Wire Fraud Detected in Wisconsin
The victim: Koss Corporation, Milwaukee, Wisconsin. The Perpetrator: Sujata “Sue” Sachdeva
On January 20, 2010, a grand jury in Milwaukee indicted Sujata “Sue” Sachdeva on six counts of wire fraud for allegedly embezzling $31.5 million from Koss Corporation, a phone manufacturer where she had been employed as Vice President of Finance, Principal Accounting Officer and Secretary.
It was originally believed that the embezzled amount was $4.5 million but results of an internal investigation showed that the amount was much larger
Sachdeva’s fraud scheme allegedly began in or about January 2004 and ended in December 2009 however, the internal investigation and her plea agreement revealed that her thefts actually began in 1997.
She was originally hired as a temp in 1989 and somehow became vice president of finance within a year.
Sachdeva used company funds to pay her American Express credit card bills (via wire transfer); according to the indictment, she authorized at least 206 wire transfers. She issued more than 500 cashier’s checks from company accounts to pay for personal expenses and then tried to hide tracks by instructing other Koss employees to make fraudulent entries in Koss’ records.
Only after American Express notified Koss about unusually large transactions to make payments on Sachdeva’s personal credit cards, was the fraud discovered.
What was the money used for? An extravagant lifestyle, a vacation home in Hawaii, a 2007 Mercedes Benz automobile and other automobiles, luxury travel and numerous personal luxury items, including luxury clothing, furs, designer shoes, jewelry and objects d’art. The indictment sought to seize those items as well as numerous other luxury items located in two storage units in Milwaukee and held for her at five local luxury stores.
She was a shopaholic without a doubt. She would spend millions at different stores and required that items be held for her–items that were never picked up. She also maintained a large household staff.
After the results of the internal investigation were turned over to the authorities, Sachdeva was arrested in December 2009. On November 17, 2010, she was sentenced to 11 years in prison.
It is apparent that no business, big or small is safe from the possibility of fraud. Safety procedures can be put in place, but as the vast majority of fraud cases in the United States are perpetrated by employees, it is a very difficult situation to control.
There is however; an aspect that you can control. Since most frauds are committed by employees holding accounting/bookkeeping positions, outsourcing your bookkeeping requirements is the logical choice.
Outsourcing your bookkeeping needs is an inexpensive alternative that will instantly increase your level of protection against fraud. Contact us! At Cash Flow Accounting our offer is simple: straightforward, safe and cost effective bookkeeping solutions for your small business. Please e-mail us at Info@CashFlowAccounting.com for more information.
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