msnbc.com staff and news service reports
updated 11/17/2010 10:00:09 PM ET 2010-11-18T03:00:09

A former Koss Corp. executive who pleaded guilty to embezzling $34 million from the Milwaukee headphones maker has been sentenced to 11 years in federal prison.

Sujata "Sue" Sachdeva had been the company's vice president of finance. She pleaded guilty to using company funds to pay personal bills for clothes, jewelry and other lavish items. The six felony counts carried a maximum penalty of 120 years, although federal guidelines called for a range of 16 to 20 years.

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U.S. District Judge Lynn Adelman said Wednesday he granted Sachdeva a degree of leniency because the 47-year-old cooperated with investigators from the day FBI agents came to her home in 2009.

Koss chief executive Michael Koss told the judge Sachdeva's actions had threatened the company's stability.

Sachdeva never even took the tags off of many of the items and rented storage spaces because she couldn't fit it all in her house.

Sachdeva told the judge, "I stand before you today truly remorseful," NBC station WTMJ reported.

She went on to apologize to her family, and former employer and co-workers.

"I know that you have been deeply hurt by my dishonesty in ways I never imagined or intended."

"I have lost everything that is dear to me, my marriage, my children, my career, my home and my freedom," she said.

Sachdeva's attorneys argue she embezzled the money as a way to pay for irrational shopping caused by mental illness.

"She's sick. There's no other way to say it, and she's getting better," said attorney Michael Hart.

Prosecutors did not dispute Sachdeva likely suffered from bipolar disorder and compulsive shopping. But they said, "it is an explanation, but not an excuse."

Michael Koss, chairman and CEO of Koss Company said Sachdeva's theft caused the company to suffer severely. They were forced to cut profit sharing and pay for employees. He talked about three employees he said suffered financial hardship because of Sachdeva.

Koss had hoped Sachdeva would receive a maximum sentence, closer to 20 years.

Instead, the judge sentenced her to 11 years in a federal prison. That sentence will likely be served in Northern California near Sachdeva's parents.

The Associated Press and WTMJ of Milwaukee, Wisc., contributed to this report.

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