Monday, December 22, 2008

Fry's Exec Arrested in Alleged $65 Million Fraud Scheme

Lisa Fernandez writes in The Mercury News:

A one-time computer salesman who rose through the ranks to help build Fry's Electronics into a robust retailer is facing allegations that he defrauded the San Jose-based company out of $65 million, much of which he used to pay off enormous gambling debts in Las Vegas.

Ausaf Umar Siddiqui, 42,who goes by "Omar" and has been Fry's vice president of merchandising and operations, appeared in federal court Monday, where prosecutors filed a complaint alleging he masterminded a "secret kickback scheme to defraud Fry's Electronics of millions of dollars.''

Fry's executives didn't know about the illegal kickbacks, the federal complaint states. After 10 years with the company, he was fired Monday.

Siddiqui was known around the office for driving fast cars, carrying wads of $100 bills in his pocket and boisterously rooting on sports events from the four TV screens in his office. He spent $162 million in three years at just two of his favorites, the MGM Grand Casino and Las Vegas Sands Casino, according to his bank statements detailed in the complaint written by IRS Agent Andres Gonzalez.

The alleged scheme occurred from 2005 until mid-October when a Fry's high-level employee walked into Siddiqui's office at 600 E. Brokaw Road and saw confidential spreadsheets, letters and extraordinarily high commission amounts on Siddiqui's desk.

Siddiqui is expected to be formally charged in U.S. District Court on Jan. 15, on counts of money-laundering and wire fraud.

More here.



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