The silent threat: Practice embezzlement in dentistry and preventing it

David Harris is the author of Dental Embezzlement: The Art of Theft and the Science of Control (Tellwell Talent, 2019). (Image: David Harris)

Mr Harris, could you tell us about yourself and your journey to becoming a leading expert on dental embezzlement?
I got into this career in 1989 completely by accident. A dentist friend suspected embezzlement and, in desperation, reached out to me. He knew I had an investigative background and, from some misadventures as a teenager, could understand how criminals think.

I solved that case quickly, but hadn’t yet decided to make a career out of it. Two weeks later, however, I had an appointment at my own dentist’s office, and before I went in, I glanced through the glass door and saw the same woman I had caught two weeks earlier sitting at my dentist’s front desk. I ran out, called my dentist, and he became my first paying client.

From those humble and accidental beginnings, Prosperident has grown into a highly professional company with 25 team members who perform hundreds of dental embezzlement investigations annually. Many of our team members have specialist expertise. For example, two members focus on investigations for orthodontic practices. Others work extensively with attorneys on litigation matters such as financial disputes between dental practice partners. Some of our fastest-growing work involves proactively assisting practice owners in reducing their embezzlement risk.

Over the past 25 years, a lot has changed in dentistry and in how we do our work, but the basics of how people steal—and the elation my team and I feel when solving a case—haven’t changed.

How prevalent is embezzlement in dentistry, and what are some key warning signs practice owners should watch out for?
Published studies confirm that nearly 50% of dentists have already been victims of embezzlement. Based on reasonable assumptions about what may happen during their careers, it’s safe to estimate that about 70% of dentists will be affected sooner or later. From our case files, the average amount stolen before discovery exceeds US$100,000 (€95,070^*).

There are many potential warning signs. Some are financial, such as discrepancies between bank deposits and collections recorded in practice management software, whereas others are behavioural, like an employee refusing to take vacations or frequently working when the office is closed.

Based on your experience, what motivates dental practice employees to commit embezzlement?
Employees typically steal for two reasons. Some are driven by financial desperation. They might be facing addiction, divorce or medical expenses. Often, they’ve exhausted their borrowing options and feel that they have no other way to provide for their families. These “needy” thieves often feel remorseful but see theft as their only option.

Others steal out of greed. These individuals believe that they’re not being properly compensated for their talents and steal to claim what they feel entitled to. These “greedy” thieves often spend conspicuously on luxury items and typically show little remorse because they feel justified.

What common mistakes do practice owners make that enable embezzlement?
Successful embezzlement exploits weaknesses in control systems. Many dentists allow overconcentration of financial tasks to one or two employees, creating opportunities for someone to both steal and cover it up. A proper division of responsibilities will force a thief to collude with a co-worker. Doing so carries significant risk and thus deters many from trying.

Another common mistake is confusing delegation with abdication. To function at a high level, dentists must delegate, but effective delegation requires accountability. This means committing time to overseeing tasks and acquiring enough knowledge to verify that they’re done correctly. Many dentists avoid this effort, offloading tasks without oversight, and this inevitably leads to exploitation.

What measures can practice owners take to prevent theft by employees?
Protection begins with hiring. Many candidates have a personal history that would deter hiring if it came to light. Unfortunately, many practices skip vital preemployment checks, such as criminal background screenings, reference checks and drug testing.

Next, practice owners must ensure accurate data entry into practice management software by thoroughly reviewing daily reports before leaving the office. Delaying reviews diminishes their effectiveness. Owners should also develop the habit of printing their own reports for review to avoid selective reporting by staff.

“Protection begins with hiring.”

A critical monthly task is financial articulation, comparing totals from daily reports to those of monthly summary reports to ensure that nothing has been entered after-hours in an attempt to hide it. Information on how to perform articulation is available on our website.

Finally, practice owners should compare monthly collections reported by the software to the actual deposits made to the bank after filtering out non-revenue transactions. These amounts should align, with the exception of timing differences.

You mentioned that it is crucial to hire the right personnel. What recruitment steps ensure a trustworthy team?
Hiring the right team is essential—not just to prevent embezzlement but also because your team represents your practice to the public. Dentists often dislike hiring and may cut corners, but this can have significant consequences. Even when struggling to find qualified applicants, practice owners should still perform thorough preemployment screenings to understand exactly whom they may be hiring.

Could you elaborate on how practice management software may help prevent theft by employees?
Most practice management software includes security features, but these are often disabled because staff find them inconvenient. For example, password expiration settings are commonly turned off, yet frequent password changes limit the risk of compromised credentials. Administrator rights should also be restricted to practice owners, but we often see that office managers have been given these permissions. Practice owners should review and configure software security settings to ensure maximum protection.

When embezzlement is suspected, what steps should dental professionals take?
Practice owners should avoid telegraphing their suspicions to the team. If their suspicions are wrong, they risk damaging trust. If theft is happening, alerting the thief gives him or her a chance to take damaging or extreme actions to protect himself or herself.

Many dentists turn to their close advisors such as accountants, practice management consultants or software trainers, but these professionals often lack the expertise needed to handle embezzlement matters. It’s critical to contact a specialist in dental embezzlement immediately.

Would you like to share anything else?
Yes! I’m looking forward to seeing dental professionals at my Greater New York Dental Meeting session, titled “Healers vs stealers; embezzlement in dentistry”, on Tuesday, 3 December, from 15:00 to 17:00 EST.

Editorial note: