issue is that sometimes the DA, the prosecuting attorney doesn't understand it either. In some cases you can take the report that frustrated and has written or if you've written them report yourself, you can take that and you can go straight to the DA and you can buy collect bypass the police. So that might be an easier way to get around it if you have

to correct information. Yeah, and that can take years off the amount of time that it takes to bring somebody to justice as well. Whether you can go directly to the district attorney or you need to work through the police really depends on how completely information is, how much evidence you've been able to gather and certainly if you're in that situation that's something we can help advise you on. Well, that's not about confessions. Confessions are wonderful. If the thief is going to spill their guts to you, it has tremendous value.

First of all, that guarantees that there's going to be a criminal conviction. There's some kind of, there are some kinds of stealing that are hard to prosecute. And one of the ones that is the prosecutors nightmare is payroll fraud. So picture a scenario where you have delegated payroll to somebody in your practice. And that person has used their authority with the payroll company or a pay themselves to make a payroll conviction stick in one of three weeks. You either need really clear documentation on how much that person was supposed to be paid. So something like a employment contract, which lets face in a lot of you don't have for most of your employees.

Or you need some kind of deception from that person. You know, where they've actively concealed from you what their paying themselves because people wouldn't do that if what they were paying was legitimate or you need a confession. So confessions have a lot of value in the criminal conviction. Also a lot of times somebody will, somebody's confession will help make the investigation go quicker and more smoothly and possibly less expensive. Just before we met, I have him running, we're talking about one of her clients who's on the call tonight. And in this particular case, the thief suddenly feeling some remorse, I'll say, as awkward to cooperate in the investigation, and remember, and I were sort of mapping out some areas where, you know,

Ambers plotting slowly and could use, you know, the person who did it saying, this is what I did. So it does help the investigation. The one thing I'll say about confessions is that when people confess, they're not usually doing it from a feeling of guilt, they're trying to minimize consequences. So what they tell you is not what actually happened, they will tell you the minimum that they think you will believe. On average, when people confess, they confess to about one sixth of what they've actually solved. So if somebody confesses that they sold $40,000, the chances are really good that they took a heck a lot more than that. But that's what they think you will believe. If that confrontation is happening with the thief and there's a possibility of a confession.

There's a way to do it. And you know, this has to be carefully set up. This is not something to do on the fly. The best question that you can ask a thief is, I'm not asking you if you did it, I know you did it. What I want to know is why do you did it? And most thieves go into that meeting prepared to deny denying denying denying. And when you put it to them that way, that kind of shuts that out and down and kind of puts them back on their heels a little bit. And actually I'm going to show you an interrogation video. This is actually police interview and murder suspect in a minute. The video goes on for a couple of minutes, but these are skilled investigators and you'll see them do this. And they get this guy and to kind of start walking back with the story.

And at the end he confesses. So you'll see them do it and you'll see that question come out very clearly. If somebody's going to make a confession or if you want to be first of all, it could be in writing it could be oral. If it's an oral confession, it should be recorded. And ideally video. If that's not possible for a lab reason, then audio second best. The advantage of video is that it means that there's no question the most whose voice it is. You know, if we only have a lot of the things you have to establish in court, that's the audio of the suspect. If it's recorded, the first thing that needs to be on the recording is, do you consent to me recordings? And the person who's confessing saying yes I do.

That needs to be there. We also want whether it's a written confession or a verbal one, we also want somebody to confirm that it's volunteer. That they have a main course that, you know, they're making this in their own free will. Then of course they need to talk about how they did it and when. The other thing that we always look for in confession is what's called moral justification. That's where somebody explains why they thought it was okay to do this. And if it's a written confession that needs to be signed. There needs to be a witness present who signs the witness.

It's totally fine for you to be the witness. There's nothing kind of pretending you're from doing that. So I'm now going to play this little video. I mean, it lasts a couple minutes, but watch the questions the police ask here and how they. Get this guy to start starting back in on a new story. Give me questions for me before. Why am I under suspicion? Is it just my car or is there anything else?

I mean, that's, you know, a large portion of me is very unique car. Like Senator Toras is just for the car. Yeah, so we can do it. Look into it, we can of course to find. And of course you could also turn around and it's on already completely. I mean, I would have a very rare car. We want to, we want to stand wide. We want to stand wide.

You stop through a pick road. Was it to give a ride? Are you afraid to tell us that you gave a ride, maybe you want to make a couple of bucks as an Uber driver? And she told me I had to go get, I had to go sign a lease at one North New York line or that's that. I'll drop you off. If you're afraid to tell us that you gave a ride someplace, we can work with you. But I know that you kicked her up. I know you did.

I saw you in your shirt. Arms fully extended. I took a take a camera look. I don't know where. Yeah. I saw her picture. I don't think it was her. Do you remember the girl's name that you picked up?

No. It was a very dark and English. Okay. Tell us about what happened. What's on the date was that? Early up in him. I don't remember. Okay.

And that's all it was. And that's all it was. I started driving north and she said something like turn left after a couple blocks. Maybe she said something else. That's really what she started freaking out. And so I'm going to go to the car. You know, trying to pull in the door. It's locked.

I'm going to go out of the box. I'm locked. She's going to go. Does it? If I recognized her, I would have told the agents that came on Monday or Tuesday whenever once. I was okay. Like, because I'm a chruthness.

Um, I picked up an agent girl. I thought she was locked. You know that I know that you didn't drop her off in that neighborhood. You know that we can follow her phone. Okay. So where did you drop her off that? Where did you take your friend? Where did you come from?

Tonight. And then he confesses. And again, those were two pretty good investigators. You heard that question come across clearly. I wanted to lie you did it. And the guy's story kind of slowly broke down. You know, you've got the confession from the thief from the person who stole from you. So a lot of times, many of you will, many doctors will want to settle.

And the main thing with this is you want to have professional assistance. I have a personal story about this. Um, I had a client that wanted to settle. And the more we got involved with this, I realized it was kind of like building a house on plan. Looking in, they thought it looked really solid. It was a great foundation. She admitted, let's settle. Let's get get this done in over with.

But just like sand with winds and weather, that foundation will change. So if you don't have that professional assistance and you're not going about it in a professional way, when you go down the route to settle, it can become not very stable. If you do decide to settle and the thief offers you money, you need, you need to make sure that you don't offer anything in return. Because you don't want your foundation for your future. Um, possibilities of getting insurance to become not stable. Um, if you do not have professional assistance and you don't go about it the right way

and have a good foundation for yourself, it will compromise your ability in the future to claim deficiency with the insurance that you have. In my story, this is what happened. The doctor agreed to settle with the suspect, the suspect. And instead of keeping the wording clear and concise, they offered, you know, we're done in this matter. So, um, the end result was it really compromised their ability to, uh, get re-enverse for a big portion of what had occurred in their practice. Moving on with the federal, you've got to think about extortion, Dave.

Oh, that's me. Maybe I'll just dwell on the insurance deficiency for one second hammer in case that's not clear to people. So let's say somebody steals $70,000. And they come back to you and say, look, I'll give you $50,000 if you, if you call it squirt. And you agree to do that. What you can't do then is go back to your employee dishonesty insurance and claim the other $20,000 because when you settle with that person, you extinguish the balance of the day. So at that point, you have no loss at least current insurance purposes. You certainly do for economic purposes, but you have, when you settle with somebody, you say, that's it, you know, the balance is extinguished. Then you can't make the claim.

But let's talk about extortion because that's a trap that people fall into sometimes very quickly if they're trying to handle this themselves. The first thing I'll say about extortion, which is called blackmail in some states, is it's a felony. And punishment is very, but 15 years is not uncommon in states. We all understand the concept of extortion from the movies. You know, when the loan shark says to you, you know, unless you pay me back, by five or plocked more, I'm going to break both your kneecaps. We all understand that that's extortion. The statement that's on the screen is also extortion. You know, if you pay me, I won't press turns. And what you're doing there is you are threatening somebody with criminal punishments unless they repay. And the, the irony of extortion is when you threaten to do something that is perfectly legal in and of itself, it can become extortion.

In other words, if somebody's fallen from you, you're quite free to report that to the police or take your case to the district attorney. What you're not free to do is to threaten to do those things unless somebody pays you. And that's, and that's excursion. And again, if people are handling this themselves, they just don't necessarily understand how the weight is my view. And it's very simple. It's illegal to use the threat of criminal action from what did you're eating.

So that's the trap. The settlement filed that Amber was was dealing with. Thankfully, she was able to keep them out of this one, but they, they didn't get a surprise when they thought that, you know, the amount they didn't get back to the thief, they could claim on insurance and resume. Sorry, you can't. Let's talk about criminal prosecution. So what I hear a lot of people say, even some of my clients is, I want her for any jail. I want her arrested and threatened jail locked up with rest of her or his life. See Amber, I knew she wouldn't say yes. I don't know. You know, I thought about it, but I just know it. Anyway, Dave, you own the company. So it's okay for you to say yes, but it's not okay for me to say it. Oh, she said it. We got it.

I don't know if I'm texting. I'm not easily offended.

Oh, now I lost my train of thought. Okay. Anyway, so here's the key. We've already kind of talked about it a little bit. It's really got your choice. Now you can go to the authorities and you can present your case and you can file a police report. Where that report goes from there, you have no stay over. If the district attorney or the assistant district attorney that has a stay on if the state or if the government chooses to prosecute that case. If the state or the government chooses to prosecute that case, you don't have to pay for an attorney. Now, I do have some clients that will hire an independent attorney in these cases just to look out for their own best interest and to follow the court case through the system. For example, in a plea bargaining situation, they might need an attorney to help negotiate with the DA what they're willing to give up and what they're willing to get back. But the point is, is that you don't have to pay for prosecution as you wouldn't a civil case.

And then also the punishment for the crime depends on the amount of the crime, the amount of the theft and the state that you live in. So for example, we have some statistics from California. So you can see there what the legal aspect is in California now I happened to know in Virginia. You know, I have a and of course, the taxes. I have clients and the laws that govern that say are a bit are different. And I had one case that was charged with eight felony counts because the state of Virginia counts as sort of amount of money per average six months. And if you reached that within a six month time period they charge you with a felony and then they move on and if it continues on the more felonies that you rack up that's how she ended up with the 12 year jail sentence. So it depends on on what state you're in as well.

Yeah, and the other thing that sometimes people don't think about with investment is that it depends how somebody steals but in a lot of cases. Inbezzlement also involves breaking federal and there are two federal laws that a lot of investment catches and they're called wire fraud and mail. And wire fraud involves some kind of fraudulent action using electronic transmission. So an example would be if I submit to an insurance company a false insurance client that would be working. If I took the same claim and I printed it out and I'm milled it to them in a paper format that would likely be mail for it. So a lot of investment breaks federal law. And then the question really is, well, can we get somebody federally prosecuted the thing I'll tell you is that the FBI and the other agency that prosecutes some amount of investment is the United States Secret Service. It takes about a quarter of million dollars to get them out of it. You are in Bezzlement and it's a big dollar case. And by all means you can approach one of these agencies. Again, as Amber said earlier, they really don't have the ability to do primary investigation. They kind of need somebody else to do that for them.

But once they have our reporting their hand, they can run with it very nicely after that. A couple of things to know about federal prosecution. The first is the range penalties is much higher. So wire fraud and mail fraud both have maximum penalty of 20 years in prison plus a quarterly dollar fine. So, you know, when you compare that to what could happen, for example in California, it's more than double. And a lot of people get this wrong. There's a there's a provision in the United States Constitution that says that people will not be tried twice for the same project. So the double jeopardy provision which which mostly is probably hurt. So it's likely differently to that. The interpretation is that you cannot be tried twice for the same offense. So if you do something in a breaks state law and it also breaks federal law. You can be prosecuted for both the double jeopardy provision doesn't forgive that because they're different offenses. I mean it's a measurement or largely at the state level. It's wire fraud or mail fraud or the other one that sometimes is is try to do it by defense is something called Rico is basically an anti organized crime statute, but it does get used that on an investment matters as well. It's the racketeering influence and corrupt organizations statute. So we do we do see that one occasionally. But if you are the victim of a significant investment. One of the things that we want to discuss with you this. Can we make this into a federal.

Once again another one of my favorite topics. A lot of people don't realize that they do actually have insurance for employee theft. If you know I always like to give the example if you were to have someone break into your physical office and you know still your combing machine or machine or whatever. You would file an insurance claim for that. Employee dishonesty is exactly the same. It's generally around $25,000. For example I just spoke with a client last night and less is hard. I've found about $60,000 in investment funds and about two hours of looking through the database. So I called him to give in the bad news and I said, you know, get your insurance policy out he said, oh, no we don't need to do that. I don't have insurance. And I said do me a favor just do me a favor even if you don't believe I'm right get your insurance policy out call your agent and look for it sure enough. He called me back this afternoon and he said, oh, you're right. We have $25,000 worth of coverage. Well, I know everyone watching is really smart, but this we're all in dentistry. together, right? I found 60 just in a short time period, he has $25,000 worth of coverage, right? So there's a huge gap there. What I recommend doing is increasing the amount of your insurance policy. There usually are 25, 50, 75, or it can even go up to 100 or more. I recommend a minimum of 75, if not 100, 100's better, because when you find it, you're going to need it.

And it won't cost that much more to increase the maximum payout for that. Can you go ahead and bring out the end of that? Because I'd like to just kind of go off on a tangent for a moment in how the insurance companies work. If you're thinking that insurance coverage or employee to soundstee is like fighting the insurance company to get your dental claims, covered or paid, yeah, you'd be exactly right. That is it's very difficult to go to that and fight them. And that's why I love this because we're good at it, or I'm good at it, I'm really good at it. First of all, it's kind of a gap's 22, because your insurance company requires you, and it says in their paperwork, they require you to notify them as soon as you know if that just happened. So you call them and you notify them and then they tell you, oh, you have 60 days to file the paperwork, or that claim is going to go unactive, right. So they try to make it sound like you have 60 days to get all your paperwork together. Some insurance companies that I've worked with, they send you a list that's three pages long, a document that they require from you to prove that that's just happened.

Anyway, so they're going to give you 60 days to do this, right. And, you know, especially in dentistry or outspeed for work at dentists, or in orthodontics, you know, we have let's say we had monthly payments of, you know, 155 to 200 dollars in cash each month that's coming in and that's a whole lot of transactions to have and a whole large database to have to go through 60 days is a short amount of times to be able to do that. So I just want you to know that it probably you can file for an extension and they'll keep it open, they'll keep it inactive, the open for sometimes around 24 months. A lot of them will require that you file a police report and that you, they've, what's that word I can't ever think of. What's the word? I might need a hand here. When it when it is, is it's satiated with the insurance.

It's a summer gate. Yeah, summer gate. Now, I never get it. We're moving to that word for some reason. Anyway, which means that they they'll pay you and then they'll go get their money because you're handing it over that to them to go and get their money from the suspect.

One last thing I want to mention is that there are some insurance companies who will take the report and they'll take your documentation and they will actually send it to an independent forensic accounting firm. For the theft to be verified and if that happens, it can take six to eight months to get paid back or to get that money back for them to pay out on the claim. So if you have any questions about insurance claims for employee dishonesty, I love it. It's a challenge, send them to me and I'll be able to help you out or I'll be glad to give you something nice.

So insurance is the first place you get money back and that's relatively speaking the low hanging fruit. But as as Wendy mentioned, most of you are probably sitting on a policy to accomplish $25,000 in the average step that we see is over $100,000. So what about the rest of your money? Well, there are a few options here. The first one is that if the thief was picking your checks and cash in the room, then you can make a claim against the thief's bank. And this isn't the way that theft happens in every case, but if it does you're in a pretty good position because it really doesn't matter how much or how little money the thief has. If their bank has an obligation to you, then the bank can certainly pay that. So, you know, if it requires a specific pattern, but all things consider this is not a bad place. After that, where do you go? Well, the first thing that a lot of clients ask us is, you know, should I sue the investor? And my answer usually is probably not. For a couple reasons. First of all, these people generally are really good at spending money.

And, you know, they spend it in places that don't produce enduring value. They go on expensive trips, they buy fancy clothes, they get cosmetic surgery done. I had one dentist where the staff member had gotten a breast augmentation. And, you know, he wanted a sewer and I said, you know, I'm not absolutely sure what you're going to do with two slightly used bags of silicone. And he didn't really have a good answer for that. There are a couple of problems with, with suing. The first one is you can win but lose. So, let's say somebody took 150,000 dollars from the Union. Well, it's probably going to cost you 20 to 25,000 dollars in legal fees to sue. So now, you've increased your loss to 175,000 dollars. You win. But the next thing that you've done two days later is the clear bankruptcy. And when you need a clear bankruptcy, what really happens is that you end up more or less extinguishing your death. So if you have no assets, begin with bankruptcies, really easy and paying less than you do. So now what all you accomplished through that will process, but you took 150,000 dollars in the loss, you made it to 175,000 dollars. Because your attorney is still going to want to be paying. And the other issue with losses is there's a law called a racer, which is the employment retirement income security act.

And what a racer says is that retirement savings and one of the most common types is a 401k is exempt from seizure for a death. Let's say you sue some way and you win and value looking for $175,000. And the only asset they have is $200,000 in their 401k, you can't touch it. In fact, they can declare bankruptcy and wipe out your debt and keep the 401k. So for all these reasons, in general, and there are exceptions, but in general, lawsuits probably aren't your best way to get money back.

The better way is when somebody gets prosecuted criminally and when he was talking about that a minute ago,

excuse me, is to ask the judge to give you what's called a best-retentioner. So this becomes part of somebody's sentence. And it's very routine and investment cases to get this as long as you prod the district attorney to ask for it. So now, this is part of somebody's sentence. And what the judge will say is I,

or you to pay the victim back $150,000. And if you have assets now, we will see some. If you don't have assets now, when you get out of jail, we're going to garnish your wages in the 30% of your wages will be going to this. A couple of the benefits, first of all, this doesn't cost you any. I mean, this is part of the criminal process

that as Wendy mentioned a minute ago, is paid for by the government.

You can go after prosecutions of crime or what are called substitute assets. So somebody steals money from you and they buy a bowl with it, you can go after the bowl. They steal money from you and they give it to their spouse and their spouse by the boat, you can sell the bathroom bowl.

And this is important, it's survival bankruptcy. So somebody gets a restitution order for $150,000, they declare bankruptcy. All their other debts get wiped out, but they still owe you $150,000. And 401k's aren't protected from this. So it's a much superior vehicle to have than suing somebody in winning.

And the good news is it's free. And we have a lot of victims who are getting money back. Sometimes pretty slowly. I mean, it might be that they're getting $600 a month from a thief, but it's better than the alternative. So those are the other ways to get your money back. The other question that people ask, and I saw somebody had asked a question about this

using the question feature in Zoom. And if you have other questions by the way, bring them on, we do have some time after they answer them. One question that we get asked a lot is, should I call the IRS? And the hypothesis, of course, is that when people steal your money, they tend not to report it on their tax return.

So they've almost certainly committed tax evasion. And absolutely, you can call the IRS and make that an issue. Here's the problem. If what you're after is revenge, it's a great idea. I mean, let's add to this person's troubles and let's throw tax evasion on to their other legal different ways. The downside is that if you're hoping to get money back

from the thief, when you call the IRS, what you do is you invite somebody else to step in line in front of you. The IRS will get paid before you. And so you're really in some senses introducing a competitor to yourself in repayment. So it makes sense in certain situations most of the time when people call me

and wanna do this, I talk about it. And I say, you have to decide here between much more important, getting revenge, getting your money back. And almost everybody says, no, I want one money back. Well, then, don't call the IRS. I'm sorry, I was answering your question. Okay, what to tell people?

This is where we talk about how you control the narrative

from the very beginning, so that you can protect your personal and your business reputation. Number one, I know that a lot of dental professionals would rather run around the outside of the building than 100 degree feet by times before they deal with any type of conflict. Let me just tell you, you're not gonna be able to do that in this particular case.

You're going to have to address it with your staff members. And what you say during this time period is very crucial.

Some people will have to go through this suspension process with a suspected thief, in which case you have to notify your staff members why that person is not there. So for example, you're not going to be able to have a conversation at lunchtime with Jennifer telling her that you've found some anomalies and that you would like for her to take about three days off to answer those anomalies

and to explain them. And then go back to work that afternoon with all of Jennifer's coworkers and not tell them why she's not there. Number one, number two, when you separate or terminate the employment relationship with that suspect, you're also gonna have to let your staff know. And I always recommend to my clients

that you keep it very vague. You give them some hint that something is going on but you otherwise keep it very vague and you ask them not to discuss it with referral sources with former employees including the suspect or with patients or vendors. It's a private matter that you keep within the office. And while we're on the subject,

our mission is to take care of our patients and provide them with a very best care that we can and this is a distraction for us. So I ask that you also not speak to each other about it, right? So you're putting it out there what your expectations are of your employees because you may need their help. Some of it may have information and want to come with you

come to you and share that. Also, you wanna go to the next one, Dave? Sure, sorry, I was just answering a question. Okay, I got distracted. Okay, as far as your patients, you know, it depends on how you feel. I've worked with clients who have said, you know what, I did nothing wrong

and if my patients find out, you know, I don't really care. Cause I didn't do anything wrong. I have other clients that say, you know, no way. I don't want my patients to find out what's going on. Okay, so at least I can't get my patients in point, I have a client right now. implore to who's having some issues with some cash being stolen and his patients are finding out about it

and they're angry. And they're saying, you know, this isn't my balance. I don't know, you know, I don't know what my balance is, but I know this is a ride, I pay to cash, whatever. My suggestion is again, sort out the accounting issues with your patients, but don't go into any type of detail because remember, we're also talking about the fleet where you're kind of in the train having filed a police report,

but the thief hasn't yet been criminally convicted. So it's a time where anything you say could be used against you and someone could claim slander against you. So you really want to watch what you're saying. You know, my recommendation to a patient if they ask, where's Jennifer? You know, a good answer might be, well, you'll need to ask Jennifer, but she no longer works here.

You know, or just say, we don't discuss personal matters. She's not here. Also, with your referral sources, I know that this is incredibly important for my orthodonic friends at well, it's important for everybody, but I know specifically for my orthodonic friends and my oral surgery friends as well. I do recommend having a business owner

to business owner meeting with your top referral sources and not exactly telling them what happened. Don't give them any details. You may simply say I had an integrity issue with Jennifer, and she is no longer with our office. I just want you to know in case you hear something, please go for you to come to me and talk to me personally about it

and control the narrative on that so it doesn't hurt your business in the future. And as far as references or that particular employee is concerned, same thing we always say, we don't do about any information. I'll confirm dates of employment and one other question. That's it. Another easy way around it is to say,

you know, my attorney has advised me that I'm not to comment on the situation. If someone gets in higher set of employees after you say that, then they might deserve what they're gonna get when employees steal from them as well, because that's just plain stupid, but that's a nice code for saying, yeah, this person something's really bad

and no, my attorney told me not to talk about it. And you should tell them what the other question is Wendy, or what the question you would answer is. Would you hire a back? Yeah, that's the question. Okay, yeah, would you hire a back? Will it be held on? Yeah, I have a help in there.

Or absolutely no way or whatever, and that I clean it. Yeah, and that leads into, or he has gone, so why should you investigate? One of the main reasons you want to investigate is 22% of the measurements in our industry are not investigated. And that's kind of sad to really think about that,

because they think, well, I ended the employer relationship and it's done and it's over and I'm going to move on. But just like Wendy said, if you allow that person to go back out into the dental industry and look for another job, the proof is no longer in the pudding, right? So you cannot have that proof to for other doctors to know what this person is aware of.

That, you know, they have that history. Also for your future financial recovery for insurance purposes, before joining procs fair and I have a personal experience that they uncovered some employee dishonesty and chose not to have it investigated. And in the end, it did end up costing them a lot of money. They were able to recover a small portion,

but not near what they should have had they have it professionally investigated. So you know, you want to prevent your other colleagues from having the same experience happening from them and also protect what you've invested in, you've invested in a practice and you know, you want to protect that also. The other scary thing and sad thing

is 46% of dentists who have had an development occur, will get hit again. And so that's where it's really important to have that infrastructure and know what you need to do to make sure that that investigation happens. So talking about that, let's talk about what we can do for a dentist. Well, we all know that we conduct an development investigation. So if you think that there's something going on

to fishes in your office or if you have a colleague that has something suspicious, we're definitely here to investigate that for you. Another thing, like I just talked about the 46% that get having development happen again is we offer a customized office protection system that we help you determine that you have to do the place to help protect you from having this happen again.

As always, we do these webinars to give rather than to take. And we have a few things to give you today. The big one, and you can see partying the industry. It's property is the panic checklist but it really should be the holy shit check list. So this is designed to kind of guide you through most immediate steps when you wake up in the middle the night and you think, oh my gosh,

somebody is dealing with that. Also, there's all kinds of information on our website. And most of you have probably been on the website or a number of different parts. There's the hall of shame where we profile about 700 people who have a vessel from dentist. We also have a lot of articles there and as well, we've got some descriptions of the various things

we do. I mean Amber mentioned investigation, then our head of the product office protection system, which is really designed to help you. Make your practices as protective as it can be everyone. So that stuff is all there on our website. And I'll just bring to you our request that if you've been enjoying our webinars,

we'd love you to leave a Google review for us. That's ladies and gentlemen. I'd like to thank you all for being with us. And... I have a question. It's from Paul. It's a very thoughtful question. But he writes after caching so many checks

made out to the dentist how often to the banks. suspect in vessel management or theft before the dentist does, how often debates and financial institutions start investigations and inform the dentist victim. Yeah that's a great question and high-pull a friend of mine and he he he he's a big fan of our winners so we're great to see you there. I guess the the best common I can make about banks is this. They don't always hire staff members the same week now so fire is walking scientists. A lot of stuff that banks probably should catch in terms of

what what happens with with checks. A lot of what they should catch they just don't.

And if you want to try a little experiment take a check, make it up to your spouse but don't put their name on it use your favorite Disney character. So if your female make it up to Donald Duck and sign a mini mouse and you're making for some decent amount like $500 and say to your spouse okay but I don't want you to go to a bank tower. I want you to deposit it at an ATM and the chances that anybody's gonna call you through the bank and say you know you might want to stay away from Orlando or in a high-me for a little while. The chance in anybody's gonna say that's really small. Banks are really automated at this point and a lot of stuff happens there in the truth okay so you know to answer Paul's question the detection rate of

this up from Banks is really well. I have a question Dave if a practice has identified to ask what should be their next step? One that we get involved once it's identified what you have background and so we're gonna share on that. Okay yeah as a great question and the answer is as quickly as you possibly can. This starts to get complicated and technical very quickly and there are a lot of considerations here you know we want to make sure that evidence is preserved we want to ensure that we find this stuff as quickly as we can and get you as much money back as you can and get the person in jail you know there there are a lot of facets to this and you know Amber Wendy and I all spend a whole lot of time helping people navigate through this really

complicated problem. So if you have suspicions or if you've if you've got somebody redhanded already we'd really like to be the first one called it make and most of the time I'm kind of the person that people go to first and you know I'm I my one of my responsibilities here normally is kind of the intake process and to understand what's happened and you know help you make those those first few critical steps correctly. So yeah you know that don't wait and and things aren't going to solve themselves generally so as soon as you can we're into this idea that time we're in how are you um we're in the good friend of ours and we're always by the half we're here. Okay um I have a question Valerie was asking um she said a colleague was told that she could

1099 to feed for the amount of money that these stole. Can you address that because I've hard that before to you. Yeah you sure can so if in case anybody doesn't know what what at 1099 uses is really a record of employment earnings so that's that's the the thing that makes it taxable in the eyes of the IRAs. It is great to send one out but bear in mind what I said before when you get the IRS involved they step in front of you in line in terms of repaying. Okay so he was generally aren't sitting on big bags of caps um you know they they tend to have a very limited ability to repay and if they are in prison and then they get out and now what's happening is they're paying you know they're paying back from a guarantee. Do you really want

the IRS to get all their money back first and then after that which might be six years you start getting repayment. So you can do it. I'm just not sure in a lot of cases that it's the best thing that you can do. Yeah you know you just have to be conscious of the fact that it's it's kind of postponed your repayment now. If you're not interested in repayment and you just want to punish somebody great. If you have some other way of getting all your money back you know for example if the theft is 20 by 1,000 or less and you're insurance powers it you're going to get it all back from insurance then by all means turn the dogs at the IRS loose but if it's just if it's a sizeable theft and and your some of your repayment is coming from what the thief can do for you. I'm just not

sure it's your best plan. Now the other thing I'll mention is that it's not I'm heard of for the IRS to monitor court proceedings and you know see that an investment in the cases coming up and realize that they have somebody who's a taxabes. I think they find it on their own anyway but in general I would be really cautious about introducing the IRS into the equation. Okay okay. Oh go ahead I'm sorry. Someone ask why do Dennis do you have been in vessels from get hit again? Yeah I'm sure the answer because they tend to learn the wrong lessons. The one yeah they tend to learn the wrong lessons but a lot of it is they're fearful the system is really integrated a good infrastructure. That's one of the things that I see happen

is there's just lack of infrastructure? Yeah I mean Dennis who gets stolen from tend to have systemic weaknesses and then as I say they learn they're on lessons so they fix the wrong things and let me give you an example of this. Well let's say that you're allowing a staff member to take the deposit to the back and you know somewhere today probably there was some staff member who left the practice with $4,200 and deposited $3,700 into the bank. So if you're that person what what goes. your mind is, well, if only I had taken the deposit to the bank myself, that wouldn't have. And I'm not sure I agree with that.

To me, what was really missing there was verification. And we did a session a while ago, and I think it was one of our most informative ones. And it was called Reckon Sol, Reckon Sol, Reckon Sol, your choice. And really the point we were talking about there is it doesn't matter who takes the cash to the bank. And what I'm not sure is that you have a way of verifying that the right amount of cash, for the right amount of deposit, sorry, it's not cash, the right amount of deposit, a right amount of deposit, a right amount of the bank.

If you're doing that, it doesn't matter who takes the money to the bank. But a lot of times people will solve the wrong problem after this. And they will shut down whatever narrow little methodology that the thief took. And these have a lot of choices. I mean, we've seen hundreds of different methodologies. In fact, when did I were talking on the phone last week about a new one that you have? So they have lots of choices. And we cannot view this as an exercise of whatever specific methodology a thief used against

me. I'm going to make sure that never happens again. You have to do that. But it can't stop there. And it goes back to what Emerson. But you need integration in your systems. And you need stuff that's well thought out. Yeah.

You think? Yeah. I'm just going to walk through. Oh, somebody's question. And this was kind of a follow up question. They're one about the 1099. So what somebody said in response to that question was, but I get to tax the amount on the 1099.

That's true. So we're talking here about an employee who steals a new issue of a new issue of a 1099. You weren't taxed on that money in the first place. Most of you use what's called the cash method of accounting. So if a thief is stealing, and let's assume that it's a scamming kind of thing where they're taking incoming insurance drinks, you haven't paid tax on those anyway. So issuing a 1099 for that money doesn't then entitle you to deduct what wasn't taxing with you in the first place.

Okay. The only place where the 1099 would help would be if you're using the other method of accounting, which is called the approval method. And that's normally really big practices. But you don't do that unless you're practice this $5 million more dollars coming in. Somebody asked us about cost. What does it cost for our prevention program? That's the one that Amber mentioned called Office Protection System.

In a solo practice, it's $7,000 dollars in a group practice that can cost a little bit more. The other thing I'll mention is that we right now with COVID are offering people payment terms so that they can pay us for things over time because we understand that for a lot of you COVID has really messed up your cash flow. So we're quite happy to work with you to make it affordable. Certainly, if somebody wants to learn more about Office Protection System, I'd encourage them to call me in.

Well, I love to thank my wonderful co-hosts. I got to say we have a lot of fun putting these together and delivering them. And these guys are just an absolute dream to work with in this stuff. So I will thank Wendy and Amber for being with us today and I'll thank all of you. Thanks for listening to the dental practice owners podcast. 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.