Tuesday, December 23, 2008

California Electronics Executive Arrested In $65 Million Supplier Kickback Scheme

Ausaf Umar Siddiqui, aka "Omar Siddiqui," 42, of Palo Alto, California and the vice president of merchandising and operations for Fry's Electronics, Inc., was arrested Friday and held on $300,000 bond for an alleged $65.6 million kickback scheme arranged with some of the company's suppliers. The IRS filed a criminal complaint alleging a scheme in which Siddiqui set up a sham company and made side deals to receive kickbacks - "commissions" of up to 31 percent - in exchange for keeping those suppliers' goods on the shelves. Prosecutors are considering adding wire fraud charges to the complaint. The scheme lasted from January 2005 to November 2008, according to the complaint. $17.9 million of the kickback revenue was paid directly to Las Vegas Sands Corp., which operates the Venetian Resort Hotel Casino, which Siddiqui frequented, according to prosecutors. Siddiqui reportedly lived extravagantly and had a major gambling habit. Some of the suppliers named by the IRS as possibly involved in the case include, Phoebe Micro Inc., Lead Data International, U.S. Media Technologies, and Elite Group Computer Systems.

Read the story here and here.

No comments: