A vice president at Fry's Electronics Inc. was indicted this week by a grand jury on five counts of wire fraud and four counts of money laundering in connection with an alleged kickback scheme that pulled in tens of millions of dollars.Ausaf Umar Siddiqui, former vice president of merchandising and operations at Fry's, was indicted by a U.S. District Court in the Northern District of California grand jury for allegedly running a kickback scheme that defrauded the electronics retailer. Siddiqui was arrested in San Jose on Dec. 19, 2007, after working for the electronics retailer for the past 20 years.Siddiqui is currently out of jail after posting bail of $300,000. He is set to be arraigned on Jan. 15.And according to a report last month in the San Jose Mercury News, the San Jose-based electronics retailer is seeking the return of $10 million that Siddiqui allegedly borrowed and failed to repay.Andres Gonzalez, a special agent with the U.S. Internal Revenue Service, investigated the case and wrote in the criminal complaint that an investigation was launched in October 2008 when a Fry's shareholder and upper-level manager contacted the agency and contended that Siddiqui was defrauding the company. Gonzalez noted in the complaint that the informant provided documents, such as spreadsheets outlining purchase orders and kickback amounts, to the IRS.The privately held electronics retailer, founded in 1985, operates 34 stores in nine states.According to the court filing, Fry's hired Siddiqui in 1988 as a salesman and then he worked his way up the corporate ladder to various positions, including computer department supervisor and director of advertising. In 2003, he was appointed vice president of merchandising and operations at a salary of $225,000.In his most recent position with the company, he was mainly responsible for buying all the products, such as computers, components and routers, sold in the company's stores.Within the past few years, Siddiqui allegedly worked out a deal with Fry's executives that enabled him to work directly with some vendors, according to the court documents. However, allegedly unbeknownst to the company, Siddiqui made "secret, backroom deals" with certain vendors, according to the complaint. He is alleged to have awarded contracts to a small group of vendors in exchange for a kickback or commission of as much as 31% of the amount of the contract, it said. The government contends that that percentage is four to 10 times higher than what a traditional sales agent would receive.To make up for the high kickbacks, the vendors charged Fry's more than market value for the merchandise, according to court documents. The IRS said that Siddiqui set up a fraudulent company called PC International LLC to which the vendors paid the kickbacks directly.According to the government, the maximum penalty for each count of wire fraud is 20 years in prison, and it's 10 years for each count of money laundering.In a similar case, a former IT contractor for the city of Newark, N.J., pleaded guilty this past July to using his position to defraud Cisco Systems Inc. of millions of dollars.