Former Fry’s executive gets six years in jail, huge fine
Ausaf Umar Siddiqui, a former Fry’s Electronics Inc. executive, was sentenced to six years in prison Thursday in San Jose for his role in a kickback scheme to defraud his former employer.
An announcement made by the U.S. Attorney's Office Thursday said Siddiqui, a 45-year-old Palo Alto resident, was also ordered by U.S. District Court Judge Jeremy Fogel to pay restitution in the amount of more than $65 million.
According to court documents, Siddiqui engaged in a scheme from 2004 to 2008 to defraud Fry's, a San Jose-based consumer electronics retail chain. The documents said Siddiqui — in order to induce vendors who sold products to Fry's to pay him and not the retailer — created and controlled two fake companies that conducted no other business than to receive those fraudulently induced payments. The documents said he told his superiors at Fry's he would obtain merchandise for them at a lower price if they authorized him, as the vice president of merchandise and operations at Fry's, to enter into direct sale contracts with vendors. The documents said Siddiqui failed to inform his employer he had made secret deals with vendors for them to make payments to his two sham companies, which he called PC International and International Marketing Resources LLC. On several occasions, those vendors advanced kickback payments to Siddiqui before Fry's paid vendors for their merchandise, according to court documents.
After initially being indicted in January 2009 on five counts of wire fraud and four counts of money laundering, Siddiqui pleaded guilty to one count of each. Following his sentencing Thursday, he was immediately taken into custody.
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