"Ausaf Umar Siddiqui is accused by the IRS of concocting an incredibly profitable scheme in which he cut side deals with some of Fry's suppliers, buying their goods at higher prices than they would normally get, and buying more of them than he normally would, in exchange for kickbacks of up to 31 percent of the total sales price.
The IRS alleges in a criminal complaint filed against Siddiqui that he set up a shell company that hid $65.6 million in kickback payments from five Fry's vendors from January 2005 to November 2008. Of that amount, $17.9 million was paid to subsidiaries of Las Vegas Sands Corp., which operates the Venetian Casino Resort, according to the criminal complaint and regulatory filings. Authorities confirmed the payments went to the casino.
Siddiqui, who lives in Palo Alto, was ordered held on $300,000 bond Monday at a hearing in U.S. District Court in San Jose. He has been in custody since Friday, when agents arrested him at Fry's headquarters in San Jose in front of stunned co-workers. The details about his Ferrari and the private jets came out during the hearing Monday.
His home phone number is unlisted, and it wasn't immediately clear whether Siddiqui had a defense lawyer. A criminal complaint is one of the preliminary investigative steps for arresting someone and securing an indictment.
A Fry's spokesman did not return a phone call from The Associated Press left after-hours.
Siddiqui has not been formally charged yet with the wire-fraud allegations laid out in the criminal complaint. Arlette Lee, spokeswoman for the IRS' Criminal Investigation division, said the judge in the case has given the government 20 days to file formal charges, which she said prosecutors intend to do."