Spotting a Weasel: The Personality of a Dental Embezzler – Part VI

This is the final installment of our six-part series on Spotting a Weasel – the Personality of a Dental Embezzler.  For purposes of this series we’ve described each RED FLAG individually, but in reality they are all inter-related. When embezzlement is happening typically more than one RED FLAG is present. This is especially true of the last three we’ll look at in this article. These three are all-inclusive and really tie all of the 18 RED FLAGS together.

Look for additional RED FLAGS in 2017. In the meantime, be on guard at all times. We recommend that you “Trust but Verify.” And, contact us with any questionable situations that you would like outside eyes to help you evaluate.

weaselEagerly Takes Authority and Responsibility

Dental embezzlers endear themselves to the doctor by making themselves seem indispensable. They do this by taking on more and more authority and responsibility to relieve the doctor or other staff members of perceived drama and stress. They accomplish this in a narrative and stealthy way based on their ability to know the personality of the team and doctor.

As they provide more and more insulation for the doctor, they then have the ability to influence the doctor’s decision-making on almost, if not all, levels in the practice. The doctor is left with the feeling that he/she could not run the practice without the dental weasel, leaving the weasel free to run his/her embezzlement schemes.

As the doctor’s confidence in the dental weasel grows, he stops checking in regularly assuming that things are being done properly. He abdicates his responsibility for reviewing reports and practice metrics to the dental weasel handing over more authority and responsibility in the process.

The dental weasel will do everything possible not to surrender areas of responsibility to other team members or the doctor.

As a case in point, we worked with a practice where the doctor hadn’t been looking at practice reports or bank statements for over 5 years.  These reports, along with the practice policies and procedures, were being controlled by the office manager. As the dental weasel’s areas of responsibility and authority grew, they moved in a direction that wasn’t complimentary with the doctor’s financial goals or standard and patient care goals.

Wants Control of Adjustments, Discounts, Write-offs, and Refunds

The single largest way doctors can go bankrupt and/or are unable to retire is through unauthorized discounts, adjustments, write-offs and refunds! Through a series of complex manipulations, embezzlers can use these unauthorized transactions to take money out of the practice and put it in their pocket.

They can also use this practice to endear themselves to patients by giving them discounts, adjusting account balances and write-off fees that are not approved by the doctor. They may even suspend payments for a patient altogether and /or make special payment arrangements.

If the embezzler is in a clinical position they spend an inordinate amount of time with patients discussing the patients’ personal problems. They may affect payment obligations by walking the patient past the busy front desk, or insisting on checking the patient out themselves to “help” the overworked front desk team members. Clinical team members may even intentionally give away services to certain patients in order to further ingratiate themselves.

Discontinues Internal Controls and Policies & Procedures

The very first thing the embezzler will try to do is discontinue Internal Controls and Policies & Procedures as these are a major threat to the dental weasel’s ability to work schemes in the practice. The #1 Internal Control they want to eliminate is a patient sign-in sheet or electronic equivalent.

The dental weasel will also control the reports from the practice management and accounting software by altering the information the doctor(s) receives on a regular basis. The weasel delays and/or eliminates critical reports, including Day Sheets; Adjustments, Discount and Write-off reports; Bank Reports including statements, A/R; Insurance Aging; Credit Balances; etc.

More than 20 years of investigating fraud, embezzlement, waste and abuse in dentistry and non-profits has clearly established “Trust but Verify” techniques. Internal Controls and Policies & Procedures matter – No Debate!  The case outlined above, along with every investigation this year, reinforces the fact they save money, time, stress, and provide better standard and patient care.  The total amount our clients lost this year approaches one million dollars. Over the 20-year period, annual loss per engagement is growing due to the increase in the number and complexity of schemes being worked by dental weasels.

If you’re concerned you may have a weasel in your practice, we encourage you to call us for a free, no obligation 30 minute consultation at 210.241.6329.

Educating dentists on identifying embezzlers or fraudsters hiding out in their practices is our expertise. Contact us to speak at your next dental meeting or study club by sending an email to bryant@brytanassociates.com or calling us at 210.241.6329.

 

We want to thank Karol Peters and Ron Siemering, associates at Brytan & Associates, for their input on today’s article.

Spotting a Weasel: The Personality of a Dental Embezzler – Part V

By Bryant Truitt, MBA, CCS, CFE and Karol Peters, CDC, RDH of Brytan & Associates

This is the fifth installment of our six-part series on Spotting a Weasel – the Personality of a Dental Embezzler. So far, we’ve covered 12 out of 18 of the most prominent RED FLAGS indicating you may have a dental embezzler in your practice. The three RED FLAGS we’re covering today are further ways dental weasels ingratiate themselves with the doctors, other team members and patients to divert attention from the harm they are doing in the practice.

dental embezzlerSecretive – wants private office with door lock

Dental embezzlers truly resemble weasels in their efforts to be secretive about their activities. The dental weasel will want to have a private office with a door that locks for two main reasons:

  1. He/she can create embezzlement schemes in private
  2. It’s a sign of prestige putting the dental weasel in a power position in the practice

Often the dental weasel will gain more authority along with the acquisition of the private office by taking on responsibilities for managing personnel including handling disciplinary write-ups and reviews and managing the ‘locking’ file cabinet of personnel files. In these instances, the dental weasel acquires the role of office manager and insulates the doctor from the stress of managing the practice.

There are many excuses the dental weasel gives for wanting the private office:

  • They can get more work done without interruptions (e.g., general office noise; patient traffic, phone calls, office drama – see below, etc.)
  • They can handle difficult conversations with other team members – these are conversations doctors dread having. However, they are usually ones that the doctor should initiate instead of abdicating the role of leader in the practice. Once this occurs, the office manager is seen as the leader instead of the doctor.
  • It makes it easier for the weasel to do the doctor’s personal business without worrying about other team members being privy to that private information.

For an office manager a closed door is counter-productive to their main role of effectively managing the day-to-day operation of the practice. It removes them from providing timely oversight of the front desk and clinical areas. They are unable to hear things going on with patients that require their input.

No Vacations and/or Days Off and/or Eager to work overtime hours

Team members who want to do the practice harm cannot afford to take a vacation since they run the risk of someone discovering one or more of their schemes when they are not there to handle the cover-up. Additionally, by not taking vacation or time off, it furthers their goal of being indispensable to the practice. The only time the dental weasel takes time off is when the office is completely closed.

Dental weasels will:

  • Come to work even when they’re sick
  • Refuse to cross-train anyone to handle their responsibilities
  • Not take CE courses outside of the practice

The dental weasel looks for opportunities to work overtime. Overtime keeps them in the office by themselves and unobserved. Or, another ploy they use is to request remote access so they can get their after hours work done from home.

Drama – keeps pot stirred

Drama serves the dental weasel in many ways:

  • Drama is a way of distracting the doctor and other team members from the harm the dental weasel is creating in the practice. It keeps the doctor and team members focused on personnel issues, patient drama and/or the practice policies. These are often things that are manufactured by dental weasels to camouflage their schemes.
  • The dental weasel uses drama to gain additional authority, especially hiring, firing and disciplinary actions. Knowing the personality of the doctor and his/her desire to avoid conflict, the dental weasel is only too happy to become more indispensable to the practice by taking on this role. Furthermore, authority in the practice helps the dental weasel get rid of team members and/or vendors who are a threat to him/her.
  • Drama is an often used excuse to gain a private work area because he/she just can’t get his/her work done due to all of the distractions in the practice.
  • The dental weasel’s own personal drama is a way to draw the doctor into his/her crises in turn causing the doctor to empathize with the weasel’s problems.

A Real Weasel from our Files

A classic case from our files involves a weasel who joined a large successful; multi-specialty practice as an officer of the corporation. The weasel started out giving the doctors reports on production, collections and A/R, collectively and by provider. In the months following the hiring of the weasel, things moved along very smoothly. Reports were made available on a regular basis to the doctors, and they were pleased with the performance. As a result of this initial success, the weasel secured a private office in the practice and gained additional authority by controlling hiring, firing and management of all team members both front office and clinical.

Over time, the weasel began discontinuing practice management software reports to the doctors to the point where they were eventually receiving no reports. The doctors didn’t ask any questions about what happened to the reporting. Eventually the weasel discontinued entering invoices, data and other obligations into the accounting software. When asked by the bookkeeper about reports needed to complete quarterly financial statements and tax payments, the weasel would put her off.

During our popular boots on the ground investigation of the practice, we discovered the weasel had successfully blocked all reports going to the doctors, found a way to get credit cards issued in the weasel’s name and became a signatory on the corporate practice account. By obtaining a private office in the practice, the weasel was able to shelter activities to the point that the team and the doctors had no idea what the weasel was doing. This resulted in the weasel being undiscovered for several years during which time over $300,000 went missing.

If you’re concerned you may have a weasel in your practice, we encourage you to call us for a free, no obligation 30 minute consultation at 210.241.6329.

Educating dentists on identifying embezzlers or fraudsters hiding out in their practices is our expertise. Contact us to speak at your next dental meeting or study club by sending an email to bryant@brytanassociates.com or calling us at 210.241.6329.

 

We want to thank Karol Peters, an associate of Brytan & Associates, for her input on today’s article.

 

 

Spotting a Weasel: The Personality of a Dental Embezzler – Part IV

By Bryant Truitt, MBA, CCS, CFE and Barbara Freet, PHR, of Human Resource Advisors
This is the fourth installment of our six-part series on Spotting a Weasel – the Personality of a Dental Embezzler. In today’s article we focus on ways that the dental weasel infiltrates the practice to become an indispensable team member, including handling much of the dentist’s personal business, in an effort to set the groundwork for embezzlement schemes.

Dental EmbezzlerKnows the Personality of the Doctor(s) – Big Time!

There is no doubt that the dental weasel is smart. He/she is excellent at observation, carefully absorbing the personality traits of the dentist to become an expert in how to manipulate the dentist to give him/her more and more autonomy and authority to handle the business aspects of the practice. Dental weasels learn the strengths, weaknesses, idiosyncrasies and, oftentimes, secrets that allow them to control the dentist.

The weasel knows the three most important drivers of the dentist:

  1. Their first love is family – and they consider their dental team part of their family.
  2. They emphasize a high level of patient care – Dentists are highly sensitive to patient issues, especially relieving them of discomfort and providing them with a higher degree of self-confidence through a beautiful, healthy smile.
  3. Love of dentistry – Dentists prefer to stay in the operatory taking care of patients and practicing their expertise

The majority of dentists either 1) have limited knowledge of the front desk, or 2) are relieved to find an office administrator who is expert in the front office to relinquish that part of the business to. As the dental weasel earns more and more of the dentist’s trust, he/she will begin to manipulate the dentist to transition the monitoring of financial reports and practice management software to him/her.

Under the guise of relieving the dentist of stress so he can focus on what he loves to do, the dental weasel:

  • Eliminates the dentist’s ‘need’ to attend software training
  • Eliminates the number and types of reports that the doctor ‘has to’ review
  • Eliminates internal controls in the practice management and accounting software

By the time this happens, one or more scams are already in place.

Does all Hiring and Firing and Wage Increases

Dental weasels will never hire anyone who they perceive is stronger and more knowledgeable than they are, nor will they hire someone they can’t control. They look for team members who

can be molded to be totally dependent on the dental weasel and cover their improprieties. As the hiring ‘manager’ in the practice, a level of authority is conveyed to the office administrator further setting him/her up as the go-to person in the practice.

The dental weasel will often bring family members and friends into the practice to help establish or cover up scams. All hiring of family members, including extended family and friends, must be done with extreme caution.  Frequently the dental weasel will inflate the qualifications of family or friends to make them appear to be the most qualified of the applicants. It is imperative that the dentist, not the office manager or practice administrator, check references on all applicants to confirm their qualifications.  That means calling the doctor in previous practices even if the doctor is not on the list of references provided by the applicant. There are no laws requiring permission to call past employers. I would not call current employers without permission, however.

Hiring, termination and other HR decisions MUST be the sole responsibility of the owner doctor with appropriate advice from HR & legal professionals.  They should follow a well-defined process including starting with written interview questions, utilizing a complete job description, having the applicant fill out an application and then making the offer using a written offer letter.  After hire, all paperwork such as tax forms, an I-9, your employee handbook, and other state-specific required forms should be routinely given and documented, etc. This will show the dental weasel that you are organized and know and will follow legal hiring requirements.

Wants to Do the Personal Business of the Doctor

To further their total control over the dentist, dental weasels take on personal errands for the doctor gradually becoming as indispensable personally as they are in the practice. There are a number of very lucrative reasons for this.

  1. They want to know where the dentist’s personal accounts (banking, estate planning, credit cards, etc.) are to gain access to additional avenues to work their scams.
  2. Knowledge of the doctor’s personal business can give the dental weasel leverage in case he/she is caught in a compromising position.
  3. Our case files include dental weasels who have exploited a variety of improprieties to cover up his/her schemes including personal secrets of the dentist (e.g., mistresses, substance abuse, gambling, misappropriation of funds, etc.)
  4. Eventually the weasel convinces the doctor that he/she needs remote access to do personal business from home so the other team members are shielded from this knowledge. As we pointed out in Part III of this series, remote access is another way a dental weasel gains access to the practice to embezzle and/or do other weasel “business”!

A Real Weasel from our Files

We had a case in California where the doctor’s wife passed away and the trust fund she established was to educate their daughter.  The doctor had no business expertise. The tenured/trusted office manager was given check signing authority to pay the daughter’s education and certain personal expenses.  The OM paid the education expenses as directed but consistently included her personal credit card statements and wrote checks to herself.  We were engaged to complete our popular “boots on the ground” practice review, discovered the six-figure loss, and other schemes.

If you’re concerned you may have a weasel in your practice, we encourage you to call us for a free, no obligation 30 minute consultation at 210.241.6329.

Educating dentists on identifying embezzlers or fraudsters hiding out in their practices is our expertise. Contact us to speak at your next dental meeting or study club by sending an email to bryant@brytanassociates.com or calling us at 210.241.6329.

 

We want to thank Barbara Freet, PHR, President of Human Resource Advisors for her wise counsel on the Human Resources aspects of today’s blog post. 

Spotting a Weasel: The Personality of a Dental Embezzler – Part III

by Bryant Truitt, MBA, CCS, CFE and Ron Siemering, IT Director, Brytan & Associates

weaselThis third installment of our six-part series on Spotting a Weasel – the Personality of a Dental Embezzler outlines the RED FLAGS that arise from the computers and software systems in a dental practice. By recognizing the direct line into the financial systems of the practice that these software programs provide, dental practice owners can better protect themselves from dental weasels who make it their business to become experts in these systems.

Knows computers & software

In the dental practice, accounting software combined with practice management software controls all of the financial systems in the office. The dental weasel knows this and makes it his/her business to know the dental systems inside and out. This expertise allows the weasel to hide his/her schemes behind overcomplicated explanations and so-called ‘system glitches’ that explain away any anomalies.

Knowing that their dentist(s) are not proficient in these software programs, the weasel sets himself/herself up as the go-to person to explain day-to-day transactions and incongruities found in the programs and/or work product.  He/she is the office expert for all of the team members’ questions and issues allowing him/her to maintain oversight and control how his/her scams are being handled in the software. And, although QuickBooks, the predominant accounting software used by dental practices, has an audit trail, many dentists/owners don’t know how to find and protect it.

Furthermore, the dental weasel makes a point of getting to know software and supplies vendors   calling on the practice so he/she can learn new features and more intricate ins and outs of the programs. If his/her scheme begins to unravel, he/she quickly networks with vendors to find other practices using the same programs so he/she can move on to a new target.

A note on protecting yourself:

No one in the practice should have administrator rights over the computer systems or server except the owner doctor(s). Giving the office manager or another team member administrator rights is giving them the ability to control passwords for all team members and delete and/or alter the audit trail to cover her tracks – this is tantamount to a fox in the hen house with no doors – big time!                                              

Wants remote access – Big Time!

As part of the scheme of overall control over financial systems, the weasel is determined to get 24/7 remote access to the computer server to run her scams. There is NO good business reason why any salary or hourly team member should have remote access – no debate. The only person who should have remote access and administrator rights is the owning doctor. Your IT person should also have remote access but with different passwords than the doctor so an audit trail can be maintained.

A note on handling remote employees:

The population of work-from-home employees is growing in the US. We are aware of insurance billing companies who employ retired workers to process insurance claims or handle collections from their residences. There is a safe way to structure their access to practice systems that restrict security levels to only the information necessary to do the job.  

Beware of the team member who wants to work from home on a maternity, vacation, sick leave, claims they can’t get everything done, etc.  We have real dental weasels in our files who gained remote access for this purpose only to steal from the practice.  

Dislikes change – wants 100% control

The biggest threat to the dental weasel is a change in the dental software via upgrade and/or vendor. Learning a new system puts him/her on an even playing field with the rest of the dental team and takes away his/her perceived authority breaking his/her cycle of control. The dental weasel will fight all efforts to change practice management software or accounting practices. This is a definite RED FLAG that a scheme may be present in the practice.

Effective 1/1/2016 Federal HIPAA law requires that ALL healthcare entities must have two structured levels of security in place and change passwords on a regular basis. Many of our clients have a process to ensure that these changes are made twice annually. The dental weasel will combat this process by attempting to maintain the log of passwords and be the person to control the dissemination of new passwords and security levels. No one, not even the doctor(s)/owner(s) should have a list of passwords for team members.  This is one of the schemes in the example below.

A real Weasel from our files:

In a Texas dental practice, the office manager was running scams using the accounting systems and dental practice management software. As the office expert on the systems, all problems, and issues were brought to her attention. Her response would be either ‘it’s a glitch in the software’ or a ‘fat finger error’. She immediately took control of fixing the ‘system problem’. But, rest assured, it wasn’t a glitch. Instead these issues were giving her guidance on adjustments that she needed to make to hide her crime.

She was finally discovered when several front desk team members met with the owning doctor to present how cash was being consistently misappropriated and adjustments applied to cover-up the scheme.  We found 13 schemes used over four years to embezzle over $402,000.

If you’re concerned you may have a weasel in your practice, we encourage you to call us for a free, no obligation 30 minute consultation at 210.241.6329.

Educating dentists on identifying embezzlers or fraudsters hiding out in their practices is our expertise. Contact us to speak at your next dental meeting or study club by sending an email to bryant@brytanassociates.com or calling us at 210.241.6329.

Spotting a Weasel: The Personality of a Dental Embezzler – Part II

By Bryant Truitt, MBA, CCS, CFE and Barbara Freet, PHR

The following is the second part of our six part series on Spotting a Weasel – the Personality of a Dental Embezzler. The common thread in this group of three RED FLAGS are the outside influences that may motivate a team member to steal from the dental practice.

weaselAny age, gender, nationality or relationship

This category of RED flags encompasses the demographics of the dental perpetrator. And, in fact, it demonstrates that there is no commonality among these weasels – they can be any age, either gender, any nationality or any relationship to the dentist and/or team.

Gender: Dental weasels are predominantly female, although not exclusively.

Age: Age has very little to do with who will become a dental perpetrator. Instead, their commonality has more to do with the outside pressures that lead them to make the decision to steal from the dental practice.

Nationality: Dental weasels come from all nationalities. Our experience is that nationality is regionalized to a particular area of the country. And, we often see one family member getting a job in a practice and then bringing in extended family members – sometimes undocumented family members. It’s best to have the guidance of a strong Human Resources entity to counsel you on all hiring, termination and benefits decisions. HR laws, regulations and rules are changing at an accelerated rate as a result of city, county, state and federal entities becoming highly politically motivated to control their current and future interest for the better good as they perceive it.

Relation: It is very common in the dental industry for small practices to employ family members. A dentist cannot feel safe just because a team member is handling delicate financial or patient care matters. Relationships range from children, to wives, to daughters- or sons-in-law – being a relative is not a guarantee that the team member will not steal from your practice.

We’d like to note here that it is critical your dental practice maintains complete personnel files. Those personnel files should be kept in a locked cabinet in the dentist’s office.  All hiring, termination and other HR decisions MUST be the sole responsibility of the owner doctor with appropriate advice from HR & legal professionals.  They should follow a well-defined process including starting with a complete job description, filling out an application and all paperwork such as tax forms, an I-9, etc.

Has family turmoil, crises, etc.

The number of reasons why weasels make their homes in dental practices is as diverse as the weasels themselves. External factors create the need to support a variety of personal circumstances ranging from:

  • In one of our cases, we had the daughter of the dentist stealing money from the practice to fund her boyfriend’s drug habit.
  • A case in Michigan involved an office manager whose husband was a medically retired postal worker. The office manager was stealing money to pay for her husband’s prescription drugs. She also stole to purchase two snowmobiles and a boat.
  • In Texas we found a dental weasel stealing money to help pay for the mortgage on a second home.
  • Another scheme we see on the rise involves illegal enterprises who are approaching dental employees to steal patient data. The team member is either blackmailed into complying or paid to provide the data.

Lifestyle – high maintenance, addictive

Similar to the family turmoil and crisis category, team members who have a high maintenance lifestyle and/or addictive personality are under the type of pressure that can result in a decision to steal from the practice to support their habits. There is cause for concern when you encounter a team member who:

  • Just bought a new house or car or other expensive item but the spouse is out of work
  • Has a gambling problem or drug / alcohol addiction
  • Seems to always have new and expensive toys from expensive jewelry or handbags to electronics like new iPhones or iPads

A real Weasel from our files:

The weasel was working full-time in a California practice with an annual salary of $40,000. She was on public assistance and had a housing allowance and food stamps. Yet, according to her Facebook page, she was taking trips to Hawaii and led a high maintenance lifestyle. Conversely, the doctor had to cash in his 401(k) and take a second mortgage on his house to keep the practice running. In all, this weasel stole $135,000 from the practice over four years.

If you’re concerned you may have a weasel in your practice, we encourage you to call us for a free, no obligation 30 minute consultation at 210.241.6329.

Educating dentists on identifying embezzlers or fraudsters hiding out in their practices is our expertise. Contact us to speak at your next dental meeting or study club by sending an email to bryant@brytanassociates.com or calling us at 210.241.6329.

 

Contributing author, Barbara Freet, PHR, is the President of Human Resource Advisors, a Human Resource consulting firm in Lafayette, CA. For more information, contact Barbara by calling 925.310.4824 or barbara@hradvisors.net or visit her website at www.humanresourceadvisors.com.