E1.14 | Detecting Embezzlement In Your Practice

Richie Guerzon: Our guest today may have one of the coolest jobs in dentistry. He chases and catches those who steal from dentists and orthodontists. David Harris is a CEO of Prosperident, the world's largest firm investigating financial crimes committed against dentist. He is also a forensic accountant, a licensed private investigator, a CPA, and the author of the book Dental Embezzlement the Art of Theft and the Science of Control. He's written over 30 articles for dental industry Publications and is a frequent presenter at Regional National and International Dental conferences. David, Welcome to our show.

David Harris: Thanks, Richie. Great to be here with you.

Richie Guerzon: This is a very interesting topic. When I hear about it, I don't think of it as being that prevalent in the industry. Can you tell us how prevalent it really is?

David Harris: Yeah, and I'll start by saying it's a lot more prevalent than we traditionally thought. You know, the number that I've given for years when somebody asks me about their lifetime probability of being stolen from was about 70% and that was based on a couple of studies done around 10 years ago. There was one released in February of this year. So, this was done by the American Dental Association and it's not specific to Ortho, but the ortho numbers aren't terribly different where they asked 17,000 dentists have you been embezzled from? Yeah and 47 percent of them said yes.

Richie Guerzon: And those are the ones admitting to it, of course.

David Harris: Well, those are the ones who know about it who admitted to it. But even if you leave that part aside just simply double that number because on average they were asked at the midpoint of their careers. If you double that number, the true probability is something more than 90%.

Richie Guerzon: That is very scary. Okay.

David Harris: In terms of orthodontists what I can tell you is that they represent about 6% of the community of dentists as a whole, but they are nine percent of our caseload.

Richie Guerzon: Oh, so they are much more prevalent in Orthodontics?

David Harris: If that is possible. It seems like it's even more likely in Ortho than in the rest of Dentistry.

Richie Guerzon: Hmm, I wonder is that it's a gross revenue is higher maybe?

David Harris: I don't think that's a factor. Embezzlement doesn't happen in general because of factors related to the practice. It really happens because somebody who's working there wakes up one day and says today I feel more entitled to the doctorÕs revenue than he or she is entitled, and that can happen anywhere.

Richie Guerzon: Absolutely, I'm sure. So, you wouldn't blame it on the doctor for that happening?

David Harris: I'd never blame this on a doctor. I mean nobody no matter how attentive or inattentive they are to running their practice, nobody should be stolen from. There's no circumstance where that's okay.

Richie Guerzon: So why are these people stealing?

David Harris: They steal for two reasons: need or greed. And needy thieves steal because their backs against the wall financially, you know, they're two months behind in their mortgage. They're about to lose their house and they're stealing to buy groceries.

Richie Guerzon: Also, there might be higher motivations for that now.

David Harris: Well, I was going to say, you know, there's going to be a lot of displacement in the economy and you know, the current shutdown is part of it, but there's going to be some longer-term changes. I mean where I am all the restaurants are shut down, for example and the head of the local Restaurant Association was interviewed the other day and he said, you know, I fully expect somewhere between 10 and 15 percent of these restaurants will not reopen so there's going to be some displacement in the longer term but in the short term, you're absolutely right. There are people not receiving paychecks right now, and that means that some families that used to be two income families are suddenly one-income family. Does that mean automatically that those people will steal? Of course, not, but some of them will, so we have needy thieves and then we also have greedy thieves and greedy thieves steal out of a sense of entitlement and there's that word. These people think that society is not paying them what they're truly worth and they steal to take what they think they should be receiving.

Richie Guerzon: Oh, so they see it as they should be receiving this anyway, so they totally feel justified in their actions.

David Harris: That's right because every thief needs to be able to rationalize. So, we've all learned from the time we were three years old that it's wrong to take other people's stuff and every thief has to get to the point where they say. ÒWell, I know that in general it's wrong to steal but it's okay in this case becauseÓ and what comes after that word because is interesting, you know, because the doctor would only waste it anyway or because she's under paying me or because whatever but they all have to get to that point where they can rationalize what they're doing. The greedy thieves are interesting. I mean, they like the money they steal but it's not really why they do it. They do it to address an ego deficit as opposed to a financial one. We have one of our alumni, as we lovingly call them, who was stealing. And then she won three million dollars in the state lottery. Okay. So, if most employees in an ortho practice 1 3 million dollars in a lottery that quit their job the next day you think and on the way, out the door, they'd say those things they never dared say to the orthodontist before. This woman didn't do either of those things. She kept working and she kept stealing but here's the interesting thing Richie, the amount she was stealing each month after she won three million dollars actually went up. She was stealing more. So, it had nothing to do with financial need at least at that point. She was getting some kind of biochemical rush from this like you might from skydiving or bungee jumping or something and she wanted it.

Richie Guerzon: That's unbelievable. ItÕs like football players who are on top of the world, then they just do something stupid like dog fighting, like what's wrong with you? Life is just giving you something so great. And that's a shame.

David Harris: I hadn't quite drawn that analogy but you're so right.

Richie Guerzon: Yeah people aren't happy with what they've got I guess.
Wow, so need and greed. Huh? So, which one is more dangerous for the practice?

David Harris: Probably greed. Needy thieves feel bad about it, but they just don't think they have any other choices. I mean, they've already borrowed all they can from friends and they've liquidated everything they can sell and they're just out of choices. So, they feel remorseful about stealing, but they just don't see that they have a choice and they tend to steal the that monthly hole in their finances.

Richie Guerzon: So, they at least see it as right and wrong, it's just something that they have to do while the other person is justified it, so to them it is kind of the right thing to do?

David Harris: Which means that there's no upper limit to what they will steal. They just do whatever they can and you're right, there's no remorse there. So, they're much more deadly to the practice. And these people tend to have a sociopathic streak so they bring other things to the bargain to. I mean, this is the person who will blame other people for their mistakes and a lot of times they can be an office bully as well. ThereÕs a lot more that comes with it in the case of the greedy people.

Richie Guerzon: So, are there patterns of behavior that you can look out for to identify people like this in your office?

David Harris: There absolutely are and there are a lot of them but I'll give you some to get the audience thinking. One thing that comes out over and over again in exit interviews with victims is territoriality on the part of the thief so this is the person whose possessive about their job duties. It will even normally extend to their work space and their computer. So, this is the person who will get mad if somebody else in the practice sits at their desk or touches their computer. ItÕs also the person who can be run off their feet with their job but resist over and over again devolution of any part of their duties to anybody else or even cross training somebody else to do part of their job because if you think about it, cross-training sort of opens the door to somebody's job being divided up a little bit.

Richie Guerzon: Yeah, that makes sense. So, they're super protective of everything you're doing?

David Harris: They are. This may be the person who refuses to take vacation and that's not always the case with embezzlers, but a lot of times this person will be reluctant to be away from the office when it's open.

Richie Guerzon: That's an odd trait because I guess you probably think that's great this person never takes a vacation theyÕre giving me value all the time.

David Harris: Yeah, a lot of things embezzlers do tend to get misconstrued by the doctor as being hyper dedication. The other the reason that people are reluctant to take vacation is it means that they lose control over the flow of information in the practice. If patients or their responsible parties start calling with questions about their bills, for example that are caused by what the embezzlers doing the embezzler wants to be the person taking that phone call.

Richie Guerzon: Oh, so they need to control the communication?

David Harris: They need to prevent that from escalating to the doctor and when they're gone, they can't do that. Another thing that's similar, but for a little different reason is that thieves often will try to work their schedule so that they get some alone time each week in the practice.

Richie Guerzon: ThatÕs interesting. The motivation there seems a little more obvious.

David Harris: Stealing takes concentration and it's hard to do that with the phone ringing and patients coming and going through the office and you know, the doctor whipping around the place. Whereas when you know, if I come in on a Saturday afternoon when the practice is closed, you know, it's much quieter and I can muster the concentration. And also, I just don't have the possibility that the doctor is going to poke his head into my workspace and say ÒWhat are you doing?Ó

Richie Guerzon: Yeah, let's chance of getting caught, right?

David Harris: Yeah, that's right. So, you know when you put doesn't want to take vacation together with works extra hours, although not necessarily working for the doctor. You're right the picture that a lot of practice owners reach of this is this is somebody who's you know, as more than one victim described it, you know, thought she would take a bullet for me. Yeah, and she would but only if she could resell it.

Richie Guerzon: Yeah, I would definitely look at those as high performance indicators during the review at the end of the year.

David Harris: And let's be clear that not everybody who has a vacation reluctance or not or everybody who works extra hours is automatically stealing. When you start to assemble a whole picture of somebody those are characteristics. The story I often tell is my dad is an attorney. He's 86 years old. He retired two years ago. But in the last 10 years that he practiced Richie, he never took a vacation. It had nothing to do with embezzlement. My mom wasn't healthy enough to travel and so what that meant is that if my dad took time off he'd end up sitting home with Mom, and they built their successful marriage on limiting the amount of time they spent together and my dad just wasn't prepared to push the envelope. So, he went 10 years without vacation so we should never let on to a single behavior and say this person doesn't take vacation, therefore they must be stealing. ThatÕs not the way it should work. But when somebody doesn't take vacation we need to understand why because it's something that has some element of irrationality to it and then decide if it's an issue.

Richie Guerzon: And at least it's something you can kind of dig into your data and discover the pattern a little bit. Are there any other things like that, where you can look at the data that indicates that?

David Harris: There are a lot of them. But you know, sometimes the analysis gets pretty technical. I'm not sure necessarily that you know, I want to turn your audience of orthodontists into a group of auditors.

Richie Guerzon: Well that said, how familiar should they be with her patient management system?

David Harris: Well, thatÕs one of my sore points, and let's be clear that in the clinical sense being a successful orthodontist requires delegation. In fact, almost hyper delegation. The thing that orthodontist struggle with on the business side is the difference though between delegation and abdication, and to me delegation means I give somebody responsibility, but they have accountability back to me. An abdication happens when I say to somebody I don't ever want to hear about that again.

Richie Guerzon: I'll just take it off my plate and no one complains. I'm happy about it. I've had managers like that.

David Harris: And there's a line there that probably shouldn't be crossed and unfortunately a lot of orthodontist aren't really sure where it is. I ran into a lot of orthodontists who don't really even know the first thing about their practice management software; abdication. They're about 95% of what that software does is stuff that most orthodontists will not need to know or master to do their jobs. But there is the little bit they do need to know. They need to know how to look at a patient ledger and make sense of it. They need to know how to print reports. They need to be comfortable looking at those reports and understand what's in them. And they should have some idea of which reports are good ones to look at. So, I'm not saying you need to be able to sit in your receptionist desk or your financial coordinators desk and do everything that that person would do to do their job. Absolutely not, that's not realistic or practical. However, you need to know enough.

Richie Guerzon: Yeah, I agree when I'm talking to someone from a marketing point of view. I always have Google analytics installed in your website. And I'd tell you more than half the time people either say no or I don't know. Yeah, and you know, they're saying they're spending thousands of dollars on marketing. So, I'm like to me that just seems crazy. How can you not know what's working or not? That's like the most basic form of measurement for your success in your marketing efforts

David Harris: Practice management software is a really integral piece of a doctor's financial success and unless you have some ability to gather information in it independently you are beholden to the staff member who's handing it to you and equally to their level of integrity. It's relatively easy for a staff member to construct reports that look like they're giving the true picture when they're not.

Richie Guerzon: That's counterintuitive.

David Harris: Every report has parameters or assumptions and if you let me print reports for you, I have control over those assumptions. Not you. Which means that if I want to I can I can produce reports that lie. I'm not going to talk about how to do it here but I can do it. So, unless you as an orthodontist have the ability to gather some information independently, you're forever victim to somebody who says. Alright, I'm going to I'm going to feed the doctor some wrong info.

Richie Guerzon: Yeah, that makes a lot of sense, and I'm such a control freak from my point of view I can't imagine doing that. I mean if you're constantly doing other stuff to run the business and it is different for orthodontics. They were forced to be small business owners and at the same time be a doctor and serve their patients. It's a tough.

David Harris: Nobody ever chose Dentistry or Orthodontics because they really wanted to own a business. Yeah right for everyone I've ever met they're great joy is in giving people terrific smiles and running the business is kind of the unwanted stepchild in the in the marriage.

Richie Guerzon: That's interesting and I hear there's not a lot even when they're in school. There's no marketing or business class.

David Harris: Very little. I mean, I guest lecturer in a couple of programs at the orthodontics residency at the Ohio State University and it's a bit of an anomaly here, right? There are lots of programs that don't do that. So, the OSU residents get a business course and it's taught by an orthodontist who brings in guest lectures and I'm privileged to be one of them. But yeah, not every program does that. Very few dental schools do and I guess at some level there's an inherent compromise between should I learn more clinical stuff or should I learn non-clinical stuff? Yeah, I guess we shouldn't really fault the profession for putting a priority on clinical education, of course, right? But what it means is that some people come out a little bit ill-equipped for what comes next.

Richie Guerzon: Are there any other behaviors that you just see in people?

David Harris: One that is a little bit subtle probably is what I call conspicuous displays of honesty. So, if you are a fundamentally honest person you probably don't really feel the need to keep showcasing that for everybody. You just assume that everybody realizes that you have integrity, and you don't have to keep drawing attention to it. So, when somebody makes a point of emphasizing how honest they're being or wanting to show somebody how honest theyÕre being. Yeah, that's a contrary signal in other words. That's a sign of dishonesty.

Richie Guerzon: Wow, another counter intuitive piece of advice, interesting.

David Harris: I was involved in a deposition of an embezzler a little while ago. So, this is an embezzler who's being questioned by attorneys and the deposition went on for probably an hour and a half and during that hour and a half period this woman must have said a dozen times the words ÒI swear to God.Ó Whatever came out of her mouth right after she said that was a big fat lie every single time.
And if you think about people who are truly religious, I mean, they don't need to invoke the deity when they're being honest. That just comes with being that religion of whatever faith they belong to. So, when somebody says that over and over again, that says a lot about them. So, they're conspicuous display of honesty is one thing. Another pretty constant signal about embezzlement is the person who resist the involvement of outsiders. So, from the perspective of a thief I know my doctor pretty well. I know what she looks at and what she doesn't and therefore I'm pretty good position to set up a plan to steal from her that won't get caught. When the doctor says to me, I have good news. We're going to bring in a consultant. Or, I'm bringing in the people from your practice from our practice management software to do some extra training or are CPAs going to get a little more involved in what happens in the practice. I mean in any of those cases as an embezzler that scares me, because these are people who aren't beholden to me. I mean, they're not under my spell in the same way that the doctor typically is. Furthermore, these are people who think about the practice of Orthodontics as a business and not a healing art. Yeah, so to an embezzler, this is all a huge threat. And if you talk to anybody who's in the Consulting business in Orthodontics, they all have a story about yeah, you know, I was hired by this office and the day I showed up the Financial Coordinator quit.

Richie Guerzon: What? Okay.

David Harris: Yeah, and of course, it's all about embezzlement. Of course,

Richie Guerzon: So, that's one reason to get one or at least talk about it.

David Harris: Well, you can I'll gently suggest that hiring us is probably a little cheaper and more direct solution to the problem but whatever works.

Richie Guerzon: So, what are some ways to prevent this?

David Harris: I use the word prevent very carefully, because I'm not sure there is such a thing and there are lots of articles out there and in the dental media about you know, 10 things you can do to prevent embezzlement in your practice, and they're always policies or procedures or controls. And this whole way of thinking is flawed. Let's say that you're an orthodontist and I work for you and my plan is to steal from you. And the first thing I come up with is well gee, you know, if dr. Richie lets me take the deposit to the bank, maybe I can just take some money out of the deposit. And one of the things that these well-intentioned dabblers advocate is you know doctor you really should make the bank deposit yourself. So, you outsmart me by taking the deposit to the bank yourself? Yeah, the question is what do I do next? Do I give up my plan to steal from you and go home and join the church choir, or do I just say I need a different plan. And I suspect we both know that the answer is the second one. In other words, you're taking the deposit to the bank. Simply makes me an unrequited thief. Yes, and now I'm thinking about well, what can I do instead because my need for money didn't change simply because Richie took the deposit to the bank himself. So, now I'm looking for a work around I can tell you one of our one of our staff sort of catalog the different ways that we have found people to steal and they're about 300 of them

Richie Guerzon: 300? That is very surprising.

David Harris: So, the idea that you can you know change five things in your practice or two things or 20 things and frustrate me as a thief is fallacious. The other analogy I'll give people is it's kind of like from the doctor's perspective, it's kind of like playing poker with somebody but your cards are all face up because as a thief I know you, I know how you think I know what you look at in the practice and more to the point what you don't. I know your habits. I know what the best day of the week is to steal from you. Based on all that knowledge. I make my plan.

Richie Guerzon: So, is it worth trying to plug some of these holes at all?

David Harris: Let's not be stupid and let's eliminate the dumb thieves. But at the same time, we have to acknowledge that the things you would have to do to totally eliminate embezzlement in your practice are really unpalatable. I mean a doctor asked me the other day, ÒWhat can I do to make absolutely sure I don't get stolen from.Ó My answer was really simple. Tonight, when you leave the practice turn out the lights lock the door and don't ever come back.

Richie Guerzon: Wow, IÕm sure that's what they wanted to hear.

David Harris: Probably wasn't, but let's talk about what we can do. otherwise those nice people in the audience are all going to be looking for Ativan and
I don't necessarily want to put them there. The first thing I'll say is that Orthodontics has gotten way out of step with how most of America hires.

Richie Guerzon: What do you mean by that?

David Harris: Well, I mean Richie I could not get a job with FedEx delivering the junk that people buy on Amazon without passing a drug test and yet I could work for virtually any of your clients without one.

Richie Guerzon: I didn't know that, that's interesting.

David Harris: Very few orthodontists drug test people before they hire them.

Richie Guerzon: I would think if you have drugs in the office that you would have some sort of drug test.

David Harris: Well, you don't necessarily have drugs, but you have prescription pads. And if I'm a druggie one of the best places I can work is some kind of dental practice. Now. I know most orthodontists probably prescribe narcotics very seldom, but they can. And as somebody who just wants to steal your prescription pads, you know, it doesn't matter how often you do it. It just matters that you could. I know somewhere that honest who don't even register with the DEA anymore and that's great. But most have the ability in their practice to prescribe narcotics.

David Harris: Another thing that is seldom done is a criminal records check. And I'm going to give you a statistic that will probably floor most of your audience. 65 million Americans have criminal records. So, that is one in four adults. Now to be clear, not every criminal record should stop people from getting hired.

Richie Guerzon: Yeah, of course. I mean, I would hope not.
David Harris: You know in about 17 States now marijuana is legal. When a state legalizes marijuana, they do not go back and wipe out the criminal records of people who were convicted for marijuana possession before legalization. So, you can be in California where marijuana is legal and you can have a criminal record because 20 years ago in college you got busted for possession. So, that particular criminal record at least for me wouldn't would not stop me from hiring somebody. On the other hand, somebody convicted of check fraud two years ago I'm not going near.

Richie Guerzon: Oh, yeah, it's red alert. And so, a lot of doctors aren't even doing that.

David Harris: What happens is doctors make hiring decisions or they allow their staff to make hiring decisions without a very good picture of who they're hiring. And there are people who just should never ever have a job in an ortho practice, who do. So, we should be checking criminal records. We should be looking at credit history. And again, I'll say the same thing about credit. Bad credit doesn't mean don't hire this person. It means understand why they have bad credit and then make a decision about whether or not that poses a threat to your practice. So, you're looking at hiring somebody as an assistant and they're a single parent with two kids and they're not getting any help from the other parent. They're almost guaranteed to have bad credit and that probably wouldn't bother me. On the other hand, you're looking at hiring somebody to be your treatment coordinator and her husband's a contractor and they live in the big house by the golf course and they have two SUVs in the driveway and they have bad credit. That should terrify a doctor.

Richie Guerzon: Now that's interesting. I see what you're saying because itÕs obvious when you say it.

David Harris: ThatÕs somebody who's not prepared to adjust their lifestyle to live within their means. And when there are other sources of other people's money dry up, the practice is next. So, we need to be interpretive with this stuff and we need to be able to put it into context and then make a decision. The problem with most orthodontists is they just don't have that that basic information and it would be kind of like treating patients without taking any radiography.

Richie Guerzon: YouÕre just going by your gut and hoping it's right. ThatÕs not a good way to run your business.

David Harris: I don't really care where the roots are. I mean, we'll just you know, we'll just move the teeth and hope for the best. Yeah, you know, and I mean every orthodontist in the audience is probably shuddering at the thought of doing that but that's exactly what they need to do when they hire people.

Richie Guerzon: Would you suggest you do this for your existing staff?

David Harris: ThatÕs a whole different animal and every staff member who's working for an orthodontist now has a contract whether it's a formal written contract or it's simply an implied unwritten contract. The way contract law works is that one party to a contract does not have the power to just going unilaterally change it. So, if you want to implement something like drug testing with your existing staff then that means to first of all you need to get very specific HR expertise and there are several HR companies that deal specifically with dentists and you know, there's a state specific component to this. So, each state has its own laws that govern it. So, you need to go and get specific advice about something like that. I'm not saying it's a bad idea. I think I would really be very interested in how many of my staff are high today. But that's something that requires a lot of notice and there's a there's a protocol that would be specific to a situation as to how you put that kind of thing in place. Other things too, although the only thing I'll mention is there may be some situations right now where staff have been laid off because of COVID where you will be bringing them back as new hires. And if so, then that does give you the chance to how you could have a different hiring process. The other thing I'll mention about COVID too and I talked about the economy that's going to be adjusting itself as people move from you know industries that are going to be hit by this a lot harder to others, you know all that repositioning in the economy gives orthodontists a chance that they haven't had in a long time. And one thing I've heard consistently from orthodontist for about the last five years in a booming economy with low unemployment was that when they were hiring people they never had a whole lot of choices from which to do it.

Richie Guerzon: Oh, yes, the pool of people was less because high employment.

David Harris: Yeah, you know an orthodontist would say, yeah, you know, I put out an ad in the in the usual media where we look for people and you know two people responded or people would ghost interviews because they would get you know, they would get a better job offer right in the middle of my application process. So, orthodontist were scared to do a proper due diligence process because they, you know, they thought it would take too long and they lose the opportunity. That's all about to change. There are going to be more people available when orthodontist reopen their practices, then they have had in a long time and they will have more choices and for me that's good news.

Richie Guerzon: Absolutely. You get the cream of the crop and really build the practice

David Harris: There are going to be lots of good people looking for work when everybody gets back to work. Some will come from within dentistry. Some will come from other industries, but suddenly you're going to have choices. So, you know that logic of well, you know, there's no real point in looking into these people too carefully because I don't have many choices anyway is gone.

Richie Guerzon: I'd hope that wouldn't be anyone's logic anyway.

David Harris: I've heard that a lot. You know, if I do the things that you tell me to do before I hire somebody David they won't be available at the end of that. Let's talk about some of the other things before you hire somebody. In 2020 I will not hire anybody without looking at their social networking activity.

Richie Guerzon: Yes, I've been doing that for years. I think it's so important.

David Harris: Yeah, well glad you have I think for some of the audience that might be a little bit revolutionary. LetÕs talk about what we're looking for.
I have a list and I'll give you some things you may you may have your own set of ideas. One of the first things I look for is anti-employer sentiment, you know, the person who's bashing their current job in their current employer is going to do that to you next. Another one that I look at that's a little bit more subtle is the time of day when people post stuff. Posting during work hours, that's a Time Thief.

Richie Guerzon: Oh, that's a good idea. I had never considered doing that.

David Harris: And when you hire them, you know, that's going to be the person who takes a half hour bathroom break twice a day and the rest of your staff are screwing around doing their jobs while they're in chatting with their friends on their smartphone.

Richie Guerzon: And that has such a bad influence for the rest of the staff because people start getting resentful I've managed many teams where we had to deal with those sort of issues.

David Harris: Well and not just that but then they start doing it themselves. Yeah, you know that one spreads like cancer. So, another one that we look at is high-risk lifestyle. You know, the person who says on social media because yeah, people will say this. Yeah, you know, I had a really good time Friday night not absolutely sure how I got home. This person probably has no place in my office. So, those are some of the things that people can look at but you can learn a lot about somebody on social media.

Richie Guerzon: And on all this is legal to just look at someone social media before hiring, right?

David Harris: It is. I personally would suggest that before you start this you get their written consent. Another suggestion I'll make for the orthodontists tune in and office managers if there are some is you need an application form when people apply for work with you. Yeah, and there are several reasons for that. First one is I find it much easier when everybody's information is presented consistently. So, if I'm looking at five application forms, and they're all you know, they're all set up the same way and everybody's fold them in the same way. I find it a lot easier to differentiate between candidates. The second thing is of course that will stop you from stepping into boundaries of prohibited discrimination. For example, in most places, you're not allowed to discriminate based on age within a certain range like aged 18 to 65. Yeah, so we shouldn't be asking people for their birth dates. Or the year that they graduated from high school. When you have an application form, of course, it's going to be designed in conjunction with your HR advisors and they'll stop you from straying into those areas. And another thing that you can build into the application form is for the applicant to sign a consent for all the things you're going to do that require their written consent. Like the criminal records check like a credit check if it's related to their job like looking on social media so they can explicitly consent to the steps that you're going to do. But let's talk about the big one that we haven't talked about before. Nobody should hire anybody without speaking to their former employers and my rule is really simple. I want to talk to at least everybody they've worked for the past five years. When you do that, there are a couple of things to keep in mind. The big one is that the applicant may not want some of those conversations to happen because they think that they won't go well. So, the first rule Richie is don't ever call any phone number that an applicant gives you.

Richie Guerzon: Okay, what'd you do then?

David Harris: If they say that they work for Dr. Smith in Akron, Ohio. Google is really cheap to use. Let's go online find Dr. Smith call that number. If you call the number that an applicant gives you, you may end up talking to their uncle on a disposable cellphone who pretends to be Dr. Smith and gives them a great review. The other one that you'll hear a lot from people is please don't contact my current boss because she doesn't know I'm leaving. It might be true, or it might be that this person was actually fired three weeks ago and this is their way of preventing you from calling somebody who's going to say, you know, I would not hire that person again in a hundred years. When you're faced with that, I know what most of the audience would have done yesterday. Yesterday they would have said okay. What I'd like them to say instead tomorrow is look I understand completely and I'd certainly never want to get you in difficulty with your current employer, but I'm also going to tell you that we don't hire anybody without having that conversation. In understanding your situation. I'm happy to put that to the very end of the process with you. But we do have to make that call before we hired.

Richie Guerzon: That's very fair, you can kind of put it in their court and then you can see what their reaction is to.

David Harris: Well and if it's a legitimate request you've understood and accommodate it exactly. If it's not a legitimate request, you've told that person that at the end of the path are going down is a brick wall. And what that will prompt them to do is just disappear. I mean you'll never hear from them again, which is exactly what should happen in that case exactly. I mean that's you know, that's worked. So, on the hiring side, those are some things that you can do. In terms of the rest of your practice. I'll give a few ideas. Okay. The first one is make everybody take vacation. No, excuse and take vacation make them take vacation. It's interesting the month of March which of course was when most Ortho practices in the country ground to a halt was one of our busiest months ever. The reason was you know, a lot of orthodontists put their staff on furlough and then they were in the practice doing stuff themselves. And suddenly they saw things.

Richie Guerzon: Yeah, that's interesting. So, you're getting a lot of calls on discoveries and question.

David Harris: Yeah. Yeah, you know, they're seeing things because all of a sudden it was down from a staff of 20 to a staff of one and the orthodontist was looking into some areas that he or she never had before and they said I don't like this. So, we got we got a whole lot of calls in a short period and that's why.

Richie Guerzon: Wow, so if you're forcing them to take vacation, are you suggesting when they take vacation to just kind of look through some things?

David Harris: Well, one of the best windows for catching what somebody's doing if they're doing wrong happens when they're not there anymore. When they've lost control. So, one of the biggest cases I worked on in the first five years of my career came to light, it was a to periodontist practice and it came to light when the office manager broke her leg skiing on the weekend. And so, one Monday morning for the first time in anybody's memory she wasn't in the practice and around 11:30 in the morning one of the receptionists came into the senior of the two doctors and tapped him on the shoulder and said I need to talk to you. And she brought him out of the operatory and she said I've gotten three of these very strange phone calls this morning. And it was three patients and there was something wrong with their bill and it was the same thing wrong with every bill and she said that that doesn't make sense. So, she went to see the senior doctor and he listened to her for a minute and then he called me.

Richie Guerzon: And it only took one afternoon for it to come to light just from the nothing it took it took one afternoon?

David Harris: It was $680,000. Which in those days, you know, we're talking in the mid 90s. That was a really big embezzlement and it would be a big announcement today. We see million dollar thefts today.

Richie Guerzon: Do the banks and insurance companies help protect you at all from this sort of activity? It's sort of my assumption.

David Harris: No, they don't. TheyÕre both big bureaucracies. They have lots of clients or providers in the case of insurance companies. I'll give an example thatÕs a little bit outside of Ortho, but I think most of our orthodontists will understand. One embezzlement case that we were involved in had the thief billing a patient's insurance company for work well beyond what was done and we actually saw 14 root canals on a 12-year-old in a one month period. But here's the irony.

Richie Guerzon: How could that not like have red flags all over from the insurance companies side?

David Harris: When I when I talk to people inside insurance companies their systems for that stuff are so primitive.

Richie Guerzon: That's surprising because I feel like if I do any transaction that's not normal on my debit card I get an alert.

David Harris: No, it took them over a year before they realized this. Yeah, so no they have other agendas first of all and secondly they just you know, they just have their own set of issues and they're not the doctors friend and I don't think any of the doctors in the audience would be laboring under the misconception that insurance companies or banks are here to help them. Their systems just aren't set up to catch this stuff.

Richie Guerzon: If anyone has any questions now's a good time. I'm sure we have more to talk. So, is there anything else during the hiring process that comes to mind that you should look out for?

David Harris: Don't look a gift horse in the bicuspids. Speaking with former employers is really important and we didn't talk Richie about what you should do when you do that. Yeah good point, you know because the first thing is if somebody has fired somebody for embezzlement or you know to say something that's topical these days not following a seeps is procedures properly or something like that the person who fired them may be a little bit reluctant to talk about them. So, how do we how do we get the information that we need in that case?
And I'll give a couple of suggestions. The first thing that you should do when you're speaking with a former employer is verify the person's job title and confirm their start date and end date.

Richie Guerzon: What is the purpose of that?

David Harris: Well, let me talk about title first. A lot of applicants for jobs give themselves that upgrade to first class. In other words, they worked in the last office and their job title was Event coordinator. Now they're applying at your office. What do they say their last job was? office manager. And you know, there are situations where somebody with the title of TC is actually doing office manager work. But the way you present that with integrity is a well I was the treatment coordinator at this last office, but then the office manager got sick and I ended up filling in for her, but you know, I never got the formal title. That's how you would present that with integrity, not just put office manager on your resume. But a lot of people do.

Richie Guerzon: Yeah, and if you're following up with the previous employer you asked about that situation.

David Harris: ThatÕs right. So, the first question I want to ask is about job title because if somebody's kind of embellishing what they've done thatÕs an easy way to catch it. Start and end dates is really simple. Let's say that I work for Dr. A for three years. Okay, and either I'm not stealing or I am and Dr. A doesn't catch me. And then I leave that job and I go to work for Dr. B for three months and she catches my hand in the cookie jar and she fires me. Now I'm applying to your practice. I'm okay with you talking to Dr. A because he thinks I'm good, but I can't let you call Dr. B because if that happens, I'm not going to get the job. So, I need to find a way to make Dr. B disappear off my resume, and one of the easiest ways to do it is called the stretch. And what the stretch involves is, I actually work for Dr. A for three years. But if on my resume I put three years and three months and you don't catch it, now I succeeded in what I was trying to do.

Richie Guerzon: That's such an easy thing to do that someone would overlook.

David Harris: It is and it may not be three months. It may be a stretch of three years. So, the key for the audience is not to give the start date and end date and ask for confirmation. In other words, don't say to Dr. A ÒSusie says she worked for you from January of 2013 to April of 2016Ó because if you say that to most humans their response is going to be Òthat sounds about right.Ó You need an open-ended question. ÒWhat was this person start date and what was their last day with you?Ó and then you can compare that to the resume that you have and if they're discrepant now, you know, you have a problem. Okay, so don't use the first choice here. The other question that I want you to ask a former employer is really simple. If this person was available and you had a position, they were suitable for would you rehire them?

Richie Guerzon: That's a fair question.

David Harris: Well, former employers are scared of being sued. So, you don't want to say to somebody ÒNo, I fired them because I caught them stealingÓ because if they go to court in two years and then get acquitted on some technicality their next step is to sue whoever said that for slander. But, if you simply say under no circumstance that I could imagine would I re-hire that person, that's a statement about what you plan to do in the future. Nobody can sue you over that. So, it's a safe question to answer and that's why you should ask it and the other thing is anything other than yes, of course means no. If you get an answer that's somewhere in the middle ground there, that means no.
It's just somebody who's scared or too polite to say it. By the way, that's also a good safe way for you to give a negative reference on somebody. So, you have somebody who stole from you or use the same set of set of gloves all day or whatever all you have to say is my attorney has told me to confirm employment dates for that person and only answer one other question and that question is would you rehire? And whoever hears that's going to hear a pretty clear warning so that's how to give a negative.

Richie Guerzon: My producer is asking if there's anything called, or do you have some sort of honesty test available.

David Harris: There's no psychometric tests that will test somebody's honesty. Yeah, and the reason is because people lie in tests.

Richie Guerzon: Right, especially if they think that's what it's for.

David Harris: I remember some company that does psychometric tests were talking about kind of Behavioral tests the disc test that most of the audience has probably heard of is an example of a psychometric tests. The disc test assumes that people answer the questions honestly, and they really have no good way of measuring if you don't. So, if you want to you know, if you want to show a different profile in disk, then reflects your true nature. You can do it. You just have to recognize which questions get at that dimension that you're trying to emphasize and then shift your answers to the questions.

Richie Guerzon: And I imagine if you are a dishonest person you're more likely to have that mindset to do such thing. That's the whole point, isn't it?

David Harris: I had somebody approached me about 10 years ago and say, you know, they were very excited about this. These were psychometric people and they were very excited about this and they said we have this test that will measure your level of honesty. I said no way. They said no we can prove it. I said well, I'll prove you wrong. I'll take the test twice and the first time. I'll do it. I'll take it in a way that proves that I'm honest and the second time I take it IÕll take it in an away the proves that I'm dishonest. Yeah last time I heard from them. It's an inherent assumption in any test that is trying to measure behavioral attributes is that the person wants them to be measured. And in this case, some people don't. It's a great question but no, there's no honesty test. I mean I've seen certain people advocate testing people's honesty within a practice, you know, and you construct a scenario where for example somebody the front desk is handed cash that's non-accountable and the classic case and this doesn't really fit the ortho context, but just to describe it for people. You know in a general dental practice. What you do is you get one of your friends to show up and say, I was in here 15 years ago and ended up not paying the doctor some money and I always felt bad about I mean I couldn't do it at the time because of circumstances but things are better now and I'd like to pay the $300 that I have owed for the last 15 years plop the cash on the table. And what you're trying to see is does the receptionist pocket that cash or turn it over to the practice.
Richie Guerzon: So, you are kind of baiting the person.

David Harris: But here's the problem with the logic. If I'm stealing, the typical amount that a thief steals in a practice is normally somewhere between two and four percent of monthly collections.

Richie Guerzon: That's quite a bit. That's the typical amount?

David Harris: So, I'm taking thousands of dollars a month, and somebody comes in and drops three hundred dollars on my desk and says here. What can I do with that money, Richie, that's going to get me the highest return on investment?

Richie Guerzon: Prove that I'm trustworthy?

David Harris: Yeah, the conspicuous display of honesty. And hand it to the doctor and say look. So, the problem is you can do this experiment and you'll earn less than nothing from it. In fact, it might push you the other way. What you can end up doing is believing somebody's honest where there's really no good reason for that belief. You know, if the money disappears, you know, you have a problem. But if it comes back you, you may or may not have a problem and you really have no way of differentiating.

Richie Guerzon: So, I noticed your kind of split your services into three different areas. So, can you tell us a little bit more? What is the diagnostic examination? What is happening there?

David Harris: We do three things. We deal with doctors who have a question about whether somebody stealing or not and we will and this is the important word in our process. Our process is stealthy. In other word, we do it in a way that those who are being investigated have no ability at all to know that we're on the job.

Richie Guerzon: I was watching some of your other interviews. I heard that it's very important, that specifically.

David Harris: If you're kind of at the stage where you don't really have strong suspicions, but you just want to know it's not happening. You don't want to go to your staff and say look I have questions about your honesty so I'm going to have somebody come and take a look. Yeah that will make staff meetings frosty for years. You don't want to do that. That and actually nobody is you know, when we get into the higher risk area you don't want to frighten a thief because they may do something crazy to try to protect themselves. So, our investigation work is all done in a way that it's undetectable to staff and I'm not going to talk here about the how but certainly if audience members want to contact me privately I'll have that conversation. We also when embezzlement has already been found. We normally are the Primary investigators who give people like police and insurance companies the raw material that they need to do their stuff and we will also help doctors set up their systems in a way that protect them a lot more than they are now. So, those are the three things we do.

Richie Guerzon: So, if you're not sure if you know what's happened, you kind of walk everyone through the process and you can lower the chance that it's going to happen to someone.

David Harris: Yeah, or the amount of time for which it will go undetected.

Richie Guerzon: It makes sense, more time more money for sure. If someone wants to get in touch with you, what should you do?

David Harris: It's easy to do, they can go to our website and most people won't have trouble remembering. It's www.dentalembezzlement.com.

Richie Guerzon: Yeah, that's a good name.

David Harris: The only trick in all that is spelling embezzlement correctly, but you know Google can help you. You can call us at our toll-free number which is 888-398-2327. You can reach out at my personal email address, which is just David@dentalembezzlement.com.

Richie Guerzon: Perfect. Great. Well, David, thank you so much for your time. I know I learned a lot. It's a Scary World out there. But now's a great time to look into all this it sounds like.

David Harris: It is you know, when we look at the constructive uses that the community that you and I serve can access right now, this is a great time to put some safeguards in place or if you have questions to bring us in to have a look we offer some special financing in the COVID era so we're quite prepared to work with orthodontist to fit within their cash flows.

Richie Guerzon: Oh, perfect. Thank you very much for that. Well, it's good talking to you

David Harris: You to Richie. Thanks for having me.

Richie Guerzon: Yeah, absolutely. Take it easy and stay safe out there.

David Harris: You too.