An interview with a dental practice embezzler

In our monthly Fraud Blotter column, dental fraud experts Jean Patterson, Sandy Baird, and Teri Dervenis present real cases of fraud from dental offices and other businesses. In this article, Dervenis interviews a dental practice embezzler to understand her psychological profile.

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Fraud Interview

In our monthly Fraud Blotter column, dental fraud experts Jean Patterson, Sandy Baird, and Teri Dervenis present real cases of fraud from dental offices and other businesses. In this article, Dervenis interviews a dental practice embezzeler to understand her psychological profile.


EVERYTHING WE ELECT TO DO OR NOT DO produces an outcome. Deciding to use a particular piece of technology in your office most likely came from the awareness of efficiency, productivity, and patient acceptance. Perhaps your colleague has the same technology in his or her office that they just cannot stop talking about. Weeks and months go by, and they are still sharing the benefits they are receiving from their purchase. Your interest piques a bit more, and you decide to stop by the practice to see what all the talk is about. After all, you would never incorporate technology that provides false outcomes. Right? Your thoughts about the technology created a rationalization to purchase, integrate, and use in your practice. You most likely began asking the who-what-where-when-why before making a decision. You talk to your staff, your accountant, your spouse, and 14 other colleagues. You take a test drive, fall in love, and ta-da! Subconsciously, each step of your due diligence to purchase utilized the process of rationalization.

According to the Cambridge Dictionary, rationalization is creating a reason, explanation, or excuse for an action or behavior. (1) On the other hand, lack of awareness, lack of intuition, lack of rationalization, and lack of reasoning are all contributing ingredients of fraudulent behaviors. The purpose of this article is to provide insight into an employee’s choice to embezzle. My interview subject is anonymous but a real person. Changing the name and location of this offense provides respect for the privacy of those affected by this crime. Our focus will not discuss how much was stolen or the procedural steps used, but rather explore the psychological factors behind why the employee stole from her employer.

“I knew it was wrong because my heart told me so.

Jerry, a 43-year-old wife and parent of two children, shares her thoughts and actions that culminated within her heart as she decided to commit fraud. Jerry shares with me that the attempt to steal money from the office began years before she took the doctor's money. Years prior, her life was less complicated, yet financially challenged. She often thought that she could easily steal and the doctor would never know because “he never checked anything.” As a teenager, Jerry faced negative feelings of guilt, remorse, and disappointment with her decision to steal $50 from her next-door neighbor. “This feeling held me back several years from stealing until I finally just did it.”

Jerry needed the money to attend her senior year bus trip to Florida with her classmates. Jerry rationalized that she stole the money from her neighbor as a means to participate and not be singled out from the rest of the kids in her class. Her parents were going through a divorce, and they did not have the money for the trip. Time passed and “the feeling of stealing from the neighbor wasn’t nearly as painful.” Jerry assumed that if she stole the money from her employer, the feeling would be the same and go away with time. After this realization, she began to rationalize why she needed the money. And so it began.

Jerry explains that she and her husband needed money to make much-needed repairs to their home. Each year that went by, another financial obligation would deter their home repairs. Jerry held the position of business administrator and office manager for a busy pediatric practice in upstate New York. One of Jerry’s many responsibilities included reporting production, collection, and overhead numbers during team meetings. Employees received bonuses if they achieved their set goals. Every month, the office met their goals until their associate doctor went on maternity leave. The production gap left the office short of obtaining their goals, and Jerry found a way to eliminate this deficit. “It was a win-win for everyone; we all stayed positive and received our bonus.” Jerry convinced herself over time that overcharging patients during the associate's maternity leave was OK because “we all worked twice as hard without the associate being there.”

According to Murphy and Dacin, the psychological pathways to fraud reveal how individuals process thoughts that lead them to an illegal or highly unethical choice. (3) The psychological pathway begins with the opportunity and motivation. Jerry was fully aware that her decision to steal was wrong, and she proves this by telling us that "her heart told her so." As time elapsed, she accepted the fact that her intuition convinced her that stealing would be acceptable. She knew the benefits of stealing would help everyone in the office and outweigh the cost of committing fraud. After all, she wanted that kitchen remodel and was determined to get it. Jerry’s reasoning behind her theft removed the negative impact she would have had if she had acted without a cause.

A new life is born into this world, and the associate doctor returns to work. The associate settles back into her position at the office and discovers how well the team performed while she was away. Congratulating the team for their success, she begins to ask, “How did you manage, and what did you all do differently during my absence?” Surprised to learn of their success, she began to study the reports of production per provider. She notices a pattern and casually begins to converse with the senior doctor regarding the newly found procedures. Procedures in the reports supported the beginning of their discovery that "the reports are not right."

Jerry began to notice the doctors reviewing the reports and “panic settled in.” How would Jerry back out or reduce her actions? Would she confess? Would she stop stealing? Or would she continue the pattern so the reports are consistent without showing a sharp decline? Jerry sustained her actions and assumed the doctors did not understand how to read the reports. She used her rationalization to reduce the negative impact by initiating a community-donated dental day for the office. All procedures provided during this day were free to those in need. Striving desperately to show her moral values to the doctors by giving back to the community, Jerry’s act of kindness initiated “red flags” to both doctors. The psychological red flags helped the doctors confirm their questioning, and eventually, fraud was uncovered.

Statistics reported by the Association of Certified Fraud Examiners in its 2016 Report to the Nations on Occupational Fraud and Abuse reveals that businesses with fewer than 100 employees report that 5.4% of fraud discovered happened by reviewing documents. Asset misappropriation (a billing scheme, in this case) resulted in 22.2% of cases surveyed.

The mindset of an individual

One could argue that if the individual could identify the very first time that they began rationalizing their thoughts of stealing and given the skills to overcome these thoughts, they could stop the behavior of potentially stealing. Boyle, Boyle, and Mahoney state that individuals should be equipped with a set of moral foundations that can be learned from their workplace, meaning a strong mission statement about the company and the employees that are working there. (3) Instilling this mission provides a foundation of morals and ethical behaviors expected from employees. Referring back to the company’s mission could deter a potential fraud situation. What if Jerry could have referred back to her office mission statement? Would she have proceeded onward with stealing? Would this have made a difference between proper conduct or a mistake she would regret forever? Understanding a clear set of boundaries regarding what she would or would not do in efforts to achieve her success would have told us that Jerry had firm values in place.

Jerry explained to us that she was aware of her behavior, and undertaking her impact-driven procedures to steal happened with a thought process. Her decision not to refrain from stealing superseded any feelings at heart and immediately began justification and rationalization of her actions. The choice of stealing produced an unfavorable outcome for Jerry as her confession lead to her conviction.

My recommendation concerning foundational tools for your business is to inspire your team. Provide them with resources to grow personally and professionally with your company. As a leader, you have invited employees into your work life, a life that you created to support your well-being. I suggest surrounding yourself with a comprehensive understanding of how leadership can influence and direct your employees. Continue to invest in your leadership skills and be passionate about leading people. Understand that implementing resources, protocols, and internal controls do not mean that your business is free from becoming a victim of fraud; however, understand that by adding layers of protection to your business will likely deter potential fraud from happening.

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References

1. Cambridge Dictionary. (2017). Rationalize. Retrieved November 28, 2017, from cambridge.org: https://dictionary.cambridge.org/us/dictionary/english/rationalize

2. Boyle, D. M., Boyle, J. F., & Mahoney, D. P. (2015, February). Avoiding the Fraud Mind-set. Strategic Finance, pp. 41-46.

3. Murphy, P. R., & Dacin, M. T. (2011, Spring). Psychological Pathways to Fraud: Understanding and Preventing Fraud in Organizations. Journal of Business Ethics.


Content Dam Diq Online Articles 2017 12 Teri Dervenis 1Teri Dervenis brings more than 30 years of experience in the dental profession. As a territory sales manager for Patterson Dental, Teri was known as an account advisor for 15 years, helping dentists make their vision a reality. Teri is an associate member of the ACFE and serves as secretary for the Indianapolis chapter. Contact her at tdervenis@garrettdocs.com.

More from this author:A $998 ounce of prevention


More from the Fraud Blotter:

The collateral damage of employee fraud

Behind the Fraud Triangle: Understanding the origins of embezzlement in dental practices

How embezzlement hid behind an employee manual


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Editor's note: This article first appeared in the Apex360 e-newsletter. Apex360 is a DentistryIQ partner publication for dental practitioners and members of the dental industry. Its goal is to provide timely dental information and present it in meaningful context, empowering those in the dental space to make better business decisions.

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