She was a pillar of the local civic scene that supported local charity events. Sujata Sachdeva is also a Cardinal Stritch University Trustee, local Big Brothers Big Sisters Board Member and a graduate of Marquette University Law School where she is an adjunct professor. She owns a home in the elite Mequon suburb of Milwaukee, Wisconsin with her husband, a prominent area medical doctor. The mid-40's executive earned more than $170,000 in 2009. This is not the profile of a bad employee or fraudster.
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Sachdeva was arrested by the FBI at her home on Monday afternoon. Sachdeva, vice president of Finance at Koss since 1992, embezzled more than $4.5 million from the stereo headphone icon according to the criminal complaint. Sachedeva is said to have used the money for clothing, jewelry and for purchases at a bridal store.
Many businesses, especially family run and small businesses are loath to consider the possibility of employee fraud. "We are one big happy family," "we all know each other" or "no one here would do anything like that" are common responses of business owners and managers when experts suggest that controls need to put into place to deter business fraud.
According to reports, Sachdeva incurred the charges to Koss within the October-to-November 2009 period. Millions of dollars in charges raised a red flag at American Express who alerted the authorities.
Normally, employee fraud is more subtle. Embezzlement and other types of employee fraud are not likely to be detected as quickly or at all unless appropriate safeguards are in place. While visiting my hometown last month, I learned that the accounting manager at the local pet clinic embezzled $800,000 over a 15-year period—on average that is more than $50,000 a year. That amount is an astronomical theft for a small business and more so in a troubled economy.
Not all employee fraud involves the direct embezzlement of money. Employee fraud often involves stolen inventory, supplies, services and information. Employees steal items from work that they can use at home, for gifts or be sold for cash. Some employees even consider petty thievery as perquisites of their job. Many turn to fraud when they feel they are mistreated or undercompensated at work. There are many reasons why employees commit fraud on their employers. None are justified.
Sometimes employee fraud indirectly affects customers, for example, when identity theft or abuse of consumer financial information is involved. Identity theft and misuse of customer information by employees heightens the negative effects on the employer. The business will lose customers whose information was misused by the employee. Also, it is likely that harmed customers will sue the employer for negligent privacy and security practices. The negative publicity alone can traumatize a business. The NASDAQ halted trading of Koss shares on the negative news.
It's not clear what the apparently financially secure Sujata Sachdeva's motives were behind embezzling $4.5 million. Maybe just greed. The story behind Koss' Sachdeva misdeed will unfold over the coming weeks.
Regardless, business ethics, privacy, information security and fraud prevention should be on every businesses New Year to-do list.
Comments
how do you know if the credit card was not stolen by a hacker or someone
to view a partial list of crimes committed by FBI agents over 1500 pages long see
forums.signonsandiego.com/showthread.php?t=59139
to view a partial list of FBI agents arrested for pedophilia see
dallasnews.com/forums/viewtopic.php?t=3574
This is not a case of stolen credit card. The high-priced merchandise has been recovered from her house and office
Internal investigations show that the fraud might be more than $20 million since 2006. So it's not just fraud with American Express. She just happened to get caught by them when she paid huge amounts of her personal bill from a Koss account. She's in serious trouble.
$20 Million stolen? No problem. Pillar of the civic/charity scene? That helps. Will the charges against her will lead to conviction? Almost definitely. Sentence? Anywhere from "no time at all" to (maybe) 2 years...in a country club-type prison.
A guy steals $$ to pay for food or shelter for his family? 5 years of hard time.
Welcome to American justice. What a joke. She knows she is in NO trouble at all. Hey, she can write a book when this little blip in her life is over and make more $$. What a shameful society.
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