Monday, December 29, 2008

Fry's VP Allegedly Embezzles $65M

Ausaf Umar Siddiqui, vice president of merchandising and operations at Fry's Electronics Inc., was arrested last week on charges he embezzled more than $65 million to fund a "lavish lifestyle and pay of gambling debits."

According to Business Week, Siddiqui who oversees merchandise acquisitions for Fry's is accused by the IRS of creating an incredibly profitable scheme. He cut side deals with some of Fry's suppliers, buying their goods at higher prices than they would normally get, and buying more of them than he normally would, in exchange for kickbacks of up to 31 percent of the total sales price.

The IRS claims Siddiqui started striking side deals with some of the suppliers, in which he would guarantee he'd keep their products stocked on Fry's shelves, in exchange for kickbacks in the form of steep commissions paid to a company he set up called PC International.

According to the Mercury News Siddiqui used the funds to live a lavish lifestyle which included fast cars and high dollar styakes. Siddiqui was a regular in Vegas often times tapping into the casinos' private credit lines for millions of dollars. The former executive earned $225,000 a year with an additional undisclosed compensation as an "equity holder" in a company, however it is reported he has spent more than $120 million in just three years at the MGM Grand and the Venetian on the Vegas Strip.

Siddiqui is being held on a $300,000 bond and is due in San Jose federal court next month to be formally charged with wire fraud and money laundering.

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