What Most People Get Wrong About Embezzlement

Episode #446 with David Harris

If you think embezzlement can never happen to you, take time to think again! No one is immune, and it’s impossible to prevent. All you can do is make it more challenging for the people who choose to steal. And to help you in that process, Kirk Behrendt brings back David Harris, CEO of Prosperident, to debunk common myths about thieves and embezzlement so you can outsmart them and reduce your chances of theft. Cash isn't the only thing an embezzler will take! To learn ways to protect your practice, listen to Episode 446 of The Best Practices Show!

Main Takeaways:

No dentist is immune to embezzlement.

75% of dentists are stolen from at some point.

Embezzlers may be smarter than you think.

Think beyond cash theft. Thieves will adapt.

Make it challenging to steal from your practice.

Always reach out to an expert for help.

Quotes:

“In 2019, [the American Dental Association] went to [17,000] dentists and they said, ‘Have you been stolen from?’ And I'll give you the good news first. 53% of the respondents said, ‘I don't think so,’ because this question doesn't always lead itself to absolute answers. Of course, the other 47% had been stolen from. So, the ADA asked them a follow-up question, ‘Okay, how many times?’ And now, it got a little bit interesting. 26% — so, about half of those who said they’ve been stolen from — said, ‘Once, as far as I know.’ 11%, twice. 2%, three times. And the one that really made me stand up and take notice was that 8% of the respondents said, ‘Four or more times.’” (3:55—4:44)

“Some things that we don't know here. For example, we don't know how many of the 53% [from the ADA study who] said, ‘I haven't been stolen from, to the best of my knowledge,’ will get victimized in the rest of their careers. And we don't know how many of the other 47% who had been will get stolen from again. We also don't know how many people were stolen from and just didn't realize it, or how many were stolen from and did realize it, and for whatever reason, chose not to disclose that to the ADA.” (5:07—5:37)

“If you start with 100 dentists, probably 75% of them will get stolen from sooner or later.” (5:41—5:46)

“[Embezzlement] is not a crime committed on you by a stranger. It’s a crime committed by somebody who you had a relationship with, you were almost like family to. And they used the trust and the faith that you placed in them and leveraged it into theft. So, it’s a very personal crime. The money is an issue — it has to be. But in a lot of cases, it’s the sense of violation. It’s that thought process where you say, ‘I was at her daughter’s wedding three months ago. And it’s just starting to occur to me how much of that wedding I paid for.’ It’s that, that really hurts.” (7:09—7:52)

“The first thing [dentists get wrong about embezzlement] is, ‘I have immunity because . . .’ And if we had a live audience with us today, there'd be some people sitting like this with their arms folded and their face tight. You could probably even see them bruxing a little bit. And what it all says is, ‘Well, it might be the person to my left, and it might be the person to my right. But it won't be me.’ And then, they have some algorithm that they’ve constructed that puts them in the immune category. For example, ‘My staff have been with me for 20-plus years.’ And every embezzlement has a first time. Sometimes, it’s a newly hired staff member who’s been with you for three months. And sometimes, it’s your office manager of 25 years.” (8:30—9:18)

“We can't control the external pressures that are exerted onto somebody that makes them wake up one morning and say, ‘Today’s the day I'm going to steal.’ And the backstory could be a lot of things.” (9:20—9:31)

“I've seen both sides of it where somebody who you think is almost too stupid to tie their shoes can successfully steal. And at the same time, you see some pretty creative, inventive thieves who come up with stuff that makes you want to salute and say, ‘Wow, that was so smart.’” (11:22—11:40)

“One thing that people often get wrong is what the response should be when they suspect embezzlement. And I've seen a couple of posts in Facebook groups in the past few months where somebody posts and says, ‘I'm pretty sure that my office manager or my financial coordinator is stealing from me. What should I do?’ And the next thing that happens is 20 or 25 dentists chime in, and they all are suggesting things that the original poster should do. And most of them are just dead wrong.” (11:58—12:31)

“What needs to happen is a proper investigation is done first. Once the investigation is done, then at that point, you can go to police and say, ‘Okay, the amount stolen was $112, 464.84. Here’s who did it. Here’s how they did it, and here’s where the money went.’ When you tell the police all that, they can work with us. Until then, it’s, ‘My car was stolen, and I'm not sure if it’s a Mercedes or a Toyota.’ And there's nothing they can do about that.” (14:53—15:30)

“If you think that $5,000 was stolen from you, you might say, ‘Okay. It’s not important to me that charges get pressed.’ But suppose, when we’re done, the number is $185,000. Do you feel differently? And if you don't, let's add another $100,000. And I ask the question again. And a lot of times, the initial conversation that I have with somebody is where they say, ‘Yeah, I don't want anything to happen to the thief. I mean, I would like to get back as much money as I can, and I certainly want them out of my practice. But they're a single mom, and I don't want them to go to prison.’ And seven or eight weeks later, when we’re talking about how much money was really stolen, the same person who said that to me will say, ‘Throw their ass in jail.’ Once they understand the amount of money — but not just that, the cynicism, the way that they realized they’ve been played by the thief — now, they feel very differently.” (17:03—18:05)

“If somebody has stolen from you, the best thing you can do to protect your profession is make them acquire a criminal record. Because if you simply are happy to see their taillights going down the road and you don't do anything beyond firing them, then you're setting up somebody else in your profession to have a repeat of what just happened to you.” (19:11—19:31)

“One of my team members, Amber Weber, said something very profound once. She said, ‘Transparency is one of the first casualties of embezzlement.’ People who are stealing do not want to be transparent with their doctor.” (20:48—21:05)

“A lot of people think that there's no chance they will get any money back from this, and that paying, for example, for us to investigate is simply throwing good money after bad. And the average return on investment on hiring us is about 400%.” (22:36—22:55)

“The mistake people make is they let the suspect know that they're a suspect. And believe it or not, people do this: they’ll call their office manager in and say, ‘I think you're stealing from me.’ And if I'm the office manager and I'm not stealing, you've antagonized me in a way we will never be able to repair. I mean, there's never going to be a working relationship after that if it isn't true. And if it is true, I'm expecting this conversation, and I've been expecting it for months or maybe years, I'm going to say, ‘No, I'm not!’ And what does the dentist do then, exactly?” (27:23—28:07)

“One of the other myths is that what thieves steal is cash. In other words, I've talked to some dentists about this issue, and one of the first things they say to me is, ‘Well, I don't take in much cash.’ And clearly, what's in their mind is that the only thing that thieves can steal is $20 bills. And don't take me wrong here — if I'm a thief, the thing I want to steal is cash. However, if there's not enough cash coming in, or I think that stealing what I want to steal from the cash that is coming in will get noticed, then I adapt.” (34:39—35:16)

“There's no system that will prevent embezzlement. When somebody wakes up tomorrow morning and decides, ‘Today’s the day I steal from my doctor,’ it’s going to happen for a period of time. The really operative question is, is that period of time a week, a month, or a decade? If somebody steals from you and they get caught in the first month, that's not a defeat. That's an overwhelming success. The person who gets away with it for about two years — which is the average, by the way — that's a different story.” (38:05—38:38)

“There are people who [check their deposits], and then there's the other 85%. So, if you're in that 85%, if you have no idea how much your deposit is today, and if you don't check your bank statement to see that that amount went in, the laziest, dumbest thief on the planet can successfully steal from you.” (39:00—39:22)

Snippets:

0:00 Introduction.

2:46 David’s background.

3:23 The reality of embezzlement in dentistry.

5:59 Unintended consequences with embezzlement.

7:54 Embezzlement myth: I have immunity.

10:05 Embezzlement myth: Embezzlers are dumb.

11:44 Embezzlement myth: Call the police immediately.  

16:00 Embezzlement myth: You decide about pressing charges.

18:35 Embezzlement myth: It’s enough to fire the thief.  

19:35 Your favorite people love accountability.

21:07 Delegation versus abdication.

22:31 Embezzlement myth: There's no chance you'll get money back.

26:35 Stop, drop, and think.

28:08 Beware of thieves’ drastic escape plans.

31:21 Insurance embezzlement versus cash embezzlement.

34:02 Embezzlement myth: Thieves only steal cash.

35:46 The model of a thief is not simplistic.

37:31 Ways to reduce your chances of embezzlement.

42:07 Try the Embezzlement Risk Assessment Questionnaire.

Reach Out to David:

David’s website: https://www.prosperident.com/

David’s Facebook: https://www.facebook.com/davidharrisprosperident

David’s social media: @davidharris9406

Resources:

**Email David for a free copy of his Embezzlement Risk Assessment Questionnaire: https://www.prosperident.com/contact-us/

Prosperident’s Hall of Shame: https://www.prosperident.com/hall-of-shame/

Dental Embezzlement: The Art of Theft and the Science of Control: by David Harris: https://www.betterworldbooks.com/product/detail/9780228818755?shipto=US&curcode=USD&gclid=CjwKCAjwt7SWBhAnEiwAx8ZLak0hQqCPFtBR8ZELN5m9humCDUwWW4FWaQuispvFtpfP9f6brSuZ6BoCR4oQAvD_BwE

David Harris Bio:

David Harris – CEO of Prosperident: Dentistry’s Embezzlement Experts

Under David’s leadership, Prosperident has expanded over the past three decades to become a team of more than 20 highly specialized fraud investigators, forensic accountants, IT specialists, and support staff. David’s vast investigative experience, coupled with his youth-filled misadventures and his past military service, have given him a unique insight into embezzlers’ mindsets and actions. He is passionate about sharing his wealth of knowledge with dentists and dental specialists.

David is a much sought-after speaker and an accomplished author on the topic of dental embezzlement. Dental Embezzlement: The Art of Theft and the Science of Control is his most recently published book.

David believes that the best educational experiences are enhanced using humor. His entertaining and insightful presentation style has made him a favorite presenter at regional, national, and international dental conferences.

David’s professional qualifications include Certified Fraud Examiner, Certified in Financial Forensics, Forensic CPA, Chartered Professional Accountant, Certified Management Accountant, and Licensed Private Investigator.