Koss Corp. has sued American Express alleging that the credit card company knew that Koss money was being used to pay for shopping sprees by a Koss executive since 2008, but did nothing to stop the fraud.
Koss has said it lost $31 million since 2004 to embezzlement by its former vice president of finance, Sue Sachdeva.
Sachdeva has been indicted in federal court on six counts of wire fraud in connection with the allegations.
So forget the CEO and CFO of Koss, forget the company's accountants and auditors. $31 million goes missing because American Express didn't tell the company about what are now clearly unauthorized purchases. Because, you know, when Koss authorized payment of the American Express bills for clothing and furs, how could they have possibly known those purchases weren't for company business? Employees always wear furs when manufacturing/selling Koss speakers. It reduces static shocks or something. American Express, that's who should've known and put a stop to it. Yes. That's right. American Express. Time to file a lawsuit.
There. Problem solved, stockholders. Have faith in our company once again.
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Koss seems to be in a headlong race to win the gold medal for the most ineptly managed company in America.
ReplyDeleteIt's small enough that the guys who have their name on the door (and who inherited the business from their father) should have had their fingers all over the financials on the monthly basis.
This is a very public case, and I wonder how often embezzlement stays private because the business owners don't want to be embarrassed.