Koss fraud. Wow, not good.

[Dreadhead]

I'd be very surprised if the insanity defense succeeds but who knows. Maybe greed is a "syndrome". That would make a lot of Wall St. a looney bin which sort of fits.

[Torpedo]

I don't know if she really suffers a mental illness, I expressed my concerns about it before, but looks like that's her best bet for defense argument.

[ivanrocks321]

Well look at the bright side, after she is gone there wont be a leach at koss. Then they can use the money saved from theft to do some R and D... hopefully.

[Knuckledragger]

Well look at the bright side, after she is gone there wont be a leach at koss. Then they can use the money saved from theft to do some R and D... hopefully.

The message you have entered is too short. Even the Thin White Duke thinks so.

[The Monkey]

Well look at the bright side, after she is gone there wont be a leach at koss. Then they can use the money saved from theft to do some R and D... hopefully.

Yeah, bankruptcy is great for the R&D department.

[boomana]

My god, David Bowie looks like an evil old lady there!

[Dreadhead]

Well it looks like at least one investment company thinks Koss is a good investment

Search Results

ROYCE & ASSOCIATES bought about 11% of the common stock on Feb 3/4.

[The Monkey]

I think it's the other way around, isn't it? See here: New York firm dumps Koss stock - The Business Journal of Milwaukee:

If you look at the filings, they show that Royce owned ~700k shares on or about 2/3 and then Royce was down to ~70k on or about 2/4, so it looks like some serious trimming. That said, someone out there was buying it.

[Hopstretch]

Koss goes after AmEx. If the facts are as alleged in the complaint, AmEx looks pretty bad here.

Koss sues American Express over Sachdeva purchases

Edited February 23, 2010 by Hopstretch

[Dreadhead]

Koss goes after AmEx. If the facts are as alleged in the complaint, AmEx looks pretty bad here.

Koss sues American Express over Sachdeva purchases

By the description of the facts (if true) they have one hell of a case. A woman with 200kk income with a black card

[n_maher]

Shocking, a credit card acting like a douchebag.

[Dreadhead]

Shocking, a credit card acting like a douchebag.

In the end Koss is kind of lucky it was Amex not Visa or Mastercard since everything is integrated within Amex and it is one large corporation. It makes you wonder if it's going to come out that their defense is going to be that most of their better clients have their bill paid directly by the corporation. I wouldn't be surprised that it may come out a few CEO's have an all expense paid ride...

[The Monkey]

Not to mention the civil suits filed against Koss by any non-family shareholders. And if I were Koss, I'd start thinking about potential claims against the various credit card companies whose risk/fraud departments didn't pick this up until just now.

Koss goes after AmEx. If the facts are as alleged in the complaint, AmEx looks pretty bad here.

Koss sues American Express over Sachdeva purchases

Shall I send my bill to Koss today?

[n_maher]

I wouldn't be surprised that it may come out a few CEO's have an all expense paid ride...

The key point here is whether the Amex card was corporate card issued to her by Koss or if it was her personal card and in no way directly associated with Koss. If it's the latter and Amex allowed it to be paid with Koss funds clearly being used for personal purchases than I think lawyers are going to have a field day fighting with it. Ultimately I think it's still Koss who dropped the ball but red flags should have been going up everywhere.

[The Monkey]

In the end Koss is kind of lucky it was Amex not Visa or Mastercard since everything is integrated within Amex and it is one large corporation. It makes you wonder if it's going to come out that their defense is going to be that most of their better clients have their bill paid directly by the corporation. I wouldn't be surprised that it may come out a few CEO's have an all expense paid ride...

^ Any one of those cc companies have any number of internal controls that should picks up this behavior up in a hearbeat. And they have extensive obligations under the various Anti-Money Laundering laws (and their ilk) to do something about it.

[Hopstretch]

Shall I send my bill to Koss today?

Don't forget to add pain and suffering for your balls.

[The Monkey]

Store clerk at 11:00am today: "Um, Mr. Koss, do you have another card you could use? Amex appears to have a block on any charges over $3.00 on this card."

[The Monkey]

Don't forget to add pain and suffering for your balls.

Ha! The great irony of it all is that I jumped in that cab right in front of the Amex building. Those fuckers!

[CarlSeibert]

From the newspaper story it sounds like she was using a personal credit card, although I'm not sure a reporter would be savvy enough to understand the significance of that detail.

If it was a company-paid card, there would be a very granular filter on what could and could not be done with the card. Charges would be declined if they didn't meet the specifications. Back in the day, before our credit rating became lower than snake poop, I got caught out one day when my super-high-day-limit company Visa card got declined when I tried to charter an airplane with it. It worked fine for helicopters, but an airplane was considered "travel and entertainment", which was the province of our other credit card. A quick note fixed it, but I was shocked at the granularity of control. On another day, I got a phone call from the credit card company asking if I was aware that companies of a certain sort that sometimes might be associated with money laundering. (yes, I was aware of that) When companies - and they all seem to - get stung by an executive with a credit card and a taste for the good life and cry innocence, it's BS. They deliberately set up the accounts to be abused.

On the other hand, if it was a personal card, I can see how the credit card companies would proceed cautiously. (frankly, if it was my card, I would hope they'd think twice before accusing me of something) There would have privacy concerns. One can assume those to be very real with a customer who obviously has the means to be litigious. And there's the moral hazard - they would be kicking away a lucrative customer.

[veloaudio]

The key point here is whether the Amex card was corporate card issued to her by Koss or if it was her personal card and in no way directly associated with Koss. If it's the latter and Amex allowed it to be paid with Koss funds clearly being used for personal purchases than I think lawyers are going to have a field day fighting with it. Ultimately I think it's still Koss who dropped the ball but red flags should have been going up everywhere.

I read the article as she filled out the card application through Dun and Bradstreet and put down her $200k salary (or D&B had access to her salary). This sounds like a corporate card to me. I don't know for sure but I don't think D&B handles non-corporate cards.

[Hopstretch]

I don't think the main point is what flavor of card it was. It is that Amex (allegedly) repeatedly flagged, then subsequently reviewed and approved the transfers of funds from Koss corporate accounts to pay for items of an obviously personal nature on Sachdeva's account -- jewels, furs, shoes etc. (Bolding mine.)

Sachdeva started paying her personal American Express bills with Koss money in February 2008.

Between then and December 2009, she wire transferred $16 million from Koss to AmEx. In addition, Sachdeva sent $4 million in cashiers checks drawn on Koss accounts at Park Bank in Milwaukee to AmEx to pay her bills.

Pamela S. Hopkins, a vice president in the American Express fraud division in Glendale, Ariz., subsequently approved 50 bank wire transfers from Koss to pay Sachdeva's bills.

In other words, Amex's systems worked, but were overruled from within. It would be interesting to hear exactly how Sachdeva convinced the Amex personnel that her spree was corporate-sanctioned, but I suspect we never will.

[n_maher]

I agree Stretch, regardless of card the fact that Amex recognized and either consciously ignored or were convinced to ignore their fiduciary duty is the heart of the matter.

[Dreadhead]

I agree Stretch, regardless of card the fact that Amex recognized and either consciously ignored or were convinced to ignore their fiduciary duty is the heart of the matter.

I think they are screwed because to really do their job they should have contacted the company independently to her.

[n_maher]

For a bit of irony I figured I'd post this example of how financial institutions treat different levels of customers. I went to my bank at lunch and deposited a relatively sizable sum of cash, as in a wad of $100 bills. I just logged into my account to check on the status of a paypal xfer and saw that they had only credited my account with $1000 and that the remainder of the deposit was "under review". WTF is there to review about actual currency?!?

[Fing]

You're clearly a drug dealer.