True Dental Fraud: The Westerner

In this installment of True Dental Fraud, a car crash leads to a series of unsettling events for a dental practice.

Content Dam Diq En Articles Apex360 2018 05 True Dental Fraud The Westerner Leftcolumn Article Thumbnailimage File
Make the selected text bold.Make the selected text bold.

Make the selected text bold.Make the selected text bold.

Western Town

We begin with a true story of a dentist as presented in her own words. Names have been changed to protect anonymity.

* * *

I couldn't believe it was really happening! After one year of residency, two years in corporate dentistry, and one year as a buyout associate, I finally owned my dental practice. I was particularly thrilled because I had just learned that all the former owner's employees were staying with me. Of course, my excitement was tempered by what felt to me like an unimaginable level of debt: education, home, car, buyout...but if all went smoothly, I was going to be OK.

Before I could catch my breath, three months had passed with only minor bumps along the way. Things looked promising. Then I got the call.

It was a Wednesday night. My phone rang and I saw it was Anne, my front desk team member. I answered and was immediately surprised because it wasn't Anne's voice I heard but her husband's. In a broken voice, he informed me that Anne had been involved in a head-on collision and was currently in the ICU in critical condition. Of course, I was devastated and extended my most profound concerns and willingness to help. I hung up the phone and slumped to the floor to gather my wits. Poor Anne!

Then, I couldn't help it. Reality crept into my brain: I had lost my front desk person.

In those first few sad and frantic days at the office, we survived by rescheduling patients and begging for everyone's understanding. It didn't take long to realize the other team members had no idea what Anne did, how she did it, or when she did it. All that knowledge was in Anne's head and nowhere else. Sure, the others could answer the phone, but that was about it. I was equally clueless, so I certainly couldn't train them. I felt my only option was to find someone with experience and hire her fast.

This would be my first hire. We posted on Craigslist, Indeed, and local websites. We passed the word down every channel we could imagine. The resumes started trickling in—mostly with people having no dental experience. Finally, a gift fell into my lap. I received a resume from Chasity, a woman with eight years' experience working in a dental office out West. I immediately called her in for an interview. Miracle of miracles, she knew our software and was experienced with insurance, billing, and collections—essentially everything we needed. Unfortunately, the dentist she had worked for had died of a heart attack not long after she moved East, but she had a couple of other references listed on her resume. I offered her the job at the end of the interview.

Up until last month, I was convinced she was the perfect employee. She was smart, she never missed work or took a vacation, and she was extremely conscientious. However, my opinion abruptly changed when I received a call from one of the third-party financing companies we contract with to allow our patients to make monthly payments on their dental balances.

The financing company called to report its audit software had picked up some irregularities in our accounts with them. That was when the investigation began. To date, it has uncovered more than $200,000 Chasity diverted from the financing company into her bank account. And get this: the first instance was two months after she started working for me. I had hired a pro! Not only that, her former dentist out West...well, he is not dead at all. He is alive and well. The two references on her resume? The phone numbers aren't even the businesses' real phone numbers. They are the cell numbers of two of Chasity's relatives. I talked to her cousins when making my reference calls.

But that is not the worst news. Not only have I lost $200,000 of income, but now I—not Chasity—must pay our third-party financial company the $200,000 she stole from them. According to them, I am the responsible party because my name is on the contract. Am I going to get a penny from Chasity? No. It is gone. It's spent somewhere...because all she owns is a run-down car.

And that is why I am here to share this with you today: I am terrified I might have to file for bankruptcy.

* * *

The timing couldn't have been worse for our doctor in this story, but it was perfect for Chasity: a new dentist-owner, a single-employee structure, a small workforce, and a desperate situation. Chasity knew what she was doing. She was experienced, confident, and had done her homework. She knew dentists often have weak hiring systems, fail to diversify vital financial duties, and frequently do not call references or verify information on resumes. Rarely had she even been required to fill out an employment application or undergo a background check when applying to dental offices. Yes, dentists were her "target clients." They were her cash cows. Veterinarian and doctors' offices had proven productive, but personally she preferred dental practices. It was simple luck finding one with a rush to hire. That always makes it easier.

Are you someone's target client? Do your practice's operating and hiring systems reside mostly in the heads of you or your employees? Are they based on best practices or are they reactionary? Do your financial systems follow recommended preventive standards? If not, you could be a prime target for fraud and embezzlement. Don't wait till someone's arrow hits your bull's-eye. Act now.

Reach out for help designing and integrating patient-oriented best practice systems in all areas of your practice. Specifically, start with incorporating preventive end-of-day reconciliation systems, credit balance reconciliation systems, and financial control systems. If you have questions about how to get started, contact me. It will take all of us working together to dim that fluorescent "embezzlers-welcome" target currently radiating from dental practices.

Apex360 Logo Ender


Sandy Baird Mba DentistryiqSandy Baird, MBA, is a practice management consultant, coach, and speaker. With 35 years of in-office experience, she offers valuable management services and practical advice. Her passion is to help dental teams conquer challenges, exceed goals, and realize their full potential. Contact Sandy at bairdconcepts.com, or at sbaird@bairdconcepts.com.

Also by Sandy Baird, MBA

True Dental Fraud: The lake house

A $998 ounce of prevention

How embezzlement hid behind an employee manual


Catch up on the Fraud Blotter

In our monthly Fraud Blotter column, Jean Patterson, Sandy Baird, and Teri Dervenis present real cases of dental fraud and best practices for preventing dental fraud.

An interview with a dental practice embezzler

The collateral damage of employee fraud

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


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.

Subscribe to the Apex360 e-newsletter here.

Dental news and press releases may be sent to Apex360 editors at dentalpress@pennwell.com">dentalpress@pennwell.com.


For the most current dental headlines, visit the DentistryIQ home page.


More in Industry
New Article