Employee embezzlement in dental practices: The hard facts

No dentist wants to believe that their wonderful staff members are capable of embezzling from them. Prepare for a wakeup call! It can happen to you, and here's what you can do.

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No dentist wants to believe that their wonderful staff members are capable of embezzling from them. Prepare for a wakeup call! It can happen to you, and here's what you can do.

This article first appeared in DE's Expert Tips & Tricks. To receive enlightening and helpful practice management articles in this e-newsletter twice a month, visit dentistryiq.com/subscribe.

It’s a hard truth of owning a dental practice—employee embezzlement is rampant. Dental practice owners perceive employee embezzlement as something that only happens to other practice owners. But that isn't the case.

Concentrating on providing quality patient care can often make monitoring employees difficult. There are many different opportunities for embezzlement to occur, and few employees that embezzle are ever caught. If you own a dental practice, you should be diligent in watching for warning signs. But you should also take the necessary steps to try and prevent embezzlement in the first place.

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Even a little bit of prevention can help avoid what could be severe consequences. All practice owners should be aware of, and take action to prevent, employee embezzlement. Here are some prevention steps to take:

Hire the right people—The first step in preventing employee theft is to make smart hiring decisions.

Screen all potential employees—It's important not to hire relatives or friends of current employees. Always verify that job candidates are not related to the employees in your office before you hire them. Hiring relatives or friends can create conflicts of interest and allow too much access to your assets.

Conduct a background check on employees—Before hiring someone, conduct a thorough investigation of the candidate’s background, including credit, employment, and criminal history. Other prevention steps include educating yourself on embezzlement, learning how to use your computer system to check all your daily reports, questioning any and all adjustments, being visible, varying your schedule, verifying all credit card charges, and protecting your identity and signature. There are many different warning signs that might draw your suspicion, so it is important to be cautious and aware.

Here are some of the most common warning signs that employee embezzlement may be taking place:
An employee is having financial difficulty.
An employee’s personality changes.
An employee flaunts newfound wealth.
An employee is always first to arrive and last to leave.
An employee is very controlling.
An employee is taking work home.
An employee is resistant to change.
An employee is constantly working overtime without sufficient reason.
An employee never takes vacation, sick, or personal days.
There is an increase in past due accounts or a decrease in collections.
Coworkers complain about a specific staff member.
The financial records are inconsistent.

If one of the warning signs draws your attention, there are things you should do and things you should not do. First and foremost, contact an attorney who specializes in investigating employee embezzlement in dental practices. It is imperative that you do not alert your staff members because this could alert the embezzler.

You might want to bring in experts to help with your investigation (forensic accountants), but make sure they do not come in the office during work hours. Do not immediately contact law enforcement since this would create panic among your staff members and make it hard to catch the employee who is embezzling. As the practice owner, make sure your emotions are in check, and make sure that your emotions do not lead you to make any bad decisions.

Stuart J. Oberman, Esq., handles a wide range of legal issues for the dental profession, including cyber security breaches, employment law, practice sales, OSHA and HIPAA compliance, real estate transactions, lease agreements, noncompete agreements, dental board complaints, and professional corporations. For questions or comments call (770) 554-1400 or visit obermanlaw.com. If you would like Mr. Oberman to speak at an event for your organization, contact Katharine Drum at kath@obermanlaw.com.

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