Catch Me if You Can - Pavlo Style

Though Leonardo DiCaprio probably won't be playing him in a blockbuster movie anytime soon, Walter Pavlo, Jr. has an interesting story to tell.

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.

"How do I get myself back to the person I was?" he said.

Pavlo said he began to have problems with alcohol, sleeping pills and functioning both mentally and physically.

Pavlo was finally caught when his boss found that money had been moved around in the accounting books. He pleaded guilty to charges of money laundering and obstruction of justice, and was sentenced to 21 months in prison. He was also ordered to pay $5 million dollars in restitution.

"It's pretty much something that will live on forever," Pavlo said.

Pavlo lost his marriage of 15 years, and has had a hard time finding a job thanks to the scandal.

He thinks the media has glamorized white-collar crime.

"If you do bad things, you go to a country club-like prison, and two years later you resume your life," he said. "Not true, and it shouldn't be true and you shouldn't be told that's what happens. Broken homes, broken families, bankruptcy ruin, that's what happens."

tsheffield@unews.com