Friday, July 16, 2010

Update: Sachdeva Pleads Guilty In $31.5 Million Koss Embezzlement Case

Sujata "Sue" Sachdeva, 46, of Mequon, Wisconsin, pleaded guilty today to six counts of wire fraud in connection with her alleged embezzlement of a now estimated $31.5 million from publicly-traded and Milwaukee, Wisconsin-based Koss Corporation, where she had served as vice president of finance and secretary. In her plea agreement, Sachdeva agreed to make full restitution of about $34 million. According to the original indictment, Sachdeva authorized numerous wire transfers of funds from company bank accounts to pay for her American Express credit card bills and obtained cashier's checks to pay for personal expenses. Further, Sachdeva attempted conceal her fraud by directing other Koss employees to make numerous fraudulent entries in Koss’ books and records. The indictment alleges that her embezzlement scheme commenced in January 2004 and lasted nearly six years until December 2009. Koss has been subjected to shareholder lawsuits and financial restatements as a result of what is believed to be 2009's largest embezzlement case. When the case first broke in December 2009, the loss was believed to be about $4.5 million. However, the losses quickly climbed as the investigation proceeded. She was indicted in January 2010. Under the plea agreement, Sachdeva must forfeit her home and numerous personal items she had purchased with the ill-gotten monies, such as women’s clothing, furs, purses, shoes, jewelry, automobiles, china, statues and household furnishings. Sachdeva has two school age children, Shiva and Simran, and her husband is Dr. Ramesh C. Sujata, a pediatrician in the Milwaukee area.

Read the updated story here.

Read FraudTalk's earlier posts on this story here, here, here and here.
Update (9/16/10): Sachdeva apparently used a Koss Corp. building to warehouse some of the "loot" she purchased with embezzled funds from the company, according to recent filings with the federal court. Federal authorities released a list of items that have been siezed and will be auctioned as part of the restitution process. Among the items siezed include 2,395 pairs of luxury shoes, numerous pieces of jewelry, designer clothes, vases, statues and a 2007 Mercedes E350.
See the whole list here.

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