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Speakers discuss analytics, white-collar crime at business homecoming event

When Walt Pavlo began as a 29-year-old manager at MCI, he could hardly have foreseen that his burgeoning career in the telecom business would land him in prison.

But, starting with seemingly small "creative accounting choices" Pavlo soon found himself on a path that led to millions in wire fraud and a nearly four-year stint in federal prison. Today, Pavlo travels to business schools nationwide speaking of the importance of business ethics.

Pavlo, the keynote speaker for the Muma College of Business homecoming speaker series on Oct.10, spoke to nearly 300 alumni – and a few graduate students - about his experiences and challenged the audience to examine their own professional ethics and put in place procedures that can deter crime. The event also included a panel discussion on business ethics and how analytics and creativity can be used to curb white-collar crime.

"Everybody's got a plan until they get punched in the mouth," Pavlo said. "How do I react when something bad happens? And what I'm going to tell you is how I reacted."

Pavlo was a manager at MCI at a time when the telecom business was booming. MCI - and the entire telecom business - was on the cusp of big change back then. After rising more than thirtyfold in 20 years, MCI's stock lost ground in 1994 and 1995. A year later, deregulation promised to up-end old monopolies and raze barriers to new competition.

A rising star, he was assigned to head a four-person group in the carrier's finance department in Atlanta, which handled about $240 million in monthly billings. The smell of fast money was in the air and expectations were high.

"At 32 years old, I was a millionaire, at least on paper," he said.

He soon began to struggle to meet his targets. A colleague showed him how he could cheat to make his goals, starting with seemingly small transgressions at first. Along with a member of his staff and a business associate outside of MCI, Pavlo began to perpetrate a fraud involving a few of MCI's customers. When the scheme was completed, seven customers were defrauded over a six-month period, resulting in $6 million in payments to the Cayman Islands.

"For three weeks of the month, I was working as hard as I could to collect money, and then for the last week, I was cooking the books," he said. "I knew immediately that what I was doing was wrong, but at the same time, I felt a huge sense of relief. I had solved the problem."

Despite the money Pavlo made in the scheme, he said his conscience weighed on him. "Life, as grand as it was for brief periods of time, with jets and boats and whatnot, it was miserable to sleep with myself," Pavlo said.

When his boss called him into his office to ask about some strange activity on an account, he knew he had been caught.

"Every time I tried to get myself out of trouble, I got myself in even more trouble," he said. "It was a very dark period of time."

Today, Pavlo admits that some people think he is still profiting from his crime because he speaks to business schools nationwide about his felonious past. He is also a columnist for Forbes, where he writes about white-collar crime. Pavlo says he is still paying restitution for his actions, financially, and these engagements give him a chance to repay his debt by warning others about the slippery slope of white-collar crime.

"I'm very fortunate and blessed to be able to do what I do," he said.

Following Pavlo's keynote was a panel discussing analytics and how business intelligence can prevent crime. Accompanying Pavlo on the panel were Steve Dayton, a senior vice president at Citi; Kerry Myers, a retired attorney and accountant for the Federal Bureau of Investigation who currently teaches forensic accounting at USF; and Lt. Brian Prescott, a law enforcement consultant on intelligence-led policing. The panel was moderated by Sandy Callahan, the chief financial officer for TECO Energy, Inc.

The panel discussed issues such as business ethics, balancing between high standards and crushing pressure, and ways that companies use data to drive decisions and streamline operations.

"Today, businesses have mountains of data that enable them to understand what is happening now and to make educated guesses about what might happen tomorrow – but this information is only useful when it can be understood," said Moez Limayem, dean of the Muma College of Business, in his introductory remarks for the event. "Excellence in creativity and business analytics is the distinctive identity that the Muma College of Business seeks to form over the next five years."

Click here to view photos from the event.