Advertisement

Fry’s exec fired over alleged $65-million kickback scheme

Share

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

Fry’s Electronics, known as a nerd nirvana for its quirky stores and vast gadget selection, has fired a top executive accused of taking more than $65 million in kickbacks from vendors to finance his high-rolling lifestyle and pay gambling debts.

In a criminal complaint unsealed in federal court in San Jose this week, the Internal Revenue Service said Ausaf Umar Siddiqui, 42, set up a shell company to conceal the payments from five Fry’s vendors from January 2005 to November 2008. The IRS alleges that Siddiqui cut side deals with suppliers to buy their goods at higher prices and in larger quantities than the retail chain normally would have.

Advertisement

An employee of the privately held chain tipped off the IRS in October after stumbling upon spreadsheets detailing the kickbacks in Siddiqui’s office, the IRS said.

Siddiqui, who goes by Omar, was vice president of merchandising and operations at Fry’s and oversaw the team responsible for buying the goods sold in 34 stores in nine states. He was arrested at the company’s headquarters in San Jose on Friday and appeared in court Monday, said Arlette Lee, spokeswoman for the IRS’ Criminal Investigation division. His attorney, Sam Polverino, declined to comment.

Siddiqui’s money troubles came to light in a San Jose federal courtroom as defense lawyers argued for lower bail because of liens against his Ferrari and $1-million Palo Alto condominium. Siddiqui was released on a $300,000 bond and was ordered to wear an electronic ankle bracelet.

The source of his troubles appears to be gambling.

Read the full story here.

-- Jessica Guynn

Advertisement