Guest Post by Keith Paul Bishop
Editor’s Note: This article was originally published on Keith Bishop’s blog, California Corporate & Securities Law on November 23, 2011. It offers us a different view from that of Tracy Coenen regarding the SEC’s action against Michael Koss and Koss Corp. for the embezzlement perpetrated by Sujata Sachdeva.
In this week’s issue of Compliance Week, Tammy Whitehouse writes about the SEC’s recent enforcement action against Koss Corporation and Michael J. Koss, its Chief Executive Officer and former Chief Financial Officer. Continue reading
Today’s Compliance Week article, “SEC Pursues Small Company Over Lax Internal Controls,” [subscription required] discusses the SEC settlement with Koss Corp over the $34 million embezzlement by former Vice President of Finance Sujata (Sue) Sachdeva.
The article explains the settlement, which is essentially a clawback of some of Michael Koss’s compensation: Continue reading
Yesterday, Sue Sachdeva was sentenced to 11 years in prison for her $34 million theft from her employer, Koss Corp. I predicted a little slap on the wrist of 5 to 7 years, so she got two little slaps instead.
The Washington Post is reporting that Judge Lynn Adelman gave her less than the 15 to 20 years requested by the prosecutor because of her “acceptance of responsibility and the genuineness of her remorse.” Continue reading
Yesterday the government’s sentencing memorandum in the criminal case against Sujata Sachdeva (the woman who stole more than $34 million from her employer, Koss Corp.) was released. It had a number of items of interest. Prior to sentencing, the prosecution and the defense each get to make their case for a higher or lower sentence.
The defense’s arguments were absurd. They argued that Sue Sachdeva should get a lighter sentence because:
a. she’s been a law-abiding citizen until now
b. the fraud was “simple”
c. and poor, poor Sue has a “compulsive shopping disorder” Continue reading
VIDEO: World of forensic accounting unveils how companies are cheated out of millions
The story of the alleged $31 million fraud at Koss Corp by the company’s former VP of Finance, Sue Sachdeva, hasn’t gotten much air time over the last month or so. Aside from the usual class action lawsuits when there is a fraud discovered at a public company, the only bits of news that are remotely notable at Koss are the continued declaration of dividends and the filing of a 10-Q without any financial statements included.
Koss is a public company, but the stock is thinly traded. The Koss family apparently owns about 70% of outstanding shares of stock. The declaration of a dividend, therefore, is nothing more than the Koss family publicly announcing that they are going to pay themselves. Continue reading
Today’s Milwaukee Journal Sentinel provides additional insights into the alleged fraud committed by Koss Corp. VP of Finance Sue Sachdeva. Initially the fraud was estimated at $4.5 million, but that was quickly revised upward to more than $20 million. It is alleged that Sachdeva spent millions in corporate funds on clothing, jewelry, and other items.
My comments in the article: Continue reading
This week Koss Corp (NASDAQ:KOSS) announced that Sujata “Sue” Sachdeva was fired from her position as Vice President of Finance for stealing at least $4.5 million from the company. Two members of the accounting staff Sachdeva supervised were suspended without pay.
And then the estimate of losses went up to $20 million. The theft occurred between 2006 and 2009, and the company has said that none of the financial statements for those years can be relied on. Continue reading