Tag: Embezzlement

$20 Million Shopping Spree on the Company Tab

December 25th, 2009 — 4:46pm

You might have headphones or compact-disc recordings from Koss – a company based in Wisconsin. They just found out that their VP of Finance, allegedly spent a huge amount (current estimates say $20 million+) from the company account on shopping: furs, clothing, jewelry, home decor and more.

The estimated amount of $20 million is about 100 times,  Sujata Sachdeva’s 2008 compensation which was around $200K.

Just unraveling this thing will be a huge mess. It will be a beast to tangle not to mention that if this went on for some years (news reports are estimating it was 4 years in the making) then other small primarily family owned companies that are thinly traded like Koss might have similar issues that have yet to surface.

Koss would certainly appear to be an exception with such a huge amount but it says something about financial controls at other firms. Perhaps a hundred baby Enrons in the making.

Its not fair to say that business ethics training would have averted such a financial disaster – but along with tighter controls – such embezzlement might have been corrected earlier and at lower cost.

With such a high unemployment rate you don’t want companies laying honest employees off and shutting its doors because of the actions of one executive. But that’s what one executive can do if given the reins in such an unchecked way as we seem to have in this case.

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