A very common misconception I hear from dentists who have been victims of embezzlement is this:
“A bank can’t (or won’t) deposit checks written to the practice into an individual’s personal account.”
My response?
“Wanna bet?”
It’s an uncomfortable truth—but one every practice owner needs to understand: banks do not always verify that the person depositing a check is the rightful recipient. This loophole creates an opportunity that many dishonest employees are all too willing to exploit.
In many of the embezzlement cases Prosperident investigates, we find that trusted employees—often long-term, well-liked office managers or administrators—have quietly stolen checks intended for the practice and deposited them into their own accounts.
At first glance, this sounds impossible. You might think, “Surely their bank would catch that! The name on the check doesn’t match the name on the account.” Unfortunately, that assumption creates a false sense of security.
Why Mobile Deposits Make It Easier
Back in the days when cashing a check required face-to-face interaction with a bank teller, it was much harder to negotiate a check payable to someone else. Increasing automation in the banking system has made cashing stolen checks significantly easier.
Mobile deposit systems rarely involve full human review. Once an image is uploaded, automated algorithms perform basic checks—none of which involve verifying the depositor’s name against the name on the check.
By eliminating face-to-face interaction, mobile deposits also lower the psychological barrier to theft. All an embezzler needs is a smartphone, a bank app, and a few minutes of privacy.
If a bank rejects a stolen check presented electronically for deposit, notice is given to the depositor by their bank—typically a bank that has no relationship with, and therefore does not notify, the intended payee.
Banks process millions of mobile deposits daily, and their systems are designed for efficiency, not for verifying the identity of the rightful payee. While some deposits are flagged, many are not—and that gap in oversight is exactly what embezzlers count on.
What Banks Actually Check
A look at what banks do verify during mobile deposit processing—based on standard U.S. banking practices and Federal Reserve guidelines—reveals the core of the problem. The standard automated verification process typically includes:
Image quality, ensuring the check is legible and complete
Duplicate deposits, checking whether the same check has been deposited before
Alterations or tampering, flagging inconsistent handwriting, digital edits, or missing information
Routing, account, and check number verification, confirming the check is tied to a valid U.S. bank
Endorsement verification, ensuring the back of the check appears signed or marked for deposit
Clearing with the issuing bank, confirming the check is valid and that funds are available
Notice what’s missing?
No step verifies that the person depositing the check is the rightful payee.
That omission is the open-door embezzlers walk through—again and again.
A Real-World Case: The Office Manager and the Frozen Account
Consider one of Prosperident’s recent cases.
A dentist reached out to us while she was on vacation after receiving an unexpected message from her office manager. The manager texted to confess that her personal bank account had been frozen because she had been depositing checks intended for the practice.
Initially, the manager claimed this had only been happening for seven months. When questioned further, she revised her story, stating it had actually been going on for a couple of years and totaled roughly $70,000 in stolen funds.
Prosperident’s investigation revealed the reality was far worse. She had deposited insurance checks totaling more than $250,000 over the course of five years—all into her personal bank account.
What is particularly noteworthy is how the office manager was able to repeatedly deposit checks payable to the practice into her own account without any interference whatsoever from her bank.
Why Didn’t the Bank Catch It Sooner?
From the bank’s perspective, the deposits appeared legitimate:
The checks were institutional checks from large insurance companies and presented little risk of default
The images passed automated screening
No duplicate deposits were detected
Without a system designed to match the payee’s name to the account holder, the discrepancy went unnoticed for years.
In essence, the bank verified that the check was real—not that the person depositing it was entitled to the funds.
Lessons for Practice Owners
This case—and many others like it—serves as a powerful reminder: technology reduces friction, and in doing so, facilitates fraud.
As a practice owner, you should:
Reconcile deposits against practice management reports that you personally print and review monthly.
Control incoming funds. Route incoming mail to a post office box under your control so staff do not have access. Ensure you are the first person to see incoming checks.
Ask questions and insist on supporting documentation when transactions do not line up.
Remember: trust is not an internal control.
The Expert’s Final Thoughts
Mobile banking has revolutionized convenience—but it has also created new opportunities for fraud.
Banks are not your last line of defense.
You are.
The belief that “the bank will catch it” is one of the costliest fallacies in dentistry.
The truth?
They often don’t.
And for embezzlers, that’s exactly the kind of bet they’re willing to take.
