San Jose -- In casino parlance, there are the pikers, the cheap gamblers who spend hours at the nickel slots sucking down free drinks. There are the high rollers, who spend big money and are treated to free rooms. Images Ausaf Umar Siddiqui worked at Fry's Electronics for 20 ye... View More Images Video View Larger Size And then there are the whales, the biggest spenders of all. To all appearances, Ausaf Umar Siddiqui was a Moby Dick of a whale, dropping millions and millions of dollars, sometimes in minutes, on high-stakes baccarat games in Atlantic City and Las Vegas, according to court documents. As his losses deepened, casinos courted Siddiqui, and while he was slow to pay, he did pay: According to the IRS, he sent more than $120 million to firms belonging to the Las Vegas Sands and the MGM Grand alone since 2005. On Friday, the IRS filed a complaint alleging that Siddiqui, 42, was gambling with stolen money - more than $65 million embezzled over several years through a kickback scheme Siddiqui engineered from his office at the San Jose headquarters of Fry's Electronics. That afternoon, more than a dozen IRS agents walked into the Fry's building and arrested Siddiqui. In reality, according to the IRS, Siddiqui was a minnow playing as a whale. The former computer salesman had worked his way up to become a Fry's vice president, and his annual salary was about $225,000 - hardly leviathan. Siddiqui's 20-year career at Fry's came to an end Monday when he was fired the same day he appeared in federal court to face a wire fraud complaint. His bail was set at $300,000, with orders that he accept electronic monitoring. His attorney, Sam Polverino, declined to comment in detail on the case. "We haven't seen any of the evidence," he said. "I just hope that people continue to accord people who are charged with crimes the presumption of innocence. Allegations are only as strong as what can be proven." Fry's spokesman Manuel Valerio called the arrest of Siddiqui, who had a solid business friendship with company president and co-founder John Fry, "distressing, dismaying and disheartening." In the federal complaint filed Friday and unsealed Monday, IRS Special Agent Andres Gonzalez outlined how Siddiqui allegedly used his powerful position at Fry's to set up a multimillion-dollar kickback scheme and route the proceeds to the casinos. History of gambling Court records from California, Nevada and New Jersey suggest Siddiqui has had a long and problematic relationship with gambling; in 2004, when he was sued by Trump Taj Mahal Associates, his own attorney noted that "someone who loses $6 million in two days or even in less" - as Siddiqui had done - "would certainly qualify as a compulsive or imprudent gambler." Yet that did not make Siddiqui less popular at casinos. In the same lawsuit by Trump - which did not comment on the case Tuesday - Siddiqui claimed that he was repeatedly courted by casinos by mail and phone. Trump, for example, heard about Siddiqui's high-stakes blackjack play in Las Vegas and lured him to Atlantic City in August 2001 with a ride on a casino jet, a $6 million credit line and a promise - later contested in court - that his losses would be discounted, according to Siddiqui's filings. At Trump, Siddiqui - already reeling from recent losses in Las Vegas - promptly lost the entire $6 million in just a few hours of playing baccarat, according to court records and an associate of Siddiqui's who spoke on condition of anonymity. The associate said Siddiqui liked to refer to himself as the biggest gambler in the country, favoring high-stakes baccarat, the game of James Bond. But, for a long time, he tried to hide his losses from business colleagues in the Bay Area because he was concerned it would hurt his career. The casino eventually settled the lawsuit with Siddiqui in 2005. The terms were not made public. Yet records suggest Siddiqui's finances continued to slip. In late 2006, Fry's loaned him more than $5 million, which was secured by collateral, including Siddiqui's Ferarri, his Mercedes, his modest Palo Alto townhouse and a 25-acre parcel of ranchland he owns in San Jose. Fry's Valerio was not able to provide details on the circumstances of the loan or the reasons Siddiqui needed the money, but records show that in 2007 the IRS ordered him to pay more than $18 million in back taxes. By then, according to the IRS, Siddiqui was already running his kickback scheme. Oversaw Fry's purchasing According to Gonzalez's filing, the scheme began in early 2005 when Siddiqui, who oversaw all merchandise purchasing at Fry's 34 stores, persuaded the company to let him change the way he dealt with vendors. Normally, vendors would work through sales representatives who would receive commissions. Siddiqui proposed cutting out the middleman, letting him deal directly with vendors and saving Fry's money, according to the complaint. What Siddiqui actually did, the complaint alleges, is set up secret deals with several vendors where he added commissions or "marketing fees" to the price of the merchandise. When the deal closed, the vendors would refund that fee - in some cases as much as 30 percent of the total cost - to a company called PC International LLC, which the IRS calls a shell company. Since 2005, according to the complaint, Siddiqui collected more than $65 million in kickbacks from five vendors - Behavior Tech Computer Inc., Phoebe Micro Inc., Lead Data International Inc., Promedia Technologies Inc. and Elitegroup Computer Systems. Representatives of those companies, who are not named as defendants in the IRS complaint, either declined to comment or did not return calls Tuesday. The $65 million went into a PC International account that eventually contained more than $162 million, according to the IRS, of which more than $121 million was transferred to the Sands and the MGM Grand since 2005. Neither casino would comment on the case. The IRS is not sure where the rest of the money in the account came from or went, spokeswoman Arlette Lee said. The IRS said the matter came to light when another Fry's manager - who is not named in the complaint - found in Siddiqui's office a set of spreadsheets stamped "confidential" that outlined the kickback scheme. The informant also found letters from the vendors discussing payments they were making to PC International. A second manager launched an internal investigation that found corroborating purchase orders, and IRS agents found further documentary evidence in searches of Siddiqui's bank records and his garbage, according to the federal agency. Valerio said that despite the magnitude of the alleged theft, the company does not believe it affected prices - in part because the store has a policy of matching competitors' prices and in part because $65 million is a relatively small amount for Fry's. The private company is estimated by Hoover's Online to have had nearly $2.4 billion in revenue in 2007. "It would have come out of our profit margins ... and not out of the customer's pocket," Valerio said. "That $65 million that the IRS is referring to is nothing to sneeze at, but it doesn't irreparably harm our company." Chronicle writer Verne Kopytoff contributed to this report. 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