Spring Break
Catch Me if You Can - Pavlo Style
Teresa Sheffield
Issue date: 3/10/08 Section: News
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As part of the Bloch Executive Series, Pavlo spoke in the Linda Hall Library about the $6 million money-laundering scandal that landed him in prison.
"I'm not here to teach any ethics," Pavlo said. "I'm here to say I'm sorry; this is what happened, it's not an excuse. … If I can help somebody avoid it, then it's all worth it."
Pavlo has been in Forbes Magazine, The New York Times, and on ABC News Nightline. He has also written a book entitled "Stolen Without a Gun," which chronicles his experiences.
Pavlo began working at the MCI phone company when he was 29 years old as a mid-level manager in the collections department. His job was to collect the bills from the hundreds of small companies that used the MCI service.
One of the problems Pavlo faced, he said, was that a lot of these companies were very dishonest about paying for service. There came to be hundreds of millions of dollars of debt, but MCI couldn't write it off all at once because it would make the company look unstable and lower its stocks and subsequently scare the companies that were interested in buying MCI.
"I cheated. There was no other way to do it," Pavlo said.
With the blessing of his bosses, Pavlo said he slowly wrote off the debt a little at a time and hid the rest of the debt by temporarily putting unapplied money from companies who paid their bills into the unpayable debt account.
Pavlo said he began to feel guilty of his and his company's actions and looked to a successful and rich man named Harold for a different job. Harold told him not to leave the company, but there was a way everyone could make some money.
With Harold's help, Pavlo picked seven companies that owed large debts to MCI and gave them all disconnect notices unless they paid their bills. Harold disguised himself as an investor and would offer to loan the financially unstable companies money.
In exchange for a loan, the companies had to give Harold (and Pavlo) shares in their companies, pay $10,000 every week until the loan was paid off and then let him pay off the debt directly to MCI.
But when the money from these companies started coming in, Pavlo had already written off the debt. He and Harold shared the profits. The pair did this for six months and stole $6 million dollars before Pavlo said he started feeling really guilty.
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