There is embezzlement and then there is EMBEZZLEMENT. This is a post about the latter.

Sujata Sachdeva, the former VP Finance and Principal Accounting Officer for Koss Corporation, a publicly traded company located in Milwaukee, Wisconsin, is alleged to have engaged in a one-woman embezzlement scheme that is so big that the company now must restate financial statements going back to 2004. So inconceivably big that Sachdeva's attorneys are now saying they may have her plead insanity to the six-count indictment brought yesterday by the DOJ charging her with wire fraud. So ridiculously big that it has led to a securities class action.

How big? According to the DOJ, Sachdeva used her position at Koss to embezzle more than $31 million. She used this stolen money to purchase personal items

including women’s clothing, furs, purses, shoes, jewelry, automobiles, china, statues, and other household furnishings. Sachdeva also used the money to pay for hotels, airline tickets, and other travel expenses for herself and others, to pay for renovations and improvements to her home, and to compensate individuals providing personal services to her and her family.

Reuters reports that one of the red flags that led to Sachdev's arrest occurred when American Express noticed that several large wire transfers originating from a Koss bank account were used to pay down her AmEx bills--which totaled more than $4.5 million between January 1, 2008 and December 19, 2009.

Her purchases included nearly $1.4 million at Valentina Boutique, a high-end shop in Mequon, Wisconin; $670,000 at women's clothing store Au Courant in Milwaukee; $649,000 from Zita Bridal Salon in Whitefish Bay, Wisconsin; and $255,000 in purchases from Karat 22 Jewelers in Houston, Texas.

According to yesterday's indictment, Sachdeva sought to conceal her fraud by directing other Koss employees to make fraudulent entries in Koss’ books and records to make it appear that Sachdeva’s fraudulent transfers were legitimate transactions. Sachdeva also allegedly directed Koss employees to conceal her fraudulent transfers as well as the fraudulent entries in Koss’ books and records from Koss’ management and auditors. The DOJ seeks the forfeiture of all of the property alleged to have been purchased with the proceeds of Sachdeva’s fraud should she be convicted in this matter, including her home in Mequon, Wisconsin.

If convicted, Sachdeva faces a total maximum penalty of up to 120 years in prison and fines of up to $1.5 million, plus the forfeiture.