History
John C Koss founded the J.C. Koss Hospital Television Rental Company in 1953. After a short time Koss was looking for new ideas, and partnered with Martin Lange to eventually develop a stereo headphone. Based in Milwaukee, Wisconsin, USA, in 1991 Koss Audio & Video Electronics started producing and selling consumer electronics products as a separate company in Hazelwood, Missouri, USA. The Koss family owns more than 75% of the firm.
Having only a high-school education, John C Koss worked with Lange, an engineer, to develop the headphone that launched the company almost by accident, as they came upon the headphone idea as a result of an attempt to market a portable phonograph.
Diversification into related electronics areas in the 1980s ended in disaster for Koss, who filed for bankruptcy protection after a net loss in 1984 of $6 million. Koss emerged from Chapter 11 bankruptcy proceedings in 1985.
In 1991 Michael J Koss, son of founder John C Koss, took over as president and chief executive officer.
In December 2009, former vice president of finance Sujata "Sue" Sachdeva was charged in federal court with wire fraud after the firm discovered her embezzlement of $34 million during a five-year period during which the company's average net income was $6 million. Sachdeva was later sentenced to 11 years in federal prison. Allegedly, as much of $2 million of the missing funds were used to purchase clothing and other luxury items that were stored unused, often with the tags still attached. Ultimately, Koss was forced to restate five years of financials.
Read more about this topic: Koss Corporation
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