Executive Roadmap to Fraud Prevention and Internal Control

Creating a Culture of Compliance

Wiley, 2006

15 min read

10 take-aways

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What's inside?

Comply with Sarbanes-Oxley and improve your bottom line by fighting fraud with robust internal controls.

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Editorial Rating

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Recommendation

"A thing worth having is a thing worth cheating for," said W.C. Fields, though the executive fraudsters from Enron, Adelphia and WorldCom who are now languishing in prison might disagree. Two others who disagree are former federal agents Martin Biegelman and Joel Bartow. Now fraud investigators at U.S. companies, the authors have pooled their considerable knowledge in this comprehensive overview of what fraud is, how it occurs and how to prevent it. The book briefly describes everything a busy executive needs to know about antifraud programs. Actually, they provide everything and more, which is the rub. The book is repetitious and disorganized, bogs down in irrelevant legislative history, contains a spotty index and reads like a series of verbose PowerPoint slides. getAbstract recommends this book to those who can look beyond ponderous presentation and need a single-volume overview on stopping the many ruses to which any company is vulnerable. Fraudsters take note: Your days are numbered if CEOs and CFOs take this book to heart.

Summary

An Inside Job

Walt Pavlo began working at MCI Telecommunications, Inc., in 1991. Within three years, he was a senior credit and collections manager responsible for $1 billion in accounts. He handled major customers, including long-distance resellers AT&T and Sprint. Then, in 1995, the reseller market went soft. Pavlo's customers stopped paying. Under pressure to perform and feeling wronged by deadbeat customers, Pavlo had an idea.

Unbeknownst to MCI, Pavlo had an accomplice approach MCI's delinquent customers posing as an angel investor who wanted to buy their companies. As part of the deal, the accomplice offered to pay off their MCI debt - in exchange, of course, for a "reasonable" fee. Many customers gave the accomplice money, though their debts to MCI never were paid. Rather, Pavlo - the inside man at MCI - did a little creative bookkeeping and "disappeared" the debt. Pavlo's supervisors, unaware of what was really going on, were thrilled: It looked like he was meeting his targets, so they figured he must have been doing something right. Meanwhile, the customers' debt repayment fees were going into a Cayman Islands bank account. Within six months, Pavlo and...

About the Authors

Martin T. Biegelman is Director of Financial Integrity at a major international company and was a U.S. Postal Inspector. Joel T. Bartow is Director of Fraud Prevention at a private firm and was a special agent for the U.S. Federal Bureau of Investigation.

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M. K. 2 years ago

what a wonderful presentation, very ponderous.
F. H. 5 years ago

ok
P. T. 6 years ago

This is a good a read and I especially liked how the case was analyzed

Martin T. Biegelman and Joel T. Bartow