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HR Magazine, October 2003 - Cover Story: The Five-Finger Bonus - The Fraud Triangle at Work

By Robert J. Grossman  10/1/2003
 
HR Magazine, 
March 2001 Vol. 46, No. 3

Recently released from prison, with little opportunity to work in corporate America again, 40-year-old Walt Pavlo has plenty of time on his hands to ponder the missteps he took while employed at MCI and that earned him an 18-month stay at Club Fed.

It started innocently enough for Pavlo, whose record was once as pristine as a hospital operating room. “There was no way when I went to work at MCI that I could have thought of doing any criminal act,” he says. “There was no warning; all my employment records and reviews talk about how good I was.”

Working as a collection manager for high-risk accounts, Pavlo discovered that MCI executives, who were loading up on stock options, didn’t want anything to happen that would cause the stock price to drop. So, Pavlo says, when he brought them bad news, they didn’t want to hear it; Pavlo says he felt he was being told to fudge the numbers, which he did. (Pavlo’s former supervisor did not respond to repeated requests from HR Magazine for comment.)

“I was under a lot of pressure,” Pavlo recalls. “Thinking about doing something wrong, but wanting to be accepted by my bosses, a team member, part of the inner circle.”

But soon he began to stew, doubting he was getting his fair share for participating in the deception. “I began to resent it because I was the only one not getting rich,” he says.

He and a friend hatched a complicated scheme enabling him to pocket payments from the debtor accounts. “It didn’t take much—a couple of fifths of liquor and the idea just flowed out,” he recalls.

All three elements of the fraud triangle fell neatly into place. Pavlo had:

  • Motivation—the desire to support a more affluent lifestyle.

  • Opportunity—access to the books that he was already doctoring.

  • Rationale—resentment against his bosses, who he believed were pressuring him into cooking the books in the first place.

Before Pavlo and his partner were caught, they ripped off $6 million from MCI customers.

Today, Pavlo says he’s learned his lesson. “Confessing, reflecting on it in prison, coming out and being able to speak openly after hiding from my family and friends feels good,” he says. “I tell my kids, there’s a healing process; people make mistakes. Granted, this was a big one.”

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