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Executive Roadmap to Fraud Prevention and Internal Control: Creating a Culture of Compliance, 2nd Edition by Joel T. Bartow, Martin T. Biegelman

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CHAPTER 8

Former Fraudster and New Man

EXECUTIVE SUMMARY
There is much to be learned when one hears from one who perpetrated a corporate fraud and paid the price with a prison term, personal and professional disgrace, but ultimately found redemption. Corporate fraudster Walt Pavlo, who “cooked the books” and in the process defrauded a company out of almost $6 million, believes that employees are basically good but get corrupted by the system. A mixture of temptation, greed, and opportunity turned him to the dark side, and he paid a heavy price. Fraud prevention and internal controls were almost nonexistent at Pavlo's former company, with many temporary employees and manual transactions. The tone at the top was “meet the numbers.”

CONVERSATION WITH WALT PAVLO

Much of what has been discussed in this book involves the criminal actions of corporate fraudsters. When the fraud is discovered, some deny any wrongdoing and, as is their legal and constitutional right, fight the government charges in court. Others take responsibility for their criminal acts, plead guilty, and face the consequences. The very act of admitting to oneself that the actions were wrong is but the first step in the redemption process.

Walt Pavlo is an example of such a person. He was a senior manager of credit and collections for telecom giant MCI in the mid-1990s before the company was bought by WorldCom. Pavlo directed the billing and collections process in their reseller division. His division was having a ...

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