Corporate Greed Milwaukee Style

Corporate Greed Milwaukee Style,[link widoczny dla zalogowanych]
Milwaukee is a blue-collar industrial city. It is not known as a center of financial fraud. That changed with the arrest and conviction of Sujata Sachdeva,[link widoczny dla zalogowanych], former vice president of finance for Koss Corp. Koss is a manufacturer of stereo headphones headquartered in Milwaukee. While stories of insider fraud are nothing new,[link widoczny dla zalogowanych], the magnitude of the Sachdeva's theft makes this story a tale worth telling.
According to Koss' annual report,[link widoczny dla zalogowanych], the company had net sales last year of $41.7 million. Ms. Sachdeva was convicted of embezzling $34 million. In other words,[link widoczny dla zalogowanych], over a few short years,[link widoczny dla zalogowanych], Sachdeva stole almost as much money as the company made in a year.
Because Koss is a public company, its books and records are audited yearly. Notwithstanding the huge embezzlement,[link widoczny dla zalogowanych], no one seemed to know that tens of millions of dollars went missing. Not the CEO, not investors and not even the company's auditors,[link widoczny dla zalogowanych], Grant Thornton.
According to their website,[link widoczny dla zalogowanych], Grant Thornton is one of the largest accounting firms. They claim to understand "how important audited financial statements are to business,[link widoczny dla zalogowanych], shareholders/owners,[link widoczny dla zalogowanych], lenders, investors and other stakeholders." They also say,[link widoczny dla zalogowanych], "We consider it our job to keep our clients informed all year long of accounting,[link widoczny dla zalogowanych], financial and regulatory developments that may impact their business." Koss says that Grant Thornton failed in its mission and has filed suit against them.
If not by the auditors,[link widoczny dla zalogowanych], how did Sachdeva get caught? She was caught after a security officer at American Express noticed she was using company wire transfers to pay her staggering credit card bills.
The stolen money was spent primarily on shopping - clothes,[link widoczny dla zalogowanych], shoes and jewelry. According to federal prosecutors, she spent $1.4 million at one women's boutique alone.
Sachdeva was just sentenced to 11 years in a federal prison. With good time,[link widoczny dla zalogowanych], she will be eligible for release in about 9 years.
At sentencing,[link widoczny dla zalogowanych], her lawyers argued for leniency. According to published press reports,[link widoczny dla zalogowanych], one of her lawyers said she was driven to steal by a "compulsive shopping disorder." Apparently she had so much stuff that she needed to rent storage facilities because there was no room left in her house.
Because Koss is a public company,[link widoczny dla zalogowanych], many people were hurt by her actions. Thousands of shareholders,[link widoczny dla zalogowanych], some of them pension and retirement plans, saw their stock plummet by 50% in the wake of the embezzlement. Employees were denied profit sharing bonuses. A few corporate accounting people lost their jobs. And lawsuits will probably linger for years.
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