Price of white collar crime

| 22/08/2008

(CNS): Author of Stolen Without a Gun Walter Pavlo who now lectures on corruption in the business world was convicted of embezzling $6 million from his employer, which he sent to the Cayman Islands. He was sentenced two years in prison and recently that said his decline into crime came from poor decision making.  “I started bending the rules and it became easier and easier,” he said.

"It seemed like I was getting away with it and it seemed like other people approved, so I lost my bearing. It doesn’t mean that everyone does it; it just means that I did.”

Appearing as the guest speaker at The Collins College of Business at the University of Tulsa’s annual business ethics seminar, Pavlo explained how easily it happened, according to the Journal Record. Pavlo said the speaking engagements allow him to share his experience in an upfront, candid matter.

“I think it’s important people know I was punished,” he said. “I think too often people think white-collar felons just get a slap on the wrist. I paid a significant price for what I did. It ruined me financially and it impacted my family and my children.”

In the mid-1990s, Pavlo was a senior manager at MCI, where he was responsible for the billing and collecting of nearly $1 billion in monthly revenue for the company’s career finance division.

Pavlo said during that time a large number of customers were not paying their bills, and he was finding a considerable amount of fraud. When a customer wasn’t paying, employees of MCI were supposed to report it, but Pavlo said they didn’t.

“We didn’t disclose anybody for a number of reasons, but the main thing is we didn’t think we were doing anything wrong, or it would last very long,” he said. “There is subjectivity that comes with pronouncing something as uncollectable and bad debt, we just chose not to do it, and after awhile it really did become a problem and we were hiding things.”

Pavlo said the events started to snowball once he became jaded and tainted by customers that he saw defrauding MCI and he wanted to find a way to strike back. Starting in March 1996, Pavlo, a member of his staff and a business associate outside of MCI began to commit fraud involving several MCI customers. Over a six-month period, seven MCI customers were defrauded, resulting in $6 million in payments to a bank in the Cayman Islands.

“So I was doing stuff for the company and doing something for me,” he said. “In the end I wasn’t a very good criminal. I was nervous and was very scared of getting caught, and knew this wouldn’t end well.”

Pavlo pleaded guilty in 2001 to wire fraud and money laundering and in prison he wrote a book as a personal confession. Since getting out he has turned his crime to profit with speaking engagements and promotion of his book. “There are a lot of things that happen in business and there are a lot of reasons why people cross the line,” he said, adding that people need to know why.

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