A top executive of Milwaukee-based Koss Corp., makers of headphones, CD players, and other electronics, was fired after she allegedly embezzled up to $20 million, according to reports.
Koss said last week that it terminated Sujata Sachdeva, the company’s vice president of finance, after discovering that she had stolen company money. According to the Wall Street Journal, Sachdeva spent more than $4.5 million to purchase furs, clothing, jewelry, and other charges. According to a complaint filed by the U.S. Attorney’s Office in Wisconsin, the embezzlement began in early 2008.
Sachdeva has been Koss’s head finance chief since 1992.
The company, in a statement, said that “estimates indicate that the amount of unauthorized transactions since fiscal year 2006 through the present may exceed $20 million.”
According to the criminal complaint, Koss President Michael Koss was alerted of the possible embezzlement after American Express Co. noticed that Sachdeva’s credit card bills were paid using large wire transfers from Koss’s company bank accounts.
Koss found several American Express credit card statements in Sachdeva’s office, as well as a pile of unworn women’s luxury clothing with price tags still attached. After being confronted by FBI agents, Sachdeva admitted that she falsified documents and used company funds to pay for personal items.
As the company’s finance chief, she also signed Koss Corp.’s quarterly and annual financial statements.
If true, the $20 million stolen by Sachdeva would be detrimental to Koss’s business. The company brought in revenues of $38.2 million in fiscal year 2008, and reported a profit of $2 million.
Koss has launched an investigation over the matter, but has warned investors that its financial statements since 2006 cannot be accurately relied upon.