Dental Embezzlement News
Issue #30 -- January 2015
Did you miss a previous newsletter?  We archive them here.
See Us Live!
Here are some of the places you can hear us speak:
Jan 24-25
Carestream Oral Surgery Summit, Atlanta GA
Jan 29
topsFest, Atlanta GA
Feb 12
American Academy of Dental Group Practice, Las Vegas NV
Feb 15 Hurley and Volk Orthodontics Schaumberg IL
Feb 19
Ortho2 User Group Meeting, Scottsdale AZ
Mar 5
Pacific Dental Conference, Vancouver BC
Mar 6 Cloud9Ortho Users Meeting, Atlanta GA
Apr 9
New Orleans Dental Conference, New Orleans LA
Apr 14
Fox River Dental Society, Geneva, IL
May 8
American Association of Endodontists, Seattle WA
Jul 17 Patterson Dental, Nashville TN
Jul 31 Arkansas Association of Orthodontists, Little Rock AR
Sept 11
Northeastern Society of Orthodontists, Providence RI
Nov 5
ADA Annual Meeting, Washington DC
Nov 6 Dr. Bruce Fraser Study Club, Columbus OH
Nov 10 Limestone City Study Club, Kingston ON
Nov 13 Academy for Orthodontic Excellence, Newport Beach, CA
Nov 24 Lexington Oral Surgery Study Group, Lexington KY
To book a great speaker for your meeting or study club, please send an email here  or call us at 888-398-2327.
Prosperident's Mission
 “We eliminate uncertainty for dentists with embezzlement concerns and maximize financial and emotional recovery for victims.”

Our new financing partner
We are pleased to announce we have been approved by award-winning financial services company The Business Backer to offer affordable financing for our investigative services. 
Many dentists need our help but have concerns about cash flow (which, of course, is a common symptom of embezzlement).  The Business Backer offers a streamlined application process and quick approvals, even for a dentist with less than perfect credit.
For more information on this financing, please send us an email at

This Month in Our Electronic Store

We frequently get asked what a dentist can do to prevent embezzlement in his or her practice.  If you have been following us for a while, you have heard us say that prevention of embezzlement is probably impossible.  However, there is still a lot that a dentist can do to make embezzlement easier to detect and limit the damage that it causes.

One of our most popular documents is our "How to Beat Embezzlement in Your Practice" whitepaper.  This document is based on advice that we have been giving our clients for years, and our CEO made the decision to share this "inside information" with the broader dental community.

It's full of suggestions on how to monitor your practice and how to avoid hiring the wrong people, and includes our easy-to-use monthly monitoring spreadsheet.

As we know that many of you are still paying for Christmas (as are many embezzlers, which is why December and January are the most active months for embezzlement) we are pleased to offer the whitepaper for only $79 until January 31!  The information it contains is something you could pay a consultant thousands of dollars for.

For a direct link to purchase your copy, click here.

Embezzlement -- What a Busy Dentist Needs to Know
By David Harris, Prosperident CEO

It is a basic characteristic of human nature that we overestimate our own capabilities relative to those of others.  Behavioral scientists label this “Illusory Superiority”.
A familiar example is driving, where a 1981 survey found that 93% of US drivers rated themselves as having above average skill, and 88% considered themselves to be safer than average.  This is an obvious statistical impossibility. It also explains something important about embezzlement.

Embezzlement Basics

Prosperident is consulted on hundreds of embezzlement matters annually, and this work provides insight into embezzlement unavailable to anyone else. 
Embezzlement is rampant in dentistry; published statistics suggest that about 60% of practices will eventually be embezzled. 
One of the things that surprises me is that there are cohorts of practice owners who tend to consider themselves “immune”, and that this amount of perceived immunity is, like the number of above-average drivers, impossibly high.
Members of certain specialty groups have believed that embezzlement didn’t afflict them.  Many small-town dentists believe embezzlement is an urban issue.  Dentists whose practices are managed by their spouses believe they are embezzlement-proof. 
There is a commonly-held assumption that some practices are more “prone” to embezzlement than others based on various factors.  This misconception flows from a flawed understanding of how criminals think.

So How Do Embezzlers Think?

Like with any premeditated crime, there are three preconditions for embezzlement – motive, rationalization and opportunity.  A thief’s motivation is obviously outside of the practice owner’s control.  Some thieves are in desperate financial situations and steal to meet basic family needs.  Others steal because they feel society has failed to properly reward their talents.
Rationalizing embezzlement isn’t terribly difficult, and the perceived disparity in income between doctor and staff is frequently seized by thieves as “justification” for embezzlement.
Of the three pre-conditions, “opportunity” is frequently misunderstood by casual observers.  Intuitively, reduced opportunity should result in less vulnerability to embezzlement.
In fact, opportunity works differently.  It is a binary variable – either opportunity exists or it doesn’t, and as long as at least some opportunity remains, there is the potential for embezzlement.  I’ll also mention that opportunity exists in every practice and that there is no reasonable way to eliminate it.
The reason people inappropriately correlate opportunity with probability of victimization is that they don’t fully appreciate the difference between embezzlement and other crime.  In most economic crime, the criminal can choose their victim.  Therefore, a visible reduction in opportunity (for example, an alarm system) causes criminals to select a less defended victim.  Alarm systems don’t transform thieves into honest people; they simply encourage stealing from someone else.
What differentiates embezzlement from other economic crime is that embezzlement has a pre-ordained victim.  A reduction in opportunity will not cause a would-be embezzler to select a different victim, which would involve changing employers and waiting to acquire sufficient knowledge and trust to steal.
In this framework, the true determinants of vulnerability are motivation and rationalization, which are almost completely out of the hands of the practice owner.

But we have a strong system of controls, and our CPA firm looks at our books!

Now I’m back to discussing “Illusory Superiority”.  I wrote an article a couple of years ago where I discussed how playing chess with my son taught me about embezzlement.  My son is a decent chess player, but I have (so far) maintained my mastery for one reason – he forgets that he has an adaptive opponent who is able to perceive (and counter) his strategy. 
I’ll make the same observation about embezzlers.  Every embezzler performs the same exercise – they survey their environment, observe the controls in place, and design an embezzlement that overcomes or bypasses those controls.  Whether your practice is small or a large multi-site group practice, dental practices have more embezzlement opportunities than you could ever implement controls for.  The impact of implementing more or different controls is simply to prompt adaptation by the embezzler.
With respect to the involvement of your accountants, they normally are hired to perform a “Notice to Reader” engagement.  This involves the transmogrification of your information for third parties (e.g. your bank or the IRS), with no analytical review, and certainly no search for embezzlement.  And even if you select a higher level of accountant involvement (a “Review Engagement” or an audit), these are neither designed nor oriented to catch embezzlement.


So the series of controls you have put in place, and the involvement of your accountants are, unlikely to stop embezzlement.  Is stealing therefore inevitable, and what can be done to mitigate this problem?
Having devoted most of my adult life to dealing with embezzlers (and having been a miscreant myself in my teens) I can tell you with authority that there is virtually nothing that you can do to deter an embezzler from committing that first criminal act.  The best that we can hope for is to catch embezzlement quickly.
The challenge is the breathtaking variety of embezzlement methodologies that exist; we have observed hundreds of variations, and we keep seeing new permutations.
I’d like to leave you with a simple thought – research suggests that, regardless of how someone chooses to embezzle, the way that they act when stealing is predictable.  The Association of Certified Fraud Examiners reports that over 90% of embezzlers displays at least one behavior consistent with embezzlement, and that more than 60% of embezzlers display two or more such indicators.  The best way to spot embezzlement is therefore to monitor employee behavior. 
In our online store, we offer an Embezzlement Risk Assessment Questionnaire that provides a systematic way to evaluate the risk that you are being stolen from. You can get it here.  Completion of the questionnaire is the most effective 20 minutes you can ever spend on controlling embezzlement in your practice.

A Note From Our CEO:
Here's a Question...
Something I often get asked is whether more embezzlement takes place when the economy is in trouble.  The answer isn't a totally simple one, but it does show something interesting about embezzlers, so it is one that I am always happy to address.
An economic downturn puts some people in a financial bind; their spouse may lose his or her job, investments may devalue and falling housing prices may cause homes to be worth far less than associated debts (or can even make it difficult to obtain mortgage financing).  All of these things can exert sufficient financial pressure to cause a small minority of the population to steal.
We refer to this group as "Needy" thieves, and economic conditions can certainly increase their numbers.  However, we shouldn't forget that there is another cohort, which we label as "Greedy". Unlike the Needy, these people aren't stealing to survive -- they are stealing to purchase luxury items that they feel that they "deserve" but can't afford on what you pay them.  We've watched these people purchase everything from $150,000 automobiles to boats to lavishing expensive gifts on their friends.
Members of this group believe that society (and in particular, you, their employer) underappreciate their talents and value.  Stealing is their way of addressing this perceived inequity and tacitly demonstrating how smart they are.
I'll mention two things about this group -- they seem to be much larger than the Needy -- approximately 80% of the embezzlement we find involves Greedy thieves.  Second, the "lifestyle gap" that they perceive widens in a booming economy -- they see others "getting ahead" faster than they are, and this motivates them to embezzle. 
So, contrary to what you may have thought, we see more embezzlement in a recovering economy than one in downturn, but it involves a different group of embezzlers.

David Harris, MBA CMA CFE CFF
Chief Executive Officer
Prosperident -- The world's largest dental investigation embezzlement firm