TheWealthyDentist.com™ Newsletter Archive

News From The Wealthy Dentist #42: April 25, 2007

Editorial
by Jim Du Molin

Embezzlement Ridiculously Rampant in Dental Practices

I knew I was going to get some interesting responses when I sent out a survey asking how many dentists had ever been embezzled, but I still wasn't quite prepared for the results! Over half of our dentists responded that someone had stolen from them. In case any of you were still thinking that embezzlement isn't a big problem for dental practices, let this be your wake-up call.

But since I'm the one writing this column, we're going to start with another one of my stories!

Son-in-Law Tries To Buy Dental Practice with Money His Mistress Helped Him Embezzle

Some years ago, an elegant Southern gentleman approached me about his dental practice. He and his wife were the very picture of proper, classy Southerners. They were getting older, looking forward to retirement, and contemplating selling the practice to an associate. But they had just a few teeny little concerns they wanted to talk over with me first.

The associate looking to buy them out was their son-in-law. They liked the idea of keeping the practice in the family, but the associate and their daughter had been having marital problems.

"Hold on," I told them. "Your daughter's marriage troubles are a totally separate issue from selling your practice." It's rarely a good idea to confuse financial decisions with personal relationships.

The couple exchanged significant glances. The elegant gentleman sighed. "If only it were that easy." He went on to explain that he and his wife suspected their son-in-law was having an affair with the front desk manager.

"Well," I said, "It sounds like you might want to let the front desk manager go."

Another look passed between the couple. "There's more," he told me. He admitted that he was afraid his son-in-law and the front desk manager were working together to embezzle large sums of money from the practice. In fact, he suspected they were trying to steal enough money to buy the practice.

I was dumbstruck. I'm rarely at a loss for words, and, in my earlier days, I rarely turned down a client. But this soap opera was just too much! I gave the couple what advice I could and told them I was regretfully not able to take them on as clients.

Then I ran as fast as I could in the other direction! And said a little prayer for how blissfully simple my life is in comparison to that mess.

Dentist's Insurance Checks Pay Receptionist's Shopping Bills

A Texas dentist shared this story. Do people who do this sort of thing really think they're not going to get caught?

"We had a receptionist who was taking some of the checks were sent to us from insurance companies (payable to our office). She was signing the back of the checks herself and using the money to pay her various debts — as if we weren't going to see the canceled checks with her signature on the back paying her favorite department store bill! In Texas stealing mail is a federal crime... I wanted to throw her in jail, but my wife agreed to let her pay us back in installments.

"The worst part was that she apparently had done this at previous doctors' offices, including one I knew. He told me later that they were investigating her on similar charges, but his attorney told him he could not discuss it with anyone while they were building a case against her. Thanks a lot for the heads up when we called for a reference!"

Yes, Even Dentists Have To Pay Taxes

An oral surgeon from California recounted what happened to another doctor who neglected to supervise his accountant.

"I knew an oral and maxillofacial surgeon whose office manager/CPA did not pay payroll taxes for two years! Instead, he took some of the money for himself and gave some of it to the doctor. The doctor did not know any better; he thought he was just doing really well! The eventual IRS offer was $270K. It could have been much higher. The office manager/CPA left before the problem was discovered. He eventually confessed when the doctor promised not to prosecute him."

Dental Embezzler Kills Self Upon Discovery

A dentist from Michigan had the most shocking and tragic story of all.

"I discovered that my long-time financial coordinator was filing fraudulent insurance claims and diverting monies into her own personal account. Cash payments from patients were also skimmed. Upon confronting her, firing her and informing her that legal action was going to be pursued; she committed suicide at her home. She left a young daughter and loving husband. Very, very sad story."

And once again, I'm somewhat speechless. How do you respond to a story like that?

Next week I'll be back with even more tales of embezzlement — including one about a greedy office manager who got caught, fired, and sent to jail, only to get another job for the state where she absconded with over a million dollars!

Plus, you'll also find some valuable tips for avoiding embezzlement at your dental practice.

Jim Du Molin

Survey: Dental Embezzlement

In this poll, we asked dentists: Has your dental practice ever been embezzled?

Quick, check the cash register! The majority of dentists report having been embezzled. Fifty-nine percent of dentists in our poll responded, "Yes, I have discovered theft in my practice." Only 41% replied, "I'm not sure: I have never been able to prove an embezzlement took place."

For some of the most dramatic tales of theft, check out the editorial on the left, and stay tuned next week for even more stories.

Here are a few of the comments our dentists had to share:

"In my 24-year career it's happened twice. Both times my systems proved effective."
"The only embezzlement/theft/fraud I am aware of is time."
"Most trusted employee with video poker gambling addiction."
"I open my own mail 98% of the time."
"We prosecuted; she was convicted of a felony and given 5 years probation. We were fortunate to have insurance to recover the $30,000."
"A dental assistant who worked for another doctor who shared space with me was stealing my impression trays, alginate and bleaching tray material and solution and making bleaching trays out of her home after hours (and charging!)"
"How do you look for embezzling? I've heard that it is usually agreeable, competent, and apparently irreplaceable people who embezzle."
"Long term involving many thousands of dollars."
"Lab tech embezzled $8500, forging checks."
"My office manager (of course) was setting aside insurance checks... She did this for almost 10 years, for a total of at least $700,000. Her litigation is currently pending."

Read the full results.

British Dentists Told Not To Reuse Root Canal Tools

British dentists have been warned by the country's Chief Dental Officer not to reuse root canal instruments because of the risk of transmitting vCJD (mad cow disease). The warning applies specifically to reamers and filers, although the top doc also recommended other equipment (like saliva ejectors and aspirator tips) also be discarded after each patient.

Health officials in the UK estimate that anywhere from 1 out of 1,400 residents to 1 out of 20,000 residents carry the infection, although only a fraction show any symptoms. The disease is impossible to test for (at least in living patients), and current infection control standards will not prevent vCJD infection. The illness is transmitted via prions (essentially mis-folded protein molecules), not bacteria, viruses or parasites. Heat and disinfectants do not destroy prion molecules. There have been documented cases of patients infected via re-used brain electrodes or surgical tools.

So far, we in the US have been lucky to escape most of the mad cow scare. But just because we don't know we're in danger doesn't mean we're safe! Infections can take decades to show up, so it's better to be safe than sorry.

Is The Tooth Fairy Getting Stingy?

A recent poll by Securian Dental revealed that Tooth Fairy payments have dropped. Last year, the average reported payment was $2.00; this year, it's down to $1.71. This 15% drop is not matched by other economic indices, which have tended to rise over the past year. The payments ranged from 25¢ to $25. Parents reported earning an average of 49¢ per tooth when they were children.

The poll also revealed that 68% of parents report that their children brush their teeth twice a day. You don't need a math degree to realize that means that 32% of kids aren't brushing their teeth twice a day — that's one in three kids.

Well, at least that means dentists won't be going out of business anytime soon!

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