IRS: Fry's exec stole $65M to pay gambling debts

[Liberal_in_LA]

IRS: Fry's exec stole $65M to pay gambling debts

http://www.latimes.com/business/la-fi-frys24-2008dec24,0,7762946.story

Associated Press
7:48 AM PST, December 23, 2008


SAN FRANCISCO -- A Ferrari-driving vice president of Fry's Electronics Inc. who was allegedly such a heavyweight gambler that casinos chartered private planes to fly him to Las Vegas has been arrested on charges he embezzled more than $65 million from the retailer to fuel his lavish lifestyle and pay off debts.

Ausaf Umar Siddiqui is accused by the IRS of concocting an incredibly profitable scheme in which 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% of the total sales price.

The IRS alleges in a criminal complaint filed against Siddiqui that he set up a shell company that hid $65.6 million in kickback payments from five Fry's vendors from January 2005 to November 2008. Of that amount, $17.9 million was paid to subsidiaries of Las Vegas Sands Corp., which operates the Venetian Casino Resort, according to the criminal complaint and regulatory filings. Authorities confirmed the payments went to the casino.

Siddiqui, who lives in Palo Alto, was ordered held on $300,000 bond Monday at a hearing in U.S. District Court in San Jose. He has been in custody since Friday, when agents arrested him at Fry's headquarters in San Jose in front of stunned co-workers.

[McCamy Taylor]

1. You been in a Fry's? I'll bet they still turned a profit. Those places are gold mines.

[proud patriot]

2. I love Fry's ,, what a drag

[McCamy Taylor]

5. Me, too. But it is not likely to drive them out of business. Maybe he is responsible

for all those weird movies they had in the discount bins. Or the miles of magazines that no one seemed to buy. Or the miles of stuff you had to walk through at the check out...

Hey, Fry's should have a contest. "Name the junk the embezzler bought that no one wanted at a marked up price!" Winner gets....a shopping spree at Fry's.

:bounce:

[McCamy Taylor]

3. But since the money all went to casinoes, they are even bigger gold mines.

[sarcasmo]

4. Another one bites the dust, another greedy bastard, another one gone, another one bites the dust.

[SoCalNative]

6. I've never had a good experience there

the salespeople are worse than car salesmen the way they swoop down on you, and you have to be very careful with the merchandise you select. They're known for boxing up returned items (some even defective) and putting them back on the shelves as new.

[Liberal_in_LA]

7. Oh yeah... the one near the Burbank airport?

[SoCalNative]

8. That one

also the one in Woodland Hills or Canoga Park (can't rem what city it's in)

[Liberal_in_LA]

9. I love the space ship attack theme!

[McCamy Taylor]

10. I've never had a bad experience, but then I went to school at Rice U. in Houston

home of Geeks in the far south. Most of my friends from college could live in a Fry's.

[aquart]

12. What kind of store is Fry's?

[Javaman]

14. It's the Mecca of all things electronic. I drool at the thought.

Luckily I live about a 1/2 mile from one.

[aquart]

16. Oooooh. I want one.

[Liberal_in_LA]

15. a cross between Circuit City & Radio shack. TVs/computers but the parts also...

circuit boards, batteries, cords, all the little pieces/repair parts of electronics.

[aquart]

17. So this is the place ET needed when he was trying to phone home?

[Liberal_in_LA]

18. yes! and the place is big, like a home depot for electronics

[Javaman]

19. Yes, it is like CC and RS but only if both of those were on speed. :) nt

[pitohui]

11. what a dumb ass

if you're going to lose that much cash why in a second tier place like the venetian anyway? it gives new meaning to the word loser!

[Javaman]

13. Isn't this roughly how crazy eddies went down? nt