Episode 22
22: The Key Indicators That You Could Be Being Embezzled - David Harris
Dental embezzlement is a controversial and touchy subject. Yet, two out of three dentists experience some form of embezzlement at some point in their careers. David Harris is dentistry’s embezzlement expert. He is the CEO of Prosperident a company that employs specially trained fraud examiners to review information off-site to determine if you or your practice has been a victim of embezzlement.
David founded Prosperident in 1989. He is a Certified Fraud Examiner and a licensed private investigator. He is a CPA, and he belongs to several organizations for dental consultants and speakers. He’s also been interviewed by almost every leading publication about dental embezzlement. David has agreed to do this interview, but he can’t talk about specific methodology. Nevertheless, he opens our eyes about this often not talked about topic.
You can find David here:
(888)398-2327
Show Notes
[03:06] David shares his origin story of how he got involved investigating dental embezzlement. It all started with a high school friend in 1989.
[04:10] He helped his friend discover an employee who was stealing from him. This woman subsequently was fired. Two weeks later David went to his own dental office for an appointment and there she was working the front desk.
[04:23] It may have been fate, but he told his new dentist what was happening. His new dentist hired him and that is how he began investigating dental embezzlement.
[08:11] In 2007, the ADA asked embezzlement victims what let them know they had a problem? Two thirds of embezzlement cases were discovered by behavioral factors.
[12:54] Some people steal because they are needy and need to pay the mortgage or have other family financial problems. Greedy people are a little bit different. They steal to address an emotional problem.
[15:45] How the first theft often happens by accident. They also use different methods, so they won't get caught or won't be as obvious.
[17:51] Embezzlers tend to be territorial about their work space and their computer. They are also reluctant to go on vacation. They don't want other people touching their stuff.
[19:08] Embezzlers panic when they see a consultant walk in the door.
[20:09] Embezzlers also resist upgrades to the practice management software. They are also risk takers. They do things that are high risk behavior.
[22:15] The vast majority of David's investigative work is done covertly. A lot of the work is done through the cloud.
[23:55] The overwhelming majority of team members are honest people.
[24:25] David's advice is to retain them covertly.
[25:38] Honest people don't have to repeatedly tell you how honest they are.
[26:49] The pressures for somebody to steal are pretty complex. They don't usually stop unless they are caught.
[27:27] There are serial embezzlers who work in one office get fired and then get a job in another office.
[28:04] Dentists frequently do a poor job of hiring people or screening their hires.
[29:21] Dentists should speak to all former employers in the last five years. Also find the phone numbers independently when you verify them.
[31:37] One in four adults have a criminal record, and you need to check their ID when you hire them.
[35:00] Embezzlement is a crime of navigation. Every embezzler looks around and finds areas that they can target. They look at your control systems and see how they can steal money from within your practice management software.
[41:54] Embezzlement starts with the embezzler. This is somebody who wakes up one morning and then decides they are going to steal from you and then uses the knowledge they have about how your office operates to pull it off.
[43:25] Somebody who is worthy of your trust today may not be worthy of your trust five years from now.
[44:04] Change how you think about trust and make it a fluid concept. Trust is the most important piece of the pyramid and it is always moving.
[45:35] A great way to prevent embezzling is to not hire embezzlers.
[45:53] Be forensic when looking at a resume.
[47:07] The beauty of the question will you rehire this person? Anything other than a yes is a no.
[50:10] You can look at your alarm access log to see who is coming to your office after hours. Check your alarm log every month. You should also get an automatic report of your cloud access. Look for outliers.
[53:02] Cameras are great for any event where the time of the event can be isolated. Embezzlement can happen any time so it's hard to catch on camera.
[55:23] David suggest doing an initial audit and then setting the dentist up with risk assessment tools.Then when they have a baseline, they can repeat the questionnaire and if their scores are fine they don't need an audit.
[56:22] Fraud guard looks at key areas where fraud or embezzlement could happen.
Links and Resources:
(888)398-2327
