From Suspicion to Action: Handling Embezzlement Allegations in Your Dental Practice

The 'E' word. Embezzlement. A larger number of practices are victim to this than you might think. Casey and Jarrod walk through what you should do if you suspect a staff member of stealing.

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Episode Transcript

(00:03):
Hello, everyone, Welcome to theMillionaire Dentist Podcast, brought to you by
Four Quadrants Advisory. On this podcast, we break down the world of dentistry,
finances and business practices to help youbecome the millionaire dentist you deserve to
be. Please be advised we dospeak with an honest tongue and may not
be safe for work. Hello andwelcome. This is Casey Hires back at

(00:26):
the Millionaire Dennist Podcast in studio withco host Jared Dan. Thank you looking
good man Pocket Square. Yeah,got clients in from the East Coast today.
Right, you're looking pretty good too. You got a nice little orange
tie on. We're both wearing agray suit. I'm like a cream cycle
and a face for radio. Sothank god we're doing a podcast with no

(00:47):
video. Cream cycle. Hey,in this in this environment of inflation and
joblessness and just you know, despair, what's a good way for a practice
owners staff to maybe you know,have more money at home? Um,
you know, if the if thedentist isn't looking at the books all that
often, I'm pretty sure you canprobably skim right off the top there,

(01:07):
right, Just steal it, that'sright, Just steal that money. That's
right that you you uh, youwalked right into it. Yes, we're
not promoting for no dental staffs tosteal or skim, but we're certainly going
to jump into that topic today.That the E word cazement or it's a
it's a type of fraud as well. Yeah, so let me ask you,

(01:30):
Casey. You know you're out thereshaking babies and holding hands and all
that kind of stuff. We hadyears and years and years ago, had
talked about embezzlement and fraud and stufflike that before. Is this still a
prevalent issue today? I would saymore so given the current climate of the
economy, some people, you know, when some people get more desperate or
have fewer options, um, youknow, do the right thing or feed

(01:53):
your family, right. I meanthat's one of those questions you can get
into ethics, integrity, morality,all those things like what what do you
do? But yeah, I thinkin today's current climate, absolutely it's something
that people should keep their eye on. And here's the other thing. Staff
Right now, Staff's hard to comeby. So let's say somebody's just a
complete idiot and gets caught in theirmind, they might say, well,

(02:15):
I can I can just go getanother job because it's so in demand.
So yeah, I'd say the climatetoday's climate is ripe for fraud and buzzelement.
I mean really, there's there's noindustry that's safe from this. You
know, back in back when Iwas in high school, and even if
you're a thief, your thief partnermight steal for Yeah, there's no Yeah,
back in high school, I workedat I worked at a video store

(02:35):
and all of our candy and icecream was not kept on the books.
It was just a wad of cashwe kept in a video because that tape
and for our younger listeners of videostore was a place you would go to
buy or rent a VHS tape orCD DVD to watch said movie. Did
you know back then, back inthe eighties nineties, one VHS tape for

(02:58):
a rental store costs over one hundreddollars. No, that's why they charge
so much, relate FeAs and stuff. One copy was over one hundred dollars.
Wow, that's what they charge thevideo store. Looking back, that's
crazy. Yeah, we can godown that rabbit hole for forty seconds.
What about the things today? Doyou think we're overpaying for? Because the
systems. It's it's it's weird,man. The only thing that's gotten better

(03:19):
and the prices have gone down,it seems to be TVs. Quality gets
better and they're cheaper now, isn'tit weird? If you could have a
mechanism to hypnotize the populist that youmight find a way to get it in
everybody's home for a cheap price.Up, I'm getting, I'm getting in.
I'm getting too much in the weeds. That's that's it. Let's pivot
back to just the simple fraud andembezzlement, not not a so casey.

(03:42):
Let me ask you if if you'rethe owner, you're the practice owner,
and you suspect that something is happening, what are what are some things that
we should look at doing to getthat ball rolling? You should freak out,
break stuff, Ye, put theperson you think might be doing it
in a headlock and alert everybody.No, that's all the things you should

(04:04):
bad. No, you shouldn't dothat. But let's let's pick that apart.
Number one, you ask, isit still prevalent today? Yeah?
I mean i'd say what fifty sixtypercent? Some older statistics said, potentially
a dentist could be defrauded in theircareer, right, it could be one
in two. Wow, Right,I've been affected in some way? Yeah.

(04:25):
Yeah. And the average loss oflike one hundred and fifty thousand bucks,
that's just the average loss. Yeah, So a lot of these people
aren't just getting the ice cream moneythat you talked about at the video store,
right, skimming five bucks? Typicallygreed only grows, and so you're
talking fifty sixty percent of people couldbe affected by it over their career to
the tune of six figures one hundredand fifty thousand bucks. That's something right

(04:47):
there, No kidding. So ina general kind of way, how do
you feel that a practice owner,really, anybody who owns a business would
feel if they if they think thisis happening, Well, that's a good
question, right, they suspect something'snot right. Um, the more information
you gain, I think the lifecycle of emotion, right, you're probably

(05:09):
pissed off. Right, there's probablysome guilt involved, like gosh, I
should I should have been more awareof this anger and guilt. Then you've
got the feeling of of betrayal anddistrust because you don't know who that works
for. You could be doing thatit's the taste of betrayal. Yeah,
the taste of betrayal from which harderthan even bud light from what did your

(05:34):
a game? Brother? Right?That will let the audience interprets out however
they want. Right, that's right, well, and even fear right.
I think all all those can becommon. But there's a strong urge probably
to solve the problem immediately, right, right, And that's actually that you
want to do the opposite of thatinstinct that George Costanza do the opposite of

(05:54):
what you want to do. Yeah, you're gonna have missteps if for if
you're playing off the emotions that youfeel, you're probably going to overcompensate and
misstep what actually needs to be donein the unfortunate situation where you either think
you are or know you are beingembezzled from right, it's probably not a
bad idea too to get some professionaladvice in one of these situations as well.

(06:16):
You know, you're not a privateinvestigator or a police officer, so
having someone who has knowledge of thiscould be benefits. What do you think
about just getting some muscle and roughingsomebody up to get some answers? Do
you know anybody with muscles, notme either. But yeah, and I'm
not recommending going out and Nancy carryinganybody. Okay, okay, But in

(06:38):
terms of another really old reference,I know I've got it filled up here.
Our younger listeners are just gonna be, you know, be googling.
Is that they're gonna be looking upa lot of stuff doing the googs.
So you do a good job.I'll be standing somewhere and you like sneak
up on me like a ninja.I don't even know you're there, like
another sidler, right, another signfilm trying to walk on my tiptoes like

(07:00):
cat but stealth. Right, Let'sget into that. Once you have this
information, it doesn't mean that youhave to let on because ultimately you need
to be strategic about this and notOverrea and with everything else. Knowledge is
power if you if you reveal yourhand too early, it could bite you.
Yeah, and normally you're getting there'ssmoke, there's fire, but you
might suspect it, but it mightnot actually be the case. It can

(07:21):
straight up being an honest mistake.Well, let's pivot to what we talk
about. So often people's data numbersare incorrect and incomplete. Quick books are
behind Everything's just mistakes riddled everywhere.Sometimes embezzlement would be a better excuse than
just how ridiculously incorrect and inaccurate datainput is, but that could be the
case. So yeah, you don'twant you don't want to walk yourself into

(07:43):
a situation where you're placing blame onyour employees when it was your own bookkeeping
mistake. No, now's the timeto keep your poker face and and ultimately
take some time to figure out whatyou need to do. So you know,
Dennis typically does not know what tolook for. Right, A self
guided investigation is probably not going toaccomplish a whole lot. If you suspect

(08:07):
someone, you prefer they have noidea because then they're gonna just gonna destroy
evidence and you truly will never know. And so just playing it cool is
a really good first step. Andit's gonna be tough. I mean,
not everybody can be Colombo, butit's listen, I've been watching a lot
of Colombo lately, and he's healways traps them into something. But that's
really hard to do well magnum pi. That's old with Tom Selleck and new

(08:28):
New right now too. So justwhen you're when you're doing a magnum pi
side sort of investigation. Yeah,yeah, we're a Hawaiian shirt and a
mustache. The Ferrari's pretty dope.It's pretty dope. But yeah, a
lot of times, listen, youwant to maybe have a conversation with your
CPA, with an attorney, youknow, maybe even a dental software vendor.
There's a lot of places to gothat you can gather information. To

(08:48):
be in a position of power andknowledge, not emotion and reaction. If
you do happen to come across someevidence and with the people you're working with,
a roar with yourself. Make surepreserve the evidence. Take screen shots,
you know, back it up onhard drives, save it in the
cloud, find ways to show thatit's still there. I mean, honestly

(09:09):
what it's it's It can be veryeasy, especially in the world of computers
and digital situations, to change datanumbers or simply deliant, you know,
with all the technology and the passwords. It's fraud better or worse than it
was pre I don't know the answer. I'm just I'm just thinking about it

(09:30):
right all the I mean, fraudand embezzlement's been happening forever, and yet
we get all this technology and allthese passwords and like it has it improved.
I think the tough part is ismy experience with people sometimes like people
in this room who can never remembertheir zoom password is wait a second,
there's no one else in this room, bastard. But sometimes you know,

(09:54):
you trust people with your passwords aredifferent things. If that's not or forte,
if you're not the one running thebooks twenty four to seven, Yeah,
you might have an underlying do itwell Unfortunately, a lot of practices
they promote have or maybe don't have. But that family culture, that that
kind of kumbaya thing, and that'sa really cool place to be at and

(10:18):
to shoot for. That can alsogive you a false sense of confidence.
Shoot family, steal from family,So that family, that family culture,
doesn't mean that somebody might not bein a position where stealing from you the
quote unquote successful Dennis is a lesserevil than again, Yeah, random example
of feed my family one of theother things. And this probably goes to

(10:39):
your mind, in my mind oflet's play some bait. Let's catch them
right right, Actually, you know, put put in some extra cash somewhere,
or that's it just don't do itright because as a practice owner,
you're probably it's probably gonna be seen. You're gonna they're gonna see through it.
If there really is a perpetrator,a suspect, a perp, right,

(11:00):
it's gonna be oh man, theymust be honor me because this is
weird that they did right, thatthey did this right. You know,
don't change financial protocols, don't makeany big changes. You don't need to,
you know, go to the policewith I think and I feel ye,
and I want to just talk tothe police to make me feel better.
Again, that's probably not gonna bethe best thing. Here's the big
one. The first instinct confront thesuspect just to take a swing. Do

(11:22):
not confront the suspect. That's right, yeah, do not. Um,
there's a time when that's appropriate.But success rates of actually, you know,
getting a confession, making an accusation, you're pretty probably not just gonna
say yep, you caught me,sorry, right, So you need to
have a lot of data, backup, evidence, things of that nature.

(11:43):
And then when you present that evidencewith the right people, team and timing,
a lot of times they will thengive up that Yeah, that was
me, and then then the SOBstory comes. I know. Another thing
to not do is to contact yourinsurance companies right away. No, they're
probably not gonna be much help.They'll probably add some more headaches to the

(12:03):
thing, Yeah for sure, butthere there could be a time where yeah,
you can get recoup some of thatvia insurance. But what are those
unintended consequences? But yeah, notfiring somebody based off of very little or
zero evidence is not a great idea. A lot of states, um,
have a worker right you know,into their state state literature, um,
and you can very easily get sued, especially if you have no evidence to

(12:26):
back it up. Well, andit's good to have checks and balances again,
um, you know our our ourclients don't have to worry about that
because our comprehensive team is constantly monitoringeverything, right um. And so that's
not the case if you have checksand ballet mean a lot of the stems
from well, the practice the practiceowner and my boss is so aloof just
doing dentistry that I can get awaywith it. That's a lot of times

(12:48):
the starting point when they know hewon't see that this number for six more
months to a year when they knowwhen there's checks and balances, or there's
you know, an external team thatmonitors it, there's it's there's little chance
they're going to get away with it. So that's a deterrent in itself.
Now, some folks they're so intotheir quick books and their numbers and they're
always on it, and that's great, they won't get em bezzel from they're

(13:09):
also going to burn out and nothave a life because they're so involved in
it that there's like, nobody willever embazzle for me because I know everything
that happens. I got news foryou. If you're a practice owning dentists
and specialists and you're spending hours andquick books and dotting every eye and crossing
every t all on your own,that is boy, you could be producing
a lot of dentistry instead of doingthat. Have a team that doesn't have

(13:30):
checks and balances that do it.Absolutely, you want to be involved in
it. Sure, for sure youwant to be the executive summary level CEO,
not work or B data input whereyou know everything. Casey, where
are you going to be here ina couple of days where someone can actually
ask you some questions about this orany other business side of denistry. Was
it Biggie or Tupac that said,I'm going going back back to CALLI CALLI.

(13:52):
Can you insert that into this ordo we have to pay? Copyrights
have to be copyright But hey,you singing it and it's fine. That
was terrible. Yeah, I stillof out in southern California for a time,
actually going back to the South Bayarea El Segundo, California Top Golf.
That's right, that's going to bethis Friday. If you have not
If you're in the area and havenot registered, please go to four Quadrants

(14:13):
Advisory dot com slash events and clickon the one that says also Gundo.
Yeah, we're we're recording this afew days prior and we're close to that
capacity, so it should be agreat crowd. If it's already a capassed
by time you hear this, wellgive us a call given instead, we'll
help you out. And then onJune second, we're going to be at
the top Golf in Fishers outside ofIndianapolis, our hometown. Wait, I

(14:35):
don't have to hop on a flight, no, sweet, I'll be at
that one. Nice joked about it. Yeah, I'll are my fancy golf
pants. Wait, they actually havethose. Shoot, that's about to be
a joke. Well it's been it'sbeen nice talking to you as usual.
We only got part part of theway sidetracked by conspiracies. Conspiracies. I'm
just floating questions out and oh,I could just get in so much trouble.

(14:58):
I can't say that one. Okay, Yeah, we got to come
up with new ones because all theold ones are coming true. Hey,
let's wrap this up. Casey,thank you so much. I can't wait
to see what we're gonna talk aboutnext. Thanks Bo, thank you.
That's all the time we have today. Thank you to our guests for their
insight and for sharing some really greatinformation. And thank you to you the

(15:18):
listener for tuning in. The MillionaireDentist podcast is brought to you by Four
Quadrants Advisory to see if they mightbe a good fit for you and your
practice. Going over to four QuadrantsAdvisory dot com and see why year after
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