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.

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

weaselWelcome to our requested six-part series on 18 RED Flags that can help raise your awareness of a potential fraudster or embezzler in your dental practice. In each of these articles, we will do a deep dive on three specific characteristics giving you knowledge to identify potential gaps in your practice where a perpetrator could be weakening the foundation of your business.

These perpetrators are very much like “weasels.” They are stealthy, smart and very good at hiding their schemes. It takes a seasoned fraud investigator specializing in dentistry to uncover damage they’re doing to your business. However, being armed with these and other red flags can help you build good procedures and systems to assist in preventing the embezzler from getting a new home in your practice.

Model Team Member – Tenured & Trusted

One of the hardest things for a practice owner to handle is when a tenured and trusted team member is embezzling from his/her practice. Yet, very often we find that the perpetrator is the most seasoned and trusted person in the practice. Many of these people come to the practice experienced on the front desk and, over time, take on more and more responsibility eventually moving into the role of office administrator.

The team member handles everything on the business side of the practice which frees the doctor to do what he or she loves most – treating patients. The doctor begins to rely more and more on the administrator as she shields the doctor from the day to day ups and downs of the front office. The weasel’s expertise and efficiency creates a false sense of security, loyalty, trust, and team camaraderie.

Oftentimes, these weasels are what we call ‘practice skippers’ who move from practice to practice perfecting their schemes.  When things start to get ‘hot’ at one practice, they’ll use their network of contacts to find another with a similar structure where they can continue their hidden tricks undermining your standard of patient care and, ultimately, the practice you love.

Empire Building & Indispensable

As this model team member takes on more and more responsibility, he becomes the “gatekeeper” for everyone and everything in the practice. The trust he has built with the doctor means he is counted on to take care of all of the front office business decisions. The weasel becomes indispensable – his goal is achieved – he is the dominant team member with the doctor(s) and the practice.

He creates an atmosphere where all information and team members must go through him to get to the doctor. He controls all of the information, reports and communication between the front office and the doctor. In fact, the weasel is building an empire where the control of the practice is ceded from the doctor to him.

Wants Total Authority & Responsibility

In fact, the weasel gains total authority and responsibility allowing her to control the rest of the team. She controls what they know and don’t know regardless of whether they are clinical or front desk. She has the authority to approve virtually everything and is the one to take all issues to the doctor, including end of day and monthly reports, practice numbers, etc.

She often writes her own job description and the description of other team members. If not the sole hiring and terminating authority, she is likely involved in all human resource decisions. In her eyes the practice will fail without her, and she has convinced the doctor of this as well.

From Our Files – A Real Dental Weasel

In a very recent case, the weasel is a 20-year team member who was completely respected and trusted by the doctors. They never saw any practice statistics or reports. She controlled all of the information they received. They felt completely safe and trusted her with all facets of their business.

Her downfall was the discovery by two other team members that she was manipulating the practice management software and bank deposit slips so that she could walk out with all of the cash payments. These team members became concerned that they would be accused of wrongdoing and raised the red flag.

We determined this weasel embezzled over $200,000 in just 3 years and 6 months before she was caught.  More importantly, this was only one of 13 different schemes she was working in the practice to feed her “hidden financial need”.  Please stay vigilant – make sure you are requesting, getting, reviewing, and asking questions about your daily, monthly and annual reports – YOUR retirement depends on it – don’t let a weasel feed on your retirement!

Before closing, it is critical that we clearly state that team members may or may not exhibit one or more of these characteristics and may or may not be a criminal. However, the information provided should make you beware of seemingly model team member(s) who exhibit several of these characteristics (and those we will talk about in upcoming articles in this series). What is indisputable is that, in most cases, a practice perpetrator is someone you or your team are least likely to suspect.

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.