Headphone company Koss sues former VP and accounting firm in $30m embezzlement scandal

American consumer electronics company Koss, famous for its stereo headphones, has filed a lawsuit against its former Vice President of Finance, Sujata Sachdeva, and against Grant Thornton, LLP, one of the nation's largest accounting firms, alleging fraud and deceit, professional negligence, and breach of fiduciary duty.

The company says that Sachdeva embezzled funds for at least five years, and that Grant Thornton failed to properly audit the company's financial statements and discover Sachdeva's actions.

It was discovered last December that Sachdeva had embezzled tens of millions of dollars from Koss, and used the money to "fund a lavish lifestyle complete with furs, jewelry and high-end clothing."

"Grant Thornton was paid hundreds of thousands of dollars to properly audit the company's financial statements and they failed miserably," said Michael Avenatti, lead attorney representing Koss. "This failure included repeatedly assuring the company and its board that the company's internal controls were effective. A company should be able to rely on its auditors."