Executives often have the mentality that the "bad stuff" doesn't happen at their company. Averages apply to others, and corporate theft or embezzlement happens elsewhere. And Sarbanes-Oxley was supposed to protect investors from fraud.
How does the alleged $31 million fraud at Koss Corp., a company with sales of no more than $45 million, go undetected for years? Blame management. It gave the employee charged with misappropriating funds far too much autonomy. And it never told auditors to do more than just the required audit.
Ponzi schemes were big news in 2009, but one of the most interesting white-collar crimes of the year appears to be good, old-fashioned embezzlement: $20 million allegedly siphoned from Milwaukee-based stereo headphone maker Koss Corp. Why did it take so long before anyone noticed?