How to Spot Dental Office Embezzlement Before It Costs You

Print & Go GuidanceBy Paige Anderson, CRDH

Dental office embezzlement is rarely a dramatic heist. More often, it’s a slow drip of numbers that are slightly off. Individually, these issues don’t look like much. Taken together, they’re often the earliest signs of embezzlement, and it’s a problem most dental practices will face at some point.

How can you recognize the signs of embezzlement in your dental office? More importantly, how can you protect your practice?

A Bigger Problem Than Most Dentists Realize

According to American Dental Association survey data from 2020, employee theft will affect roughly half of dental practices at some point. David Harris, founder of the embezzlement-investigation firm Prosperident, estimates that the average case exceeds $100,000 in losses before anyone notices.

While this problem affects all types of businesses, dental offices are especially exposed. Practices tend to be small businesses with trust-based teams where one bookkeeper or office manager often controls deposits, payroll, and patient billing with little oversight.

With many offices already stretched thin by ongoing staffing shortages, cross-training and separating financial duties can feel like a luxury your practice can’t afford, but it may save you thousands in the long run.

Spotting Theft in Your Dental Practice

Embezzlement tends to be a slow process disguised as routine business. Recent publications have highlighted specific stories that follow a similar narrative.

In Bedford, Nova Scotia, Dr. Phil Mintern’s office manager stole over $92,000 by skimming small amounts from hundreds of deposits, blaming discrepancies on slow insurance reimbursements. Dr. Stacy Gividen’s case started even smaller. Tiny discrepancies as small as $70 added up to a scheme totaling more than $160,000 in losses.

Both cases followed the familiar pattern: small, explainable gaps that quietly added up until someone finally noticed.

Red Flags Worth Watching

Dental office embezzlement is hard to catch because it’s done by trusted employees who work hard to make it indistinguishable from their normal routine. A few signals can tip you off:

1. Refusing time away from the office. Saying “no thanks” to vacation time or cross-training that takes them away from their desk may show dedication. Still, it can also be a sign of an employee who’s uncomfortable with anyone else touching their books because they have something to hide.
2. Always first in, always last out. Again, this pattern looks like a strong work ethic and could be just that. Or it could be an employee who needs unsupervised time near financial records.
3. Guarding their duties. Reluctance to delegate tasks or provide appropriate software access is another common warning sign.
4. Financial stress or conspicuous spending. David Harris refers to being either “needy” or “greedy” as the two most common reasons employees steal.
5. Rising refunds, write-offs, or billing complaints. As treatment costs climb and patients push back on estimates, it’s easy to wave off billing complaints as sticker shock. But a pattern of them can also mask fraudulent adjustments or phantom refunds.

Protecting Your Dental Practice Against Embezzlement

A few simple controls can reduce your practice’s risk without requiring an accounting degree.

• Separate financial duties. The person who opens the mail shouldn’t be the same person entering deposits or reconciling the bank statement.
• Get bank statements sent to a personal address or email, and then review them yourself, monthly, without exception.
• Restrict software administrator rights to the practice owner and require regular password changes.
• Require documentation for every check or payment, meaning an invoice or receipt, not just an explanation.
• Run background checks and reference calls before hiring anyone with financial access.
• Watch the numbers, not just the person. Compare collections reported in your practice software against actual bank deposits every month.
• Pay your employees a competitive wage. One of the best ways to defend yourself against employee theft is to ensure your team is getting paid well compared to average rates in the area so they don’t feel pressure to steal to cover their expenses.
• Create an environment of trust. A positive culture in your dental office helps your team feel supported and comfortable communicating concerns, whether that’s difficulty paying their bills or suspicions about a coworker stealing.

If You Suspect Employee Theft in Your Dental Office

Don’t tip off the employee. If your suspicion is wrong, you’ve damaged trust for nothing. If it’s right, you’ve given someone time to cover their tracks or worse. Loop in a specialist in dental embezzlement investigation rather than relying solely on your regular accountant, and contact your insurance carrier early, since documentation matters for any potential to recover your losses.

Dental practices run on trust. Between dentist and patient, and between dentist and staff. Embezzlement exploits exactly that, but creating an atmosphere of distrust creates hostility that your patients and trustworthy team members can feel. Consistently following good financial security habits gives you the peace of mind to keep practicing with positivity.

Author: Paige Anderson is a certified registered dental hygienist with eight years of clinical experience and an English degree. She blends her two areas of expertise to create resources for dental providers so they can change lives by giving their patients the highest possible standard of care.