by By Stuart Oberman, Esq., Oberman Law
No dental practice is completely safe from employee embezzlement.
Editor’s note: Your dental customers may see themselves first and foremost as clinicians. Nevertheless, it’s important that they and their office managers recognize the signs of embezzlement risks and take necessary precautions to protect their practice.
Contrary to what many dental practice owners may believe, employee embezzlement is rampant and can occur at any practice. There are many different opportunities for employees to embezzle, and few that do are ever caught. Indeed, when dentists are focused on providing quality patient care, it can be difficult for them to monitor their employees closely. However, as practice owners, they must be diligent in watching for warning signs and take steps to try and prevent embezzlement from taking place. Following are some prevention steps that dental owners can take:
- Hire the right people. The first step in preventing employee theft is to make smart hiring decisions.
- Screen all potential employees. It is important for dental owners to avoid hiring relatives or friends of current employees. In fact, they should verify that job candidates are not related to their other employees before hiring them. Doing so can lead to conflicts of interest, and allow too much access to their business assets.
- Conduct background checks on employees. Before hiring an employee, dental owners should conduct a thorough investigation of the candidate’s background, including credit, employment and criminal history.
In addition, dental practice owners should educate themselves and their staff about embezzlement. They should learn to use their computer system, check all daily reports and question any and all adjustments. It’s important that owners be visible, vary their schedule, verify all credit card charges and protect their identity and signature.
There are a number of warning signs that an employee may be embezzling from the practice, including an employee who:
- Has financial difficulty
- Shows a sudden change in personality
- Has newfound wealth
- Is always the first to arrive to the office, and the last to leave
- Is very controlling
- Frequently takes work home
- Is resistant to change
- Frequently works overtime, without sufficient reason
- Never takes vacation, sick or personal days
Other signs of embezzlement include an increase in past due accounts or collections, complaints from staff about a particular employee, and inconsistent financial records.
Because employee embezzlement can be difficult to discover, it is important for dental practice owners to look for several warning signs in individual employee behaviors, as well as at the financial reports and documents they receive on a regular basis. If a warning sign is apparent, there are several things they should – and should not – do. First and foremost, the owner should contact a lawyer – preferably one who specializes in investigating employee embezzlement in dental practices. It is imperative to not alert staff members, as this could tip off the embezzler.
The dental owner might want to enlist the help of experts to assist with the investigation, but these people should not come to the practice during the workday, as doing so would alert the staff members. At the same time, it’s imperative to avoid engaging the help of law enforcement officials; this could create panic among the staff members and make it harder to catch the employee who is actually embezzling.
No matter how anxious they may feel, practice owners who suspect embezzlement must keep their emotions in check and refrain from making hasty decisions that could make the situation even worse.
Editor’s note: Stuart J. Oberman, Esq. handles a wide range of legal issues for the dental profession including employment law, practice sales, OSHA and HIPAA compliance, real estate transactions, lease agreements, non-compete agreements, dental board complaints and professional corporations.
