Sujata Sachdeva – Koss former Executive Charged in $31 Million Fraud – Mental Illness Likely Defense

United States Attorney James L. Santelle announced that a grand jury sitting in Milwaukee returned a six-count indictment charging Sujata Sachdeva (46) of Mequon, who is also known as Sue Sachdeva, with six counts of wire fraud.  Ms. Sachdeva is the former Vice President of Finance, Secretary, and Principal Accounting Officer for Koss Corporation, a publicly traded company located in Milwaukee, Wisconsin.

The indictment alleges that Sachdeva used her position at Koss to fraudulently obtain more than $31 million from Koss, which she used to purchase personal items and pay for personal expenses.  According to the indictment, Sachdeva authorized numerous wire transfers of funds from bank accounts maintained by Koss to pay for her American Express credit card bills.  In addition, Sachdeva used money from Koss’s bank accounts to fund numerous cashier’s checks, which she also used to pay her personal expenses.  Sachdeva used the money she fraudulently obtained from Koss 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.

According to the indictment, Sachdeva sought to conceal her fraud by directing other Koss employees to make numerous fraudulent entries in Koss’s books and records to make it appear that Sachdeva’s fraudulent transfers were legitimate business transactions.  Sachdeva directed Koss employees to conceal her fraudulent transfers as well as the fraudulent entries in Koss’s books and records from Koss’s management and auditors.

According to United States Attorney James L. Santelle “this case is one of the largest embezzlement cases ever brought in this district, and demonstrates the ongoing commitment of this office and the FBI to investigate and prosecute white collar offenses”.
Each count of the indictment carries a maximum possible penalty of up to 20 years in prison and a fine of up to $250,000.  Sachdeva, therefore, faces a total maximum penalty of up to 120 years in prison and fines of up to $1.5 million, plus forfeiture of the items identified in the indictment and restitution.

WELL NOW WITH THAT ALL SAID…WHY?

According to her attorney, Michael F. Hart, Esq., principal in the law firm of Kohler & Hart, LLP, and a prominent criminal defense attorney in Milwaukee, one defense planned for Sachdeva is mental health. Hart is quoted as saying, “We intend to show that mental health issues played a substantial role in Ms. Sachdeva’s conduct.”

What kind of mental health issue(s) would he be referring to?  My guess…Compulsive Shopping Addiction or Spending Addiction.  The following is a reprint from a popular web site on the subject (the full article is here).

Most of us who suffer from compulsive shopping addiction (sometimes called spending addiction) are unaware of the problem. After all, everything around us seems to be saying, “Buy, buy, buy!” So…we do! We usually discover the problem only when we run out of money. Then, sadly, we think it’s an income problem. The problem isn’t income…it’s being out of control with the outgo. We addicts tend to spend money to compensate for areas in our lives where we are emotionally out of control or damaged. I’m sure the millionaire’s wife felt neglected for all the years he was pursuing his business goals while she was left with their several children to manage. The problem is triggered by emotion and shows itself as spending but we have to understand the cause of compulsive shopping addiction in order to get a handle on the solution.

Compulsive Shopping Cause

Since most people believe the problem is income, they mis-identify the cause as something outside of themselves; their job, boss, spouse, taxes, the creditors, prices, etc. This form of denial effectively blocks any kind of solution, locking us into an ever deepening problem. Though spending is usually the main symptom, and this, triggered by emotion, the cause goes much deeper. When we continue to pile up spending, the cause is usually rooted in the Spending Cycle: 1. We start with an emptiness, or negative self-esteem; a feeling of incompleteness. 2. Signals all around us tell us if we had some thing, we’d be seen as more important, successful, loveable, or complete, etc. The signals come from family, friends, co-workers, TV, radio, the Internet…anyone who has influence over us. 3. We spend to get that success feeling, sharing news of our shrewd acquisition with anyone who will say, “oooooooo.” 4. When the bills come in we feel even more incomplete and powerless than before, starting the cycle all over again. Until we own the cause as something within us, we will never have a solution. The actual cause of compulsive shopping addiction, then, is that feeling of emptiness and low self-esteem. Solving this incompleteness is key to finding the solution to compulsive shopping addiction.

Now, assuming this is a route the defense is taking, will it be successful?  Only time will tell, but it would appear from a distance look at the facts, it would be hard to argue that she was ‘mentally’ screwed up somehow considering the lifestyle and theft that supported it.  She was educated, so there had to be something other than – oops I didn’t know it was wrong as a defense.  The interesting side of this – is whether there is legal support to find her not guilty by reason of mental insanity?

Now, I’m not a lawyer (I’m a business ethics speaker)…so I would welcome those who are to share their opinions regarding using Compulsive Spending Addiction as a defense.

YOUR COMMENTS ARE WELCOME!

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4 Responses to Sujata Sachdeva – Koss former Executive Charged in $31 Million Fraud – Mental Illness Likely Defense

  1. I am Board Certified as a Professional Counselor (BCPC) by the APA. The problem is with the use of the insanity defense altogether, not with this particular case. The insanity defense says “I am not responsible for my actions.” This assumes that someone who is not entirely responsible for his or her actions should not be punished for those actions, nor assigned responsibility for them.

    While, in some cases, such as severe disorders where someone in completely out of touch with reality, this makes sense. In the case of this individual and many others who have tried to use the “insanity” defense by coming up with, shall we say, very creative diagnoses, this is simply garbage.

    She should be tried and, if found guilty, convicted and sentenced.

  2. […] Sujata Sachdeva – Koss former Executive Charged in $31 Million … […]

  3. Jordan Fernandez says:

    $31M theft allegedly perpetrated by a financial executive of a publicly traded company — those are the facts. In my opinion no excuse is possible to mitigate this perpetrator’s punishment. In this era of Wall Street misbehavior that nearly triggered a world-wide depression and the Enron, et all, Bernie Madoff and similar blatant rip-offs there should be no mercy shown those who volunteer to assume the responsibility to safe-guard the public trust and funds and then fail to do so due to their engaging in self-serving behavior.

    I have no patience or will to use my understanding of why an individual may have stolen from those depending upon their ethical performance of their duties. I fully understand compulsions to steal and cheat and the emotional back stories that prompt such egregious acts — I am recovering from those issues I engaged in during my youth. I could easily have chosen a profession where my job allowed me to hide my behavior as Sujata Sachdeva apparently did. But I chose not to do that and made other choices over the years before I recovered from the need to engage is such behavior that insulated those who depended upon my honesty and ethical actions from the brunt of my irrational illegal leanings.

    Since she did make that choice I believe she has also chosen the legal consequences not to be filtered by a finding of fact of the mental “insanity” of her actions. Since she failed to take measures to consider protecting others from her actions, the public has the right to also call for the full force and effect of the letter of the law in assessing punishment. My only hesitation in this is that putting such an individual in prison presumably for the remainder of her life causes the taxpayers of her state to suffer further. I hope one day that non-violent criminals can be placed on electronic monitoring and required to work in the public sector to pay restitution and maintain their pre-criminal contributions to the taxpayer rolls and social security, etc. by working in industries where they are removed from the temptations to which they were convicted of succumbing to which for many is a more severe punishment than the isolation of prison might ever be.

  4. anonymus says:

    I’m sure the millionaire’s wife felt neglected for all the years he was pursuing his business goals while she was left with their several children to manage

    I just want to say I have known her husband for 13 years. I have lived in their house for 5 years as a nanny. I moved out of country years ago and came to know this today and the first thing that came to my mind was her poor humble husband. No one has said anything nice about him on any article. this woman always neglected him. He would always talk so sweetly to ber and she would snap back. treated him like dirt. he would ways look for her but she would never be home. always requesting her to spend time with him. and even then i felt so bad for him. she would lie to him about everything. she didnt deserve him in tje first place. her shopping was an issue when she was growing up . she would buy stuff and hide it in her room from her parents. she used to tell me this. I used to watch her do crazy stuff. She would never spend time with her kids. I feel sorry for her. But she is the one who was always running after fame and materialistic things, she neglected her kids. she wasnt in good terms with any of her family members. I know a lot. so please dont say anything bad about her husband. he is a wonderful soul who had always put up with her just for the sake of their kids.

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