1. In January 2001, Walt Palvo received a 41-month prison sentence. What white-collars crime did he commit?
Walt Pavlo was a Senior Manager in Billing Collections at MCI/WorldCom and dealt with customer payments, credits, and reconciliations of accounts.
He committed financial statement fraud at MCI/WorldCom. In January 2001, he received a 41-month prison sentence for money laundering, wire fraud, and obstruction of justice.
2. How did Palvo manipulate the uncollectible debt to boost the company's assets and profits?
Palvo felt the pressure from upper level management at MCI/WorldCom to constantly achieve revenue growth in the company. As Pavlo watched his bosses manipulate the company's financial records, he soon began to manipulate them himself.
Pavlo and his supervisors met to devise ideas on how to cook the company's books. Financial records were manipulated by Pavlo, his superiors, and his colleagues in a widespread effort to fraudulently make the company look like it was meeting revenue growth projections, even though it wasn't.
Pavlo learned how to conceal uncollectible debt through entering unusual, fradulent journal entries, delaying write-offs, which boosted the company's assets and profits.
3. What were the factors that led Palvo to commit the crime?
There were three major factors that led Palvo to commit the crime.
i) Meeting analysts' expectations
Palvo was preoccupied with meeting analysts' expectations. This preoccupation can lead to the pressure to commit fraud. Pavlo felt extreme pressure from his superiors to meet revenue projections. Thus, he had to find different ways to manipulate the records so that it looked like MCI/WorldCom was living up to analys ...