White Collar Fraud

Convicted Felon, former CPA, and former Crazy Eddie CFO Sam Antar speaks out about white-collar crime

   

 

 

 

White Collar Fraud Blog


My White Collar Fraud blog discusses, white-collar crime, securities fraud, financial disclosures, the accounting profession, internal controls, Sarbanes-Oxley, government corruption, and other related topics. Red flags and other financial reporting irregularities investigated and reported in this blog are referred to appropriate government agencies as a whistleblower. Material from my blog has been used by the Securities and Exchange Commission and in class action lawsuits against certain public companies for improper accounting practices and financial disclosures. My blog was recommended by the Journal of Accountancy. The Huffington Post named me one of the 25 most feared financial reporters in America.

Recent blog posts below:

 

My forensic accounting investigation exposed GAAP violations by Overstock.com (NASDAQ: OSTK) which caused the company to restate its financial reports for the third time in three years.

From the book "Selling America Short" by Richard C. Sauer:  

Antar wrote a series of lengthy and precisely-considered blog posts accusing the company of creating a revenue "cookie-jar" that it accessed over several quarters to tart up its reported results. Patrick Byrne scoffed that Antar was spouting "gibberish" that no accountant would take seriously.

Oh well.

In a highly unusual about-face, the SEC re-opened its investigation of Overstock.com, demanding information about a variety of issues including the practices targeted by Antar.

[Snip]

This dispute did not end happily for Byrne. KPMG sided with ex-felon Antar. In early February 2010, Overstock announced that its financial statements for the period at issue should no longer be relied upon by anyone who might otherwise have considered doing so, pending their restatement. The result is that the company will now have restated at least once for every fiscal period since becoming a public company.

From October 5, 2009: Crain's New York Business - Crazy Like a Fox by Aaron Elstein (Download)

Sam E. Antar  knows a thing or three about fraud. He was chief financial officer at Crazy Eddie, the infamous appliance retailer with “insaaaaane” prices that skimmed profits, evaded taxes, laundered cash and fudged inventories for a Madoff-esque 15 years before collapsing in 1987.

Mr. Antar pleaded guilty to conspiracy and obstruction of justice charges, but avoided jail by turning against the relatives who ran the business with him. He was the government’s star witness at a 1993 trial. His cousin, Chief Executive Eddie Antar, ultimately went to prison for about seven years.

Now Sam Antar, 52, is using the expertise he gained as a criminal to uncover accounting problems at other companies. Exhibit A for him these days is Overstock.com Inc.,an online retailer with a recent history of accounting issues.

[Snip]

Despite his felonious past, Sam Antar has earned credibility with law enforcement officials. He’s spent much of the past decade talking to the FBI, the Justice Department, the IRS, accounting students and business groups, explaining how Crazy Eddie fooled auditors for so long.The former CPA says he feels bad about what he did and wants to help overmatched investigators as they try to root out savvy fraudsters.

“He knows accounting backwards and forwards,” says Richard Simpson, an SEC attorney who helped lead the government’s probe into Crazy Eddie.

Sample recommendations below:

December 2008: Journal of Accountancy - Smart Stops on the Web

Who knows fraud better than a fraudster? Sam E. Antar, former Crazy Eddie Inc. CFO and convicted felon, shares his views and advice on white collar crime, securities fraud, internal controls, Sarbanes-Oxley and more on his blog. The introduction states, “The well-educated, skilled, and experienced accountant is the first line of defense for the capitalist system.” And, toward that end, Antar points out inconsistencies in companies, organizations and governments, offers how-tos on detecting fraud, and muses on wrongdoings. You can browse by the most popular posts, learn more about the Crazy Eddie fraud scheme, check out fraud facts, and find related blogs in his list of links.

September 5, 2010: Reuters - When short sellers fund journalists by Felix Salmon

Still, the fact is that someone like Sam Antar, for all his past history and possible conflicts, produces much more interesting, more insightful, more useful, and more transparent journalism than Ben Stein could ever dream of.

September 20, 2010: TheStreet.com - AIG Case Proves Auditors Are Useless by Gary Weiss

One of my favorite bloggers, the former Crazy Eddie book-cooking mastermind Sam Antar, has a hobby of doing the kind of stuff that auditors are paid to do, which is, theoretically, to root out gamey accounting. He has single-handedly--just for kicks--uncovered accounting shenanigans at more public companies than you can shake a green eyeshade at. Every one of those companies had auditors, usually with Big Four accounting firms, that were supposed to actually find that kind of stuff.

June 15, 2011: Seven Days - An Ex-Con Turned Accounting Expert Alleges "Irregularities" at Green Mountain Coffee by Andy Bromage

In fact, Antar is up front about his crooked past, saying it enables him to spot the bad guys. His blog’s motto is “It takes one to know one.”

More importantly, Antar has earned the trust of federal investigators in the SEC, FBI and the U.S. Justice Department for his assistance in spotting accounting fraud. As a result of Antar’s research, the SEC reopened an investigation into Overstock.com. After Antar wrote a blog post questioning accounting practices at Bidz.com, a jewelry auction site, the SEC ordered the company to produce internal records.

“He never stops talking to the SEC,” says Boyd, who first met Antar as a financial reporter at the Post. “They listen. He lays shit out in detail to them. The guy gets results.”

In a 2009 profile of Antar in Crain’s New York Business, the SEC attorney who headed up the government’s investigation of Crazy Eddie said Antar “knows accounting backwards and forwards.”


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