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Court: Park Bank not negligent in Koss embezzlement scheme

By: Associated Press//December 12, 2017//

Court: Park Bank not negligent in Koss embezzlement scheme

By: Associated Press//December 12, 2017//

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MADISON, Wis. (AP) — A state appeals court says Park Bank isn’t liable in a Koss Corp. executive’s scheme to embezzle $34 million from the Milwaukee-based headphones manufacturer.

Sujata Sachdeva was sentenced to 11 years in federal prison in 2010 for using company money to buy clothes, jewelry and other lavish items. Sachdeva obtained a large portion of the embezzled funds through Koss accounts at Park Bank.

Koss sued Park Bank in 2010, alleging bank officials had acted in bad faith because they hadn’t detected that Sachdeva was stealing the company’s money and hadn’t conducted an investigation.

The 1st District Court of Appeals ruled Tuesday that failing to prevent or detect misconduct doesn’t mean the bank acted in bad faith.

Michael Avenatti, a lawyer for Koss, insisted the bank willingly allowed the embezzlement. He said Koss is exploring its options.

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