By David Harris MBA, CPA, CMA, CFE, CFF
I’ve lost track of how many dental practice embezzlements I’ve investigated over the last 25 years. My company, Prosperident, investigates hundreds each year.
First, let’s quantify the problem. Published statistics suggest that dentists have a 60% probability of being victimized at some point during their careers. Average amounts stolen exceed $100,000, and remediation costs add to the total loss.
Contrary to conventional wisdom, most embezzlers are not “serial embezzlers” who are successfully hired after stealing from others. Rather, over 85% of the embezzlement we investigate is committed by long-term employees with no criminal record or adverse work history.
So, while it’s important to check the backgrounds of potential hires, it’s far from the perfect antidote for embezzlement since the greater danger lies with existing "best employee" with no prior problems.
Regardless of the embezzlement methodologies used, invariably, there are outward behavioral manifestations that give it away. That’s not just my experience, but it also agrees with the Association of Certified Fraud Examiners, which in its 2012 Report to the Nations
found that over 80% of embezzlers displayed behavioral indications of embezzlement.
Here are some “embezzlement-like” behaviors that doctors should look for from their best employees:
• The employee’s situation suggests financial pressure. They have an addiction or gambling problem, their spouse has lost his or her job, or they are getting divorced.
Visible symptoms may include creditors calling the office, a wage garnishment, or frequent requests for pay advances or loans.
• The "best employee" works many extra hours. Thieves want “alone” time in the office to steal. Paradoxically, this makes them look like super-dedicated employees.
Do you have questions about embezzlement? Give Prosperident a call at 888-398-2327 or click HERE to speak with us.