Guarding Your Dental Practice: Strategies Against Embezzlement with David Harris

David Harris 0:00

I always think of myself as so lucky to deal with dentists. I mean, they’re wonderful people. They really want to help their patients. They are healers and put other people first and try really hard to do good work in sometimes a challenging environment. So my admiration for them is just boundless.

Shawn Zajas 0:19

The future of dentistry belongs to the innovators. Welcome to Innovation in Dentistry. I’m your host, Shawn Zajas. And I believe that the future of dentistry is going to be unbelievably great over the next decade and two decades. But the question isn’t that. The question is, are you going to be part of what makes dentistry great?

Shawn Zajas 0:49

So I couldn’t be more excited today to have the chance to get to interview David Harris of Prosperident. Hopefully I’m saying that right. Before we dive into everything and I set you up, let me just say thank you so much for letting me interview you today.

David Harris 1:07

Oh, Shawn, it’s a pleasure to be with you. I’m really glad to get to know you a little better.

Shawn Zajas 1:11

Okay, so David, innovation in dentistry could mean so many different things. And the way the innovation plays out, it typically plays out in dentistry with either clinical innovation or technological innovation. But what I’m fascinated in is what is it that gets an individual to just feel like they have that permission to say, why not me? Like, why can’t I stand up and lead? Why can’t I start a consulting company or a coaching company or a software company? Because I’ve met so many dental professionals, dentists, hygienists, and the like, that love what they’re doing in the op. But there’s also something else inside of them that, whether it’s a passion or a calling, that there’s more. So I’m curious, because where you’ve arrived as CEO of Prosperident, and the value that you provide, I’m curious just about your story, A, into serving dentistry, but even into, you know, doing what you’re doing with embezzlement. Like, I have no idea how you arrived where you’re at. So I’d love to hear a little bit about that.

David Harris 2:21

Absolutely. And totally accidental. You know, people come to me sometimes and they say, so you must have had a vision, you had a business plan, you saw an opportunity, and you went after it. No. It came after me. My working life started a little inauspiciously, Shawn. I have the distinction of being kicked out of high school. I started to, you know, like all 15-year-olds.

Shawn Zajas 2:52

What grade? I need you to know.

David Harris 2:53

I was 15. I was a couple of months into my sophomore year. And I got, you know, my parents kind of got the eviction notice. So you’re 15 years old, you have time on your hands, you don’t make good decisions. And I didn’t. And pretty soon the police were showing up at my parents’ house pretty regularly. And eventually I got put in front of a judge. And he kind of looked me up and down. And he said to me, green or orange? Of course, I had no idea what he was talking about. And my face probably reflected that.

David Harris 3:32

And he read my look and he said, Mr. Harris, I’m giving you a choice. And the choice is what you wear next week. And now it kind of occurred to me, orange is what you wear in prison. And of course, green is the color of the army. So I chose green. You know, it went better with my complexion. And yeah, I just didn’t really like the thought of that prison jumpsuit.

David Harris 4:00

And to put it into context, this was 1977. So right after the end of the Vietnam War, not a time when a whole lot of people wanted to sign up. And the recruiters were happy to see me, even though I was a little underage. In fact, the recruiting sergeant helpfully went out for smoke and left the photocopier attendant just about the time I had to hand over my birth certificate. And away I went. And to everybody’s surprise, including mine, I fit in and it worked well. They ended up educating me.

David Harris 4:37

When I left the military, I had a college degree and went out into the world. And I worked for a bank for a few years. I was an investigator there. I got very frustrated one day and quit. The bank I worked for just was insistent on making the same mistakes over and over. And it just wasn’t the culture I wanted. So I quit my job at the bank. 1989 was when this happened.

David Harris 5:04

August of 89 specifically, I was sitting at home, watching TV, bored silly, and the phone rang. And it was a guy I’d been in high school with in my brief visit there who was now a dentist. And he said, I think my front desk person is stealing from me and I have no one else to call. So this guy caught me at the perfect moment. Like I say, I was absolutely bored. This sounded kind of interesting. So I said to him, okay, I’ll meet you tonight at your practice after it closes and we’ll get to the bottom of it. So I went to his practice. Now this was 1989 B.C., in other words, before computers.

David Harris 5:49

And it was the old pegboard system that was the forerunner of practice management software. So I got to his office and he shoved a pile of these ledger cards at me. Pegboard used to have a card for each patient with how much money they owed. Yeah, talk about, you know, talk about prehistoric. That was it. So he had these these ledger cards and he was thinking I’d go through them. And I said to my friend, you know, I’m going to solve this a little bit differently. Show me where she works. So he took me over to the suspect’s work area and I started going through her desk. And of course, my friend is just going bug eyed like you can do this.

David Harris 6:34

Yeah, no problem. It’s not her desk. It’s your desk. And what I found Shawn taped underneath one of her drawers was what we call in the trade her cheat book. So a lot of people stealing need to keep a record of what they’ve done so that they know what’s real in the in the accounts and what’s fiction. And now you’re more likely to see a spreadsheet, an Excel spreadsheet or something, but in those days it was like an old fashioned school notebook. So I found that once I found it, the whole thing unraveled pretty fast. And so my friend was glad that I found this. He wasn’t happy that he’d been stolen from. And he asked me if I’d come back in the next morning to help him fire this woman because he didn’t want to do that on his own. I said, OK, because I knew I’d be bored tomorrow, too. So I did that. We got her fired. My friend promised to buy me dinner that I’m still waiting for.

Shawn Zajas 7:34

Oh, no.

David Harris 7:36

And, you know, I walked away thinking, well, that was interesting, but I didn’t really see a career for me. Except two weeks later, lightning struck. And what happened was I had an appointment totally unrelated to this. I had an appointment at my own dentist’s office. And I got to the office and I had my hand on the front door and I was about to go in. And I looked through the glass panel in the door. And what jolted me was that the person I saw sitting at his front desk was the exact same one I helped fire two weeks ago at my friend’s office.

Shawn Zajas 8:14

Oh, my gosh.

David Harris 8:17

Yeah, what I said next was a little less polite than that. But, yeah, that’s, you know, this jolt of electricity hit me. I turned around quickly. I hope she didn’t see me. I ran to the nearest payphone because in those days you just didn’t carry a cell phone around. I called the practice and I didn’t know a whole lot about how dentistry worked. And I was grasping a little bit. I did know the name of an orthodontist in my town. So when she picked up the phone, I gave my name as that orthodontist.

David Harris 8:50

Calling for my dentist and I got put right through to the dentist. And once he picked up, I said to him, I’m not Dr. Jensen. I am David Harris, the guy who is supposed to be occupying your chair right now. Let me tell you why I’m not. And I told him about the bag of tricks that he had working at his front desk. And he panicked and he asked me, like, what the hell do I do now? And about a sentence and a half later, he hired me. And that was my first client.

Shawn Zajas 9:24

I’m like, this is talk about fortuitous. Like, yeah, you literally got pulled into dentistry because of crazy, fateful circumstance. And yet you were already ready for it. So you said, was your education as an investigator already from the military?

David Harris 9:48

Yeah, I started in the Army and then worked a couple of years in the bank doing fraud investigation there. So I knew how to investigate fraud. I didn’t understand at that point a whole lot about dentistry, but, you know, I’d like to say I learned. And now after 34 years, I’ve got a pretty good grip on it.

Shawn Zajas 10:11

So, David, if we could go back to 15-year-old David. 15-year-old David. I’m guessing, were you getting bored? Because I saw in your bio that you’re part of Mensa. So I’m guessing you’re incredibly intelligent. And at the time, what? High school wasn’t engaging. It probably wasn’t stimulating. And maybe some other things were going on. So you ended up, I don’t know, just probably not really caring much about it.

David Harris 10:39

That’s pretty accurate. I didn’t love the courses I was in, and I didn’t really see the purpose of them. And the parting of the ways, Shawn, came in history. So here I am in sophomore high school history. We are studying ancient Greek history, if you can believe it. And what I said to my teacher was, can you please explain to me what use this is ever going to have for me? And she gave me the high school history teacher answer. Well, it’ll help you predict the future.

David Harris 11:11

And I don’t particularly love 15-year-old David anymore, but I was a sarcastic son of a bitch. And I said to her, that’s great. Could you just show me one example of that? I mean, can you please tell me something that’s going to happen tomorrow or next week because of what you know about Greek history? And of course she couldn’t. And that was it. I walked out. You know, I don’t think a whole lot of tears were shed.

Shawn Zajas 11:39

So you also mentioned that you liked solving like puzzles, almost like right when you came to that girl’s desk, it was like this puzzle that you were trying to solve. Is that something that you knew early on just as a kid, like your parents were like, wow, David’s really good at, at deductive reasoning or like, was that something that kind of stood out from, from an early age?

David Harris 12:02

I guess so. I hadn’t really thought about it until you asked the question, but yeah, I always, I always enjoyed, you know, when you had 90% of the information to solve something and you had to go find the other 10.

Shawn Zajas 12:17

So, so when you’re in the army, you have these different options for education. What made you land on what you just cited?

David Harris 12:27

Well, the army promoted me quickly and they, they promoted me to a place where I was supposed to have a college degree and I didn’t. As we discussed, I also didn’t have a high school diploma and eventually that kind of became an issue and, and the army sent me away to college. And I never went back and finished high school. So I have a, I have an undergrad and actually a master’s degree and no, no high school diploma.

Shawn Zajas 12:53

That’s hilarious. So you don’t have a junior year. You didn’t go to prom, no high school like that. And then you just go straight to college.

David Harris 13:01

Well, and the funny thing was the same people who kicked me out of high, who saw me get kicked out of high school were in my freshman class wondering how the hell I got there.

Shawn Zajas 13:09

Oh my gosh. Okay. So you get this call though, from your friend, you investigate, you figure it out. Then you have to even fire. And then was it, you said two weeks later, you see the same individual. Wow. I’m even wondering how, um, I’m guessing the dentist, this is like a big, um, like it’s almost embarrassing on that dentist that hired her. Like maybe he didn’t check references, I’m guessing, or was it different in 18, 1989?

David Harris 13:40

It wasn’t different at all. Um, and, and dentists still do a terrible job of pre-employment screening. And of course, thieves know that. So if I have baggage and I want to get a job somewhere, I go, I go to a dental office because I know that their, their pre-employment screening is deficient. Um, let me be specific. First of all, 70 million Americans. So that’s one in four adults as a criminal record. And yet the majority of dentists don’t check for criminal records. Um, you, you mentioned reference checks and I, I’m going to, I’m going to suggest a slight change in verbiage because a lot of times

David Harris 14:22

when people talk about references, they’re talking about character references and it is not remotely important to me what somebody’s parish priest or their high school science teacher think about. I know what my high school science teacher thinks about me, but that’s, uh, that, that’s a slightly different story. Um, the only people I want to talk to, and I think it’s mandatory before you hire is everybody who’s been this person’s employer for the last five years. Um, bear in mind, Shawn,

David Harris 14:52

that if somebody has baggage, they’re going to do everything they can to prevent that call from happen. One of the things that we tell dentists, for example, is when you’re, you’re hiring somebody, don’t ever call any phone number they give you for a former employer, go online, look it up and call that number. Because we’ve seen more than a few cases where somebody has parked a disposable cell phone with their uncle and gotten their uncle to pretend to be the former employer and give a great reference.

David Harris 15:27

Wow. Yeah. People can be pretty creative. People can be creative. And what I’ll say about the dental profession in general is that they’re very bad with hidden agendas. First of all, dentists hate hiring. And I’ve been lecturing in a room of 300 dentists and I’ve asked for a show of hands of how many of them enjoy hiring staff. Zero. So it’s like any other job you really despise. My despised job is cleaning out the garage. And my happy time happens when I’m cleaning the garage and my 21-year-old son wanders

David Harris 16:06

by and he doesn’t appear to have anything more important going on. Because I’ll bring him into the garage and say, okay, you do that side. In other words, I look for a shortcut. And dentists who hate hiring sort of try to get it over with. And what that means is that a lot of things get skipped.

David Harris 16:27

Another one that I often talk about with deficient hiring is I can’t get a job with Amazon delivering the crap people buy online without a drug test. And yet the norm in dentistry, probably 90% of dental offices don’t drug test people on the way in the door. And it makes no sense. Dentists,

Shawn Zajas 16:49

hold the keys to the pharmacy. Right, right. Wow.

David Harris 16:56

Okay. So firsthand how much crime is driven by drugs.

Shawn Zajas 17:02

Okay. So let’s, let’s just, um, back up a little bit. So you, you get hired by this person, by this dentist that you’re going to, to get dentistry done, but you don’t end up. So did you end up going into the chair to get dentistry that day or not that day? No.

David Harris 17:19

Um, no, he, uh, he, he wanted me to investigate what she had done. Now he’d only, she’d only been there two weeks. I mean, it was, it was a pretty quick investigation. Um, and, but by the time I finished it, the local rep from one of the dental supply companies realized what I was doing. And he had two other dentists who had problems. And that was kind of the way it got launched.

Shawn Zajas 17:47

But you don’t know anything about starting a business at this point in time. You have now references. People are coming to you. What, what did this road look like for the next six months or a

David Harris 17:57

year trying to, did you incorporate right away? I went to see an attorney pretty fast and he said, yeah, you should have a, you should have a company. So that got set up. And, you know, after that I needed a bank account and, um, you know, all of the kind of trappings of, of business. I had none of it.

David Harris 18:17

But, you know, over the, over the next few months, I, I built that. And for the next, um, four or five years, you know, I was kind of just doing this on my own and word of mouth and kept, kept me busy. Um, the, the, the, the, the work environment really stank. In other words, back in the pre-computer days, you had to investigate onsite. So the way it would work typically is I’d meet the doctor after hours. They would hand me a key and tell me what time in the morning I had to be gone. And you just sit there in the office and work all night. Um, and, and yeah, that’s, that’s what my life looked like for a little while. Now, was that Prosperident or did Prosperident get morphed?

David Harris 19:05

It wasn’t, I didn’t have a name then. I mean, there, there was no name for a while. And then somebody said to me, okay, you really need to name your business. Thought about it for a while and didn’t, um, didn’t want to use anything with a name that had embezzlement in it because sometimes you need to kind of be a little bit under people’s radar. So, um, with, with the help of a guy who was with me at the time, we, we came up with Prosperident, which was just a contraction for the words prosperity for dentists. Yeah.

David Harris 19:41

You know, and it, it was kind of vanilla, which, which fit our needs. Um, once practices computerized, things changed a little bit. Once we had the ability to reach across the internet and get their data and work remotely, things changed a lot. And that’s when, that’s when Prosperident really started growing. Uh, we’re now up to, I think our current head count is 25 people and, um, we are dentistry only. We don’t, we don’t work with any other community.

Shawn Zajas 20:14

So 34 years, you get dragged into this, you learn along the way. What was there ever a time where you were like, uh, I’m great at the specifics of it, but I don’t actually know how to either lead or run a business. Like what was there ever this imposter syndrome that came like, wow, David, you’re in over your head. Or was this something that you just were, you were ready to handle?

David Harris 20:38

Um, it grew slowly. Um, like everybody else in the planet, I’ve probably suffered from imposter syndrome once or twice. Um, you know, and I can, I can remember, uh, the first time I was speaking to a really big audience, like 400 people. And, you know, you, you, you go, you go through those questions like, you know, is the zipper to my fly open? And, uh, you know, I really should have got my haircut last week and things like that. You know, you, you go through that. But no, for the most part, it’s been, uh, it’s been pretty comfortable and I’ve had good people around me. I, you know, I’ve got a really good management team who work with me and, um, you know, anytime I’m not absolutely sure which, which direction I should point the compass next, you know, they’re, uh, they’re, they’re, they’re there with me to help. So it’s, it’s been a, you know, it’s been a team growth and I cannot sit here and say I made Prosperident what it is. No, a lot of people did. Um, we’ve got some absolutely dynamic investigators. We have 18 investigators and, um, you know, we have, we have three levels of investigators. So they, they kind of start as a fraud examiner and they become a senior examiner and ultimately a supervising examiner. And I, I look at the group of supervising examiners we have, there are four of them and they’re phenomenal. Their, their ability to get inside the head of a thief, uh, just makes me sit back and admire some days.

Shawn Zajas 22:13

So you’ve built quite an enterprise, David. I mean, to have that many employees, um, you know, the reach of what you’re doing, I’m just saying that that’s not a, there’s no guarantee that when you start an enterprise or you start a small company, that it’s going to continue and continue to grow. And I can tell you’re someone that does right by people. You’re probably amazing to work with. Um, but I just know business is messy. Business comes with challenges and the marketplace shifts and, um, there’s recessions and there’s, uh, you know, pandemics. Yeah. Yeah. Like, was there ever a time that you went through almost like a dark night of the soul where it was either just difficult to get out of bed or, um, you just ran into it. I don’t know, just, just a obstacle that you weren’t expecting.

David Harris 23:00

Absolutely. I mean, COVID was, was certainly one of them. And as you know, it hit the dental profession hard and like anybody who makes their living from dentists when they hurt, we hurt. Yeah. And, oh yeah, there were some sleepless nights there. And, um, you know, fortunately we were well financed. We had a reasonable amount of money in the bank. Um, you know, I got together with my senior people and said, okay, we,

David Harris 23:25

we need to make some decisions and one decision that we made. And, and, and I’ll say, I, I had some opposition from my team on this, but I went to anybody we were working with. And I said, look, if you have cashflow challenges because of COVID, we’ll be there for you. So if you want a longer period of time to pay for the work we’re doing, we’ll give it to you. If you, um, really are having second thoughts about proceeding and you want to cancel our work now, you know, we’ll, we’ll settle with you. based on what we’ve already done, which is something we’d never done before. But, you know, we, we went back to dentistry and we said, we’re there for you. And our clients really appreciated that. I mean, some of them, you know, a few of them did bail from the work we were doing. Um, a lot of them took advantage of an extended payment period. Um, but they all said, you know, thanks for, thanks for putting our interest first. That, that means something. So that, that was, I think the most

David Harris 24:25

most challenging time I’ve had in business. And the, the other thing we started doing that, um, one of, one of my teams suggested, and my initial response was no. And then she, she persisted and eventually talked me into it was we started doing webinars and we did them once a week initially. And then, you know, as, as the world got back to work, we kind of slowed the pace down, um, because doing a webinar and the way we did them once a week was, was just killing us. Um, but, you know, I said to our team, uh, this is our chance to give back. So we’re not, you know, we’re not going to charge people money. We’re not going to ask them for anything. We’re going to bring them information and maybe some guests and, uh, we will give away kind of toolbox resources, but we’re not going to ask them for a thing. And so, yeah, we did the weekly for awhile and then we went to monthly and then we went to quarterly and we’re, we’re still doing them.

David Harris 25:27

But it was, you know, it was a chance to give back because the, the, the point that, um, I’ll, I’ll, I’ll name my colleague. She’s, she’s Amber Weber Gonzalez, who was actually there at the same conference where we met, uh, Amber heads our proactive department, which is, which is where we work with dentists to get in front of embezzlers. And she said, look, you’ve got all these dentists who suddenly have time on their hands because their practices are closed and, um, we should, we should give them some information. And my first thought was, no, you know, who’d be, who’d be interested in what we have to say?

David Harris 26:02

Well, um, the webinars kind of took on a life of their own. I think the most people we ever had in one was 2000. Oh my gosh. That’s unheard of. 2013 was our maximum registration.

David Harris 26:16

And, uh, yeah, it was, uh, it, they, they just kind of took on a life of their own. And again, it was all about coming from the right place and saying, let’s, let’s give back right now. Cause we can.

Shawn Zajas 26:28

Well, I love the way you do business. Um, looking at, looking at the 34 years and this journey, um, like I said, I see a lot of businesses that can be a one man show. Uh, they can be a small team of three to five, but. Scaling to that next place. It’s just, it’s not a certainty. So what, what could you name like a mindset that either you had to embrace or a mindset that you had to shed in order to get to where you’re at today?

David Harris 27:01

Absolutely. The, one of the big things is I had to let go of being an investigator. Um, you know, I had to move from, and it’s one of those old cliches, working in the business to working on the business. Um, and that was hard for me because that’s, that’s kind of what I do and what I think I’m best at. Um, and I had to let go of that.

David Harris 27:26

So like, you know, I still, to the chagrin of my management people, I still do a few cases a year. But, um, you know, my caseload is about one 10th of what our, what our busy investigators will handle. Wow. So that was, that was hard for me. And then, you know, the cases I do are, are, are ones now that are really, there’s, there’s something about them that, um, makes me better set up to handle them than anybody else.

David Harris 27:57

And, and I don’t, fortunately, I don’t see a lot of those cases because as I said, I’ve got some really, I’ve, I’ve got some amazing investigators. We, we all get together as a group every two years. We just, we, we just had our meeting two weeks ago and this is where, um, you know, we, we meet for two days and the whole goal of that two days is to advance the science of what we’re doing. And, you know, I, I, I sit back and I watch, you know, so this time we were thinking about things like, for example, how can AI, uh, impact what we do. And one of my team was, you know, one of, one of my senior people was leading that, that, that session, for example.

David Harris 28:37

And, you know, I just, I just sat back and looked because his, his depth of thought on it was way more than mine ever would have been. And, um, we had another of our senior people, uh, do a case presentation. So he was talking about a case he worked in where it was, uh, three owners of a practice and one of the owners was stealing from the other two. And, you know, it was the first time this guy had had that kind of case and he kind of took everybody else through his thought process. And it was, it was fabulous. Like it was a, it was such a good presentation.

Shawn Zajas 29:13

So like, I’m, I’m curious even just about, um, like, you know, with, with neuroscience and all the advancements, like you said, with AI, um, like this, this intuition even play a role in investigation.

David Harris 29:28

Like, is there, is there a place for that to a point? Um, one of the things that I had to do as I scaled upward was start with something that was basically a black art and move it to something that was replicatable. So our principle is very simple. If one of our investigators did an investigation and another one did the same investigation, they should get the same conclusion by the same results. So we, we’ve had, because when I started, yeah, you know, you, you, you were kind of like the pinball wizard, you know, you, you played by intuition.

David Harris 30:04

Um, and that, that can’t be the way you do it in a bigger enterprise. So we had to get our process into a series of steps that people could follow that would lead them to similar conclusions. And, but having said that, what I always say is what differentiates the great investigators from the average ones is that the great ones construct a hypothesis. In other words, they sit there and say, all right, if I were this person in this situation, how would I steal?

David Harris 30:42

The great investigators will come up with an answer and then they’ll go after that first. The average investigator will have 25 steps they have to perform and they’ll start at A and they’ll end at Y. And they’ll do A, then B, then C. The really gifted ones will say, no, in this case, I should start at L. So they’ll, you know, they’ll get to A and B and C, but they’ll kind of go where they think the buried treasure is first and then, you know, then look around at the rest of the yard to see what they find.

Shawn Zajas 31:20

So I bet you have a great perspective on the mindsets that dentists have that almost keep them blinded from believing that this is ever going to happen to them. I don’t know. Maybe, maybe people just go along and they’re like, oh my gosh, like that kind of thing. Yeah, you hear about it, but that’s not going to happen to me. And I don’t know. I imagine there’s some sense of denial, but what, what mindsets do you feel like hurt dentists because, um, or, or just set them up to be blinded by this?

David Harris 31:53

Well, you know, you and I have both, um, made our careers out of working with dentists and, and we probably each know hundreds of thousands of them. So I’m, I’m sure you’re going to, uh, see what I’m talking about. One dentist friend of mine described his work as follows. He said, what I do all day is I have people come in to see me for the most part, they leave looking exactly the same as when they came in. I solve problems typically that they didn’t know they had until I told them. And for the privilege of doing those things, I have to charge the money and sometimes hurt them a little bit.

David Harris 32:29

Um, what’s not to love about my job. Okay. That was, that was his description of his day. Um, and let’s face it, there are, there are parts of dentistry where life is a little bit different. If you’re an orthodontist, for example, you know, every orthodontist gets that wow moment when people get to, you know, when, when, when people get debonded and they see how they really look and they love it. Um, but for a lot of dentists, the way I just described it is the reality. So if you live that way and you ask people 12 or 15 times a day, how are you doing, Mrs. Smith? And three or four of them will say, well, great. If I wasn’t here, um, that reshapes people’s personalities over time, you know, when, and, and dentists get, I hate to say it, but they get a little bit of subtle abuse probably from a lot of their patients. It’s not malicious. It’s, but it’s there. And what do I think of as, as kind of the prototypical dentist personality? Um, they’re anti-confrontational. They look very hard to find the best in people. And as I said before, they’re people of science and they, they don’t necessarily function well when people have hidden agendas.

David Harris 33:50

So those to me are, are, are kind of the, the underlying behavioral characteristics, but I’ll add a few more. I, I, I always think of myself as so lucky to deal with dentists. I mean, they’re wonderful people. They, they, they really want to help their patients. They are, they are healers and, um, put other people first and, and try really hard to do good work in sometimes a challenging environment. So my, my admiration for them is just boundless. Um, but it’s, at, at some level, it also makes them easy marks. And I’ll pick up on what you said a minute ago. Life is a lot easier if you can convince yourself you’re immune.

David Harris 34:31

Um, and I see a lot of dentists, you know, when I start talking about embezzlement who kind of fold their arms and their face gets tight, you know, you can probably even see them bruxing a little bit. And what the whole posture and body language say is, well, you know, it might be you and it might be you, but it won’t be me. And if you ask them why, you know, what’ll come next out of their mouth is what I refer to as the immunity fallacies.

David Harris 34:58

Well, I practice in a small town, but really dentistry, embezzlement in dentistry is an urban problem. You know, it happens in big cities where you hire somebody who you don’t know very well. Or, well, I’m a, pick a specialty. I’m a periodontist. And really, embezzlement is what hits those poor general dentists, but we periodontists are immune. Or my staff have been with me forever. Or my spouse is my office manager. I mean, people will come up with reasons like this, why they’re immune.

David Harris 35:33

And when you start looking at embezzlement cases, those immunity things all break down. We see lots of small town embezzlement. Specialists, on average, probably get hit more frequently than general dentists. We’ve seen lots of embezzlement where somebody worked there for 20 years and then one morning came in and started stealing.

David Harris 35:58

And let’s talk about the final one I laid out, which is spouse is the office manager. And that works really well until that spouse decides that they’re going to trade the dentist in on a newer model. Oh, wow. Phone call I got once that has stuck with me forever.

David Harris 36:18

A dentist phoned me and he said, yeah, I married a woman who moved here from Thailand. And David, what I’m trying to understand is how come since she married me, all of her uncles back in Thailand, where the average income is about $8,000 a year, are suddenly driving $35,000 pickup trucks. And this woman didn’t want to ask the dentist for money, so she stole it. They’re not married anymore, by the way.

Shawn Zajas 36:51

Here’s the punchline.

David Harris 36:53

Well, I knew that was your next question.

Shawn Zajas 36:58

So are there like some warning signs or cautions or, I don’t know, yellow flags, red flags?

David Harris 37:06

All kinds.

Shawn Zajas 37:07

Okay. Yeah, I’d love to hear something, because it’s like, if a dentist is hearing this, it’s like, well, what should they be on the lookout for just to make sure this isn’t happening in their practice?

David Harris 37:19

A lot of things. And they kind of break into two categories. And there are some financial indicators that you have a problem, and there are behavioral indicators. So maybe start with the behavioral, because they’re easier to discuss and also easier to observe.

David Harris 37:39

More than 90% of thieves exhibit some type of behavior consistent with stealing. In other words, if you’re a dentist and I’m working for you and I’m stealing, there are probably certain ways I have to act in order to try to protect myself. And I’ll start with a really simple one. I’m probably pretty reluctant to take vacation.

David Harris 38:03

Because when I’m gone from the office, what I have advocated is control over how information moves through the practice. And a lot of thieves are territorial and they kind of isolate the doctor from a lot of communication in the office, which isn’t terribly hard to do because that’s probably where a lot of doctors would like to be anyway. Right. It solves a big problem. Like if you can alleviate this whole headache from me and I can entrust you with it, it’s great for me, except now that there’s that middleman, there’s less accountability.

David Harris 38:41

A lot of dentists have the clinical fantasy and I’m not talking about sex in the dental chair. That’s the other clinical fantasy. This is the one where I get to go in and I do high end dentistry every day and I don’t get dragged into the minutia of running the place. That’s that’s utopia for a lot of dentists. And if I’m an office manager who’s stealing, that’s also my utopia because now we don’t have a whole lot of contact over things like financial matter. You know, doctor, no, you just go do dentistry. I’ll talk to the patients about money.

David Harris 39:19

So I really want to isolate them. But also, if I go on vacation, that isolation ends, at least while I’m away. One case that happened very early in my career, it was a two dentist periodontist practice, and they got they got taken for about six hundred thousand dollars. And the way. Yeah, that’s it was big then. It’s it’s a little more routine now, but.

Shawn Zajas 39:48

Wait, how is that close to routine? I heard of, you know, someone that’s close to me lost eighty thousand. And I thought that was devastating. I thought that was like horrible.

David Harris 40:00

It is devastating. It’s also below average. The average theft now is about one hundred and ten thousand dollars. That’s the average. Wow. We see typically every year we’ll see a couple of people who we describe as being members of the million dollar club. Oh, my God. That’s not a club you want to be part of. Well, as a dentist, it’s not as an embezzler. It means you’re pretty good at it. It also probably means you’re in prison, but, you know, that’s that’s another story.

David Harris 40:30

So six hundred thousand dollars from this to two-periodontist practice. And the way that it all came unstuck was that the office manager had been there for like 20 years. One weekend she was skiing and she broke her leg. And Monday morning for the first time in anybody’s memory, Judy was her name. I don’t know why I remember that. Judy was not in the practice.

David Harris 40:52

And around 11 a.m., one of the one of the receptionists came into the senior doctor’s operatory. He was doing an implant and she took him out of the operatory, which was a huge no, no in their in their culture. And she said to him, doctor, there’s something weird going on here because I’ve gotten these three very weird phone calls this morning. And the three calls were all from patients complaining about their bill, not the amount, but the type of payment. So the calls were like, you know, I was in two weeks ago. I had I had a gingivectomy and I paid by check, but I just got my bill and it says that I paid by credit card.

David Harris 41:37

The calls were kind of along those lines. And had Judy been there like she was every other Monday morning, those calls would have gone to Judy. And Judy would have said something that would have made the patients just kind of go away. But with Judy gone, they went to somebody else. And that was the person who rang the alarm with the doctor and the doctor listened to the receptionist for about three minutes. And then he called me. And we came and started investigating and, you know, we found thousands and thousands and thousands of dollars. And if Judy had not broken her leg that Monday morning, for all I know, she’d still be doing it.

Shawn Zajas 42:17

So I’m just shocked that like that’s like day one, day one of the person not being in control and all of a sudden immediately something’s off.

David Harris 42:30

That is exactly what happened. So if I’m a thief, I don’t want to take vacation. The other thing we know about thieves is that they like to be alone when they steal. Partly it’s about not being observed, but the other part is it’s concentration. And it’s hard to generate that amount of concentration when the phone’s ringing and you’ve got patients moving around the office and staff and everything else. So a lot of thieves will plan their lives so that they get some alone time.

David Harris 43:00

And they arrive before everybody else in the morning or they stay late or they kind of make a quiet visit to the office on the weekend. Territoriality. So I mentioned kind of isolating the doctor from patient discussions. That’s part of it. But it goes a lot further than that. It also extends to I guard my duties pretty carefully. I probably don’t want to cross train anybody else to do any part of my job. It might even extend to somebody’s workspace in their computer.

David Harris 43:35

I got a call a little while ago from a dentist and she said, yeah, I, you know, my office manager was at lunch. We had an extra person and I had nowhere else to put them. So I put them at the office manager’s desk. And she came back from lunch and she lost it. Do you think there’s anything suspicious about that? And I said, well, yeah. You know, if I were the office manager and that happened to me, I would, you know, I would probably just take the doctor somewhere private and say, you know what?

David Harris 44:04

I have my personal stuff in the desk. You know, I’ve got a few personal things on my computer. Before you kind of invite somebody into my space, I wouldn’t mind you checking with me. I mean, that would be what I would say as an office manager, but in front of other people, she just lost it. And to me, that seemed like a huge overreaction.

Shawn Zajas 44:30

So, David, wait, I’m sorry. I’m just so curious. So if you’re speaking and you’re at an event and you’re sharing and people maybe didn’t go to this event just to find out if they’re getting embezzled. Do you see the eyes in the audience when all of a sudden they start like, oh my gosh, like, like, I’m sure you’ve seen that look of like where they go white or something. And it’s like, oh my gosh, I think this is happening to me.

David Harris 45:02

I’m a, I’m a very interactive presenter. I mean, I, I always am locked onto my audience’s eyes and kind of watching facial expressions and stuff. And yes, you can, you can absolutely tell when somebody is wishing there was an Ativan dispenser in the room somewhere.

Shawn Zajas 45:20

They’re like going over the checklist and they’re just in their mind being like, oh my gosh, six out of seven of those. Like that’s, that’s Susie in my practice or that’s, that’s Mark, you know, like that’s probably the worst thing. And I’m sure there’s a, there’s a measure of willful denial just because it’s gotta be a mess. I mean, how, what’s the typical, um, life cycle of when someone hires you to all of a sudden things legally getting wrapped up? Cause I’m sure discovering it’s one thing, but then all of a sudden there’s the whole legal mess that ensues afterwards, right?

David Harris 45:51

It can take years. Um, and, and I wish I had a better answer than that, but you said it a minute ago, the, the important step happens when you fire the person and that, you know, that leak that you have in your, in, in, in your, pocket suddenly gets sewn up. Um, after that, everything gets better. And a typical thief, Shawn will take between two and 4% of what a practice collects each month, you know, and 2% doesn’t sound like a lot, but if you think of the economics of a practice, you know, take a, take a practice that’s bringing in a hundred thousand dollars a month, you know, overheads probably consuming the first 70,000 of them.

David Harris 46:33

So what the doctors living on and saving for retirement and everything comes out of the other $30,000 and a thief can be taking 10% of that. For a lot of doctors, that’s their saving, you know, that’s their ability to save for retirement. They just walked out the window or walk out the door. You don’t walk out a window and mixed metaphors and getting rid of that person. And the other thing is that person is often toxic to the office culture because there’s this hidden agenda and it’s driving a lot of their decisions. You know, sometimes they will, you know, they’ll do a lot of things that are dysfunctional that may not at least directly have anything to do with the embezzlement. But you get rid of that person and all of a sudden the, you know, the office starts functioning better. The doctor has more money. You know, the, the aftermath kind of stuff where you, where you work on getting your money back and you, you, you put this person into the justice system. Yeah, those take a while, but that’s, that’s happening at a better time.

Shawn Zajas 47:46

Now, I imagine this is happening like in every form of dentistry, like not just the private practice, but the private practice that has a little bit more connection to, again, maybe autonomy. Now at the same exact time, the DSOs have processes in place to probably try and limit this, but there’s also less connection to the 50 entities that they have. So this must be happening everywhere.

David Harris 48:12

It is. We, we do a fair amount of DSO work and yeah, you know, DSOs have a couple of challenges with this. The first is hubris. I mean, some of them are, are afflicted by the disease that says we’re big. Therefore, we must also be smart. But in fairness to them, financial oversight of a DSO is a tremendously challenging process. And I was, we’re, we’re just starting to work right now with a DSO with about a hundred practices. And they are running, I kid you not, 17 different pieces of practice management software, because they’ve grown by acquiring offices and their policy. And I, I understand why they’re doing it. Their policy is when we, when we affiliate with a practice, you know, we’re already going to have some challenges in holding onto the staff and, and, you know, keeping everything functioning. And the last thing we want to do is say to them, oh, and good news, by the way, you have to learn a new piece of practice management software. So they’ve, they’ve left the software exactly where it was when they, when they affiliated. Beyond that,

David Harris 49:26

they’ve also basically left the control systems in each office as they were. So picture an office that a doctor owns, which means that they’re keeping some kind of eye on it. And then they affiliate with a DSO. And one of the reasons a doctor affiliates in the first place is because they want to get out of the, the running of the practice and they want to become a peer clinician. So the doctor who owned the practice mentally checks out. of, of, of the administration. So you have a set of systems that were there that the DSO is counting on to still function. And the doctors kind of abdicated. And that’s what you have. Then you have regional managers who in a lot of DSOs don’t necessarily come from dentistry. Um, there, there are some DSOs that like hiring from retail because they bring a customer service focus and, um, that’s, that’s great, but they, you know, they don’t necessarily have the ability to dissect what an individual offices.

David Harris 50:32

And then finally, we have the factor that you just mentioned, which is that, um, one of the things somebody must do when they’re stealing is rationalize. In other words, they must tell themselves that I know that in general stealing is wrong, but it’s okay here because, and it’s a lot easier to rationalize when you don’t really know the victims. Hmm.

David Harris 50:56

I mean, stealing from the guy or gal who works 30 feet away from you all day and signs your paycheck is harder than stealing from some private equity investor who you’ve never met. Wow. And so all those reasons, there’s a lot of theft that goes on in DSOs.

Shawn Zajas 51:16

Okay. So David, right now, if a listener is hearing this and they’re saying, Oh my gosh, like, I, I don’t know, maybe this is happening in my practice. Do you either have some like downloadable resource or do you have a webinar or where would you like their eyeballs to go so they can learn more information?

David Harris 51:34

Um, you know, the best thing, and we have a lot of resources, but, um, one thing I’d suggest is go right to the horse’s mouth. In other words, I am happy to talk to any dentist who hears this and says, Yeah, I’m wondering what’s going on in my practice. And, you know, call me and talk to me for half an hour and, and, and with, with no cost and no obligation. And then after that, decide what you want to do. If you, if you want to kind of go the most expedient route, that’s how to do it. Um, our website, which is www.prosperident.com has a lot of information. We also have a self-assessment questionnaire that we normally charge for, but I’m happy to give any listener or viewer of this podcast, um, the, the self-assessment questionnaire at no, at no cost. Um, that’s about a 15 minute job and people get a score on it and scored like a college exam. So if you get, uh, if, if, if you get a hundred, you did well, if you get 40, you probably aren’t going to phone your mom to brag about it. Um, so any, any of those things are available. Um, yeah, our website has articles and, uh, all of our past webinars. I mentioned our webinar series, all of them are available on our website as well. And, uh, yeah, we’ve, we’ve talked about a lot of different things in those webinars.

Shawn Zajas 52:58

Okay. So David, here’s a question in closing. Um, everything that you’ve learned so far in your professional career, you know, as, as an investigator, as a CEO, as someone that’s been leading a very successful enterprise, um, imagine you are now walking down the street and you see 15 year old David, the one that just got kicked out of high school and you have a moment just to share one sentiment with him. Um, based off of everything you’ve come to learn, what do you share with him?

David Harris 53:32

Um, buy Apple stock when it’s still $10. That would be my share. Um, in, in terms of, uh, what would help David in business? Um, what would I say to him? Hmm. Uh, trust your gut. Um, keep good people around. Don’t be scared to fire them because I think one of the failings I’ve had as a CEO is that I’ve been too loyal to my people sometimes. And I’ve, you know, I’ve, I’ve kept people around that I shouldn’t have. Um, I think those would be my invocations.

Shawn Zajas 54:18

You know, David, thank you so much. Um, this is kind of a topic like on the dark side of dentistry. It’s something that people probably don’t mind learning about from afar. Okay. The statistics. Okay. I don’t want to hear too much about it. But the second it becomes upfront and personal, there’s so much reassurance to know that there’s companies like yours.

Shawn Zajas 54:42

What Prosperident has been doing the last 34 years is there’s no way to say the value because again, I had a close friend that went through a situation just like this. And the way that it messed with their identity, second guessing, man, who can I trust? How come I didn’t see it earlier? The way that it even messed with the culture. It is so challenging. And to know that, again, there’s a company like yours that is trusted that they can walk through and get just that expert take on it and just get that help. Like, it’s amazing. I love what you’re doing. I love what you’re doing in dentistry. And just thank you so much for letting me interview you today.

David Harris 55:24

Thank you. It’s been a pleasure. And I’ve had fun talking to you.

Shawn Zajas 55:31

Awesome. Hey, thank you so much, David. Thanks for listening. And be sure to follow so you never miss an episode. To learn more about what’s going on in dentistry, check out innovationindentistry.com.