A 20-year employee of Fry’s Electronics was found guilty of embezzling $65.6 million over a four-year period from the electronic store to pay off his debt and fuel his lavish lifestyle. According to the Internal Revenue Services (IRS), Omar Siddiqui created back-room deals with five supplier companies for Fry’s Electronics. The company overpaid for merchandise that was later sold at a reduced price resulting in a significant financial loss for the company. The leftover money was deposited into a shell company account, PC International, controlled by Siddiqui.
As the former Vice President of Merchandising and Operations for Fry’s, Siddiqui supervised a staff of 120 individuals responsible for buying all merchandise sold at the 34 Fry’s locations in the United States. It is alleged that Siddiqui convinced executives at Fry’s Electronics that despite his staff of 120 he should be solely responsible for the purchasing from suppliers, instead of independent contractors, resulting in the vast amount embezzled from the electronic chain.
The IRS filed a criminal complaint against Siddiqui in 2011. After filling the complaint, the IRS further examined Siddiqui’s bank records. He had racked up $167 million in gambling losses over 10 years and had taken out loans totaling approximately $10.4 million. In addition, the IRS had a $18.5 million lien on his property for unpaid taxes.
ClearForce could have identified Siddiqui’s unusual financial behavior in real time, thus allowing his employer to investigate and make ongoing decisions regarding his control of purchasing power for Fry’s Electronics stores. ClearForce could have notified leadership early regarding significant and unusual increase in personal financial debt, reduced Siddiqui’s access to financial information, and restricted ability to “sign off” on vendor contracts without review.