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60% – not me!
Search the Internet for the term “dental embezzlement statistics”, and you’ll find many publications which claim that 60% of dentists will be embezzled during their career. My own experience obtained from conducting hundreds of embezzlement investigations over the last 12 years agrees with this statistic.
Putting the 60% probability into perspective.
Assuming that the average length of a dentists career is 30 years, and the probability of a dentist being embezzled during their career is 60%; then at any given time 2% of dentists are being embezzled. (60% / 30) = 2%
So, imagine that you are practice in a small city of 200,000 people, with 100 practicing dentists.
At any time, 2 dentists (2%) in your city are being embezzled. It may be Paul and Sarah today, and next year it will be Jason and Donna.
Stated differently, this means that 1 in 50 dentists are currently being embezzled. Think about that next time you are in a meeting room full of dentists.
1 in 50 is the frequency of occurrence, and to gain the full picture, we need to consider the average dollar for a dentist. Another widely agreed upon figure, and one my own experience supports, is that the average loss for an embezzled dentist is $105,000.
Let’s put the 2% frequency and $105,000 average loss into perspective.
Imagine that show up on your doorstep and demand that you play a game with me.
You must play this game, you have no choice.
The rules of the game are simple.
There are 50 one-dollar bills in a paper bag.
1 bill is marked with red ink, the other 49 bills are unmarked.
I ask you put your hand in the bag and draw a single bill without peeking in the bag.
- If you draw an unmarked bill, then you must return it to paper bag and draw again.
- If you draw a marked bill from the bag, then you must pay me $105,000.
This game will end when either of the conditions below has been met:
- you draw a marked bill from the bag and pay me $105,000
- you draw an unmarked bill from the bag 30 consecutive times in a row.
If you were given a choice, would you even play this game? Not likely!
But the fact is, dentists as a whole, play this game every day of their 30 year career.
While dentists as a whole have a 1 in 50 chance of embezzlement, individual dentists who take positive steps – such as implementing internal controls or having a continuous auditing and assurance program for their practice – will dramatically reduce their risk; so instead of 1 in 50, their odds may be 1 in 200, 1 in 500, or better
Many dentists become willfully blind to their intuition and gut feelings when they are confronted with the possibility of embezzlement, and experience fear, uncertainty and doubt. Those dentists fear that they will wrongfully accuse their employee of stealing; so instead they take a “wait and see” approach; believing that if embezzlement is occurring, something will happen to confirm or deny their hypothesis.
Those dentists usually end up waiting a long, long time. Which further adds to their uncertainty, doubt and procrastination.
My best advice is – when you think something “fishy” is going on in your practice, you should call me for a free consult. Don’t let fear, uncertainty and doubt cause you to procrastinate and let your concerns fall through the cracks.
Consults are free and confidential.
You know what time it is.