Yes. It's the whole article. Life is hard.
If you don't want to troll the entire thing :-), just search for Hilby,
below.
Whew.
It's looking like an ur-cypherpunk or two dodged a bullet, even if some of
them did end up getting ripped off themselves, from, you guessed it,
non-payment of invoices, plus the odd router or two...
Cheers,
RAH
--- begin forwarded text
Status: U
Date: Fri, 24 May 2002 23:06:37 -0400
To: Digital Bearer Settlement List [EMAIL PROTECTED]
From: R. A. Hettinga [EMAIL PROTECTED]
Subject: MCI: Money Crimes Incorporated?
Sender: [EMAIL PROTECTED]
See:
http://www.privacy.nb.ca/cryptography/archives/coderpunks/new/1999-01/0140.html
I remember hearing I can get you MCI OC3's *real* cheap... out of Hughes,
Hilby, and Co. at Simple Access, back in the day.
Now I know why.
Cheers,
RAH
http://www.forbes.com/forbes/2002/0610/064_print.html
Ring of Thieves
Neil Weinberg, 06.10.02
MCI introduced Walter Pavlo to a world of armed thugs, duffel bags stuffed
with cash and phony accounting. Now, sitting in a South Carolina prison, he
points a finger back at his former employer.
Walter Pavlo has plenty of time these days to walk the track inside South
Carolina's secluded Edgefield prison. He takes a daily stroll with Mark
Whitacre, the Archer Daniels Midland whistle-blower who is serving a
ten-and-a-half-year sentence for fraud. Surrounded by drug convicts, camp
fences and rolling woodlands, they chat about their pasts and draw
parallels to the scandals swirling around big corporations now--at Enron,
at Arthur Andersen, in telecom.
Pavlo, blond and still boyish at 39, committed his crimes at MCI as the
telecom business roared in the mid-1990s. He is in the 15th month of a
41-month sentence for obstruction of justice, money laundering and mail
fraud. An unremarkable rank-and-filer in a 25-person billing department, he
says he cooked the books, under pressure from higher-ups, to help bolster
MCI's growth. Pavlo employed an array of tricks--taught to him, he says, at
MCI--to hide hundreds of millions of dollars in aging bad debts and clearly
uncollectable receivables owed by a raft of upstart telecom resellers. In
the process, he used the same sleight of hand to skim $6 million on the sly
for himself and a couple of partners; for that he is doing soft time.
The resellers stoked growth at a time when MCI, lit up by the halo of the
Internet frenzy, was prettying itself up for a sale to someone bolder. The
company, with Walter Pavlo's copious assistance, granted easy credit to
dozens of fly-by-nights looking to lease its lines and resell service to
businesses and consumers. It blithely let just about anyone, from raw
rookies to pornographers and astrological touts, run up tens of millions of
dollars in bills. Then, Pavlo says, MCI kept the receivables on its books
long after any real hope of collecting had vanished--with the resellers
themselves, in some cases. Banks, eager for high interest and fees,
financed it all.
It was his job, he says, to hold these losses to a minimum, even if doing
so required deceptive means. His actions benefited MCI. The company filed a
proxy with the Securities Exchange Commission recommending a $20 billion
buyout by British Telecom in 1997, just days after management knew it had
fraud on its hands, according to a brief filed by a group of banks that
sued MCI in 1997. That deal collapsed, and MCI then accepted a $41 billion
offer from WorldCom months later.
MCI denied the banks' allegations and has claimed it was duped by its own
employees. At MCI only Pavlo and James B. Wilkie, a senior manager, have
been punished (along with a third partner, an outsider named Harold R. B.
Mann). For five years Pavlo has wondered when someone might take a hard
look at the four levels above him, from his boss up to the chief financial
officer--Douglas Maine, who later became chief financial officer at IBM and
now runs its online arm--and above him to MCI chief executive Bert C.
Roberts, who now is chairman of WorldCom.
And so when Pavlo learned one day in March, as he sat reading in the prison
library, that the SEC is investigating whether there were any accounting
misdeeds at WorldCom, he had one sentiment: It's about time. He believes
the remnants of his stunts are buried in a $685 million pretax charge for
bad receivables that WorldCom took in October 2000. The company blamed the
big charge ($405 million after tax benefits) on a handful of customers'
going bankrupt in the previous quarter. Pavlo argues that the charge was,
rather, a way to use the industry downturn to mask the writeoff of
receivables that had been rotting for years on the books of MCI and
WorldCom, artificially boosting profits.
This story is bigger than Walt Pavlo heisting money from MCI and going to
jail, says Walt Pavlo. This is about corruption of telecom, with lots of
games. I didn't come to MCI knowing how to hide accounts receivable.
Pavlo is a convicted felon and an accomplished liar. But
