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Koss Corporation Files Suit Against Former Employee Sachdeva and Auditor Grant Thornton Over $30 Million Theft

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  Published in House and Home on Thursday, June 24th 2010 at 7:41 GMT by Market Wire
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CHICAGO--([ BUSINESS WIRE ])--Koss Corporation (NASDAQ:KOSS) filed a lawsuit today in the Circuit Court of Cook County, Illinois against the companya™s former Vice-President of Finance, Sujata Sachdeva, and Grant Thornton, LLP, its former auditor, alleging fraud and deceit, professional negligence and breach of fiduciary duty. The lawsuit stems from Kossa™ discovery in December of last year that Sachdeva had embezzled tens of millions of dollars from the company in order to fund a lavish lifestyle complete with furs, jewelry and high-end clothing.

"There is no question that Sachdeva stole from Koss and there is no question that without Grant Thorntona™s failures, the theft would have never occurred"

The Complaint alleges that Sachdeva, who presently faces federal criminal charges relating to her conduct, embezzled the funds across at least five years and purposely concealed her fraud from the company, its Board of Directors, Audit Committee and Management. The Complaint further alleges that Grant Thornton, the companya™s auditor during those same years, failed to properly perform audits of the companya™s financial statements and failed to properly assess the companya™s internal controls, thus allowing the embezzlement to continue and the damage to the company to escalate. In particular, the lawsuit claims that Grant Thornton repeatedly assured Kossa™ management and its board that the companya™s internal controls were effective and that Koss could rely on those same internal controls and Grant Thorntona™s work.

aThere is no question that Sachdeva stole from Koss and there is no question that without Grant Thorntona™s failures, the theft would have never occurred,a said lead attorney Michael Avenatti of Eagan Oa™Malley & Avenatti, LLP, the law firm representing Koss. aGrant Thornton was paid hundreds of thousands of dollars to properly audit the companya™s financial statements and they failed miserably. This failure included repeatedly assuring the company and its board that the companya™s internal controls were effective. A company should be able to rely on its auditors.a

About Koss Corporation

Headquartered in Milwaukee, Wisconsin, Koss Corporation is known worldwide for its high fidelity stereophones and audio accessories. Koss Corporation markets a complete line of high-fidelity stereophones, speaker-phones, computer headsets, telecommunications headsets, active noise canceling stereophones, wireless stereophones, and compact disc recordings of American Symphony Orchestras on the Koss Classics label.

About Eagan Oa™Malley and Avenatti, LLP

Michael J. Avenatti, Esq. is a founding partner of Eagan O'Malley & Avenatti, LLP, a firm of trial attorneys that specialize in litigating a variety of high profile legal disputes in courts throughout the United States. Most recently, the firm won a nearly $40 million jury verdict after a five week jury trial in New Jersey.

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