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SEC Suspends Former Koss Finance VP from Practice

March 8, 2011

The Securities and Exchange Commission issued an order on Tuesday suspending the former vice president of finance at headphone maker Koss Corp. from appearing or practicing as an accountant before the commission.

Sachdeva had been the principal accounting officer at the Milwaukee-based audio company until she was fired in late 2009 for embezzling about $34 million (see Headphone Maker Hears the Sound of Accounting Fraud). Sachdeva allegedly spent approximately $4.5 million of Koss’s money on shopping sprees around Milwaukee buying up jewelry, fur coats, and fashions. Koss only learned of the embezzlement after American Express informed the company of several expensive wire transfers that Sachdeva made from the company’s bank account to her personal Amex account. When it checked her office, it found some of the items still in their shopping bags with the expensive price tags attached.

Sachdeva pleaded guilty last July to six counts of wire fraud. In November, she was sentenced to 11 years in prison, followed by three years of supervised release. She was also ordered to pay $34 million in restitution.

According to the SEC, Sachdeva consented to the issuance of the order suspending her from appearing or practicing before the commission without admitting or denying the findings, except that she admitted her guilty plea, and that the criminal judgment and conviction were entered against her. Maybe somebody at the SEC or her former employer could put her jewelry and fur coats to some use while she’s serving her term.

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