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Koss VP Sue Sachdeva: Shopping Addict or Burgeoning Retail Queen?

It’s been a few days since we had read anything on embezzler of the year 2009, Sue Sachdeva. We figured the whole thing was on the fast track to getting resolved since her attorney started claiming that the woman has an addiction. Well today, we checked in over at Fraud Files Blog where Tracy Coenen has come up with a theory that blows the whole shop until you die argument out of the water

Since Sue had 461 different pairs of shoes that ranged from sizes 8 to 14 (!) and 34 fur coats, Tracy is thinking that S-squared didn’t have a shopping problem; she was simply working on achieving an entrepreneurial dream:

She couldn’t have worn that range of sizes, but that range would have been perfect for someone retailing the merchandise. I bet we’re going to hear soon that Sachdeva was selling this merchandise to domestic and overseas retailers at a fraction of their wholesale value.

It’s already a matter of record that SS was having garage sales at her desk, so Tracy’s logic makes sense. We’re now convinced Sue had bigger plans.

Obviously enamored with the idea of a Sachdeva Goodman’s, Suze may have gotten a little ahead of herself as Tracy notes, “[I]n late 2009 (which is fiscal 2010 for Koss) she got greedy and stole much more in a six month period than she ever had in one year.”

The indictment lists six wire transfers (total of nearly $3 mil) from Koss accounts directly to her personal AMEX accountant, so girl was definitely burning up the plastic. That’s not an addiction; that’s inventory. Besides, isn’t a shopping addiction a faux-addiction? The real tragedy here is that a dream was not reached and an accounting firm was fired. Neither makes us feel very good.

The Latest Developments in the Overstock Accounting Mess

In case you haven’t been paying attention, this has been a banner week for the alleged but fairly obvious and ongoing Overstock.com accounting drama (aka “The Quarterly Lie”) and now’s your chance to get caught up. Thank me later (unless you are Patrick Byrne, in which case you are welcome to trash me later out of pure, outraged butthurtedness).

Gross violations of the sanctity of GAAP are not the largest of Overstock’s numerous accounting issues. I know, how could it get any worse? Sam Antar discovers GAAP violations both new and old in this, the latest hilariously fraudulent SEC filing by our friends at OSTK. What makes it even funnier is that they apparently attempted to slip in the new violations with old ones in the hopes that the SEC (and those of us paying attention) may not notice.

Overstock.com nonchalantly lumped in its latest GAAP violations with other GAAP violations previously disclosed by the company on January 29, rather than separately disclosing them. Those newly identified GAAP violations add to a long laundry list of other violations.

Well that’s cute. Now I may not be an SEC filing savant like some among us but, um, something smells wrong here. I’d say I can’t put my finger on it but I can, the only problem is I can’t seem to wash the stink off my finger.

Gary Weiss is also all over it (naturally) and is equally shocked that OSTK would attempt to casually insert new, previously undisclosed accounting violations in with the old, previously disclosed accounting violations as if, you know, it’s a good idea to just lump them all in together while we’re on the subject of violating GAAP accounting. I’m no CPA but if I were advising Overstock on its accounting practices, I might warn against netting its creative accounting in SEC filings for starters. Separately stated items, people, come on.

Do you think it’s merely a coincidence that Overstock has burned through two audit firms in a year’s time? Perhaps not and maybe KPMG has the magic touch that will turn Overstock’s straw financials into gold but if we were the betting type, we’d put our money on indictments and a really messy fall for the Salt Lake City outlet.

We’re all calling bullshit, Overstock. Your turn.

Fraudbusters Get a Lesson in Internet Stalking

Yesterday I sat in a session at the ACFE Fraud Conference and Exhibit entitled “Effectively Using Social Networks and Social Media in Fraud Examinations” with a few hundred [?] fraudbusters and I got the impression that few people in the room were social media savvy (in the stalk-y sense, anyway). I came to this conclusion after watching most of the hands in the room go up when asked “who thinks social media is a waste of time?” and saw nearly same amount of hands raised when asked “do you have some sort of social network presence?”

Cynthia Hetherington, President of Hetherington Group, described herself as “[A] librarian, a technologist and licensed private investigator. So, I’m a nerd, I’m a geek and I’m a dick,” was the speaker for this particular session and a lot of her talk introduced the crowd to the idea of stalking people on the Internet. She knew her crowd well, as a joke about Laverne & Shirley’s apartment got plenty of laughs, while a quip about Snooki got crickets. This reinforced my suspicion that the idea that of curating information about financial crooks using Facebook and Twitter was new to many in the room.

Now, the majority of people listening may have known it was possible to find partially-nude pics on someone’s Facebook profile or Twitter account (which she demonstrated in one non-Anthony Weiner example) but maybe they hadn’t considered that they could learn a lot of other useful information about someone they were investigating.

In short, Ms. Herrington explained to the biz casual crowd that you can find out a lot of information about a person just by poking around their social media accounts. Whether it’s Facebook, Twitter, or LinkedIn, you can learn someone’s likes, dislikes, their political leanings, where they’ve lived, who their friends are, etc. and use that information to build a profile, analyze behavior or in some cases, find out where someone maybe hiding.

What does all this mean? Opportunity my friends. If you fancy yourself social media and Internet savvy, you probably have a leg up on many of the vets in the fraud and forensics business when it comes to poking around the Web and finding information on people of interest to you. Sure you may not have their years of investigative expertise, extensive contacts or an aging wardrobe but you may have successfully Web-stalked ex-significant others, crushes and completely random people to learn things that they’ve volunteered into cyberspace. And here you thought your creepy behavior was completely worthless.