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White Collar Fraud

Sam Antar

Crazy Eddie’s Two Sets of Books

Crazy Eddie Crime Spree

The Crazy Eddie crime spree evolved in three phases:

(1) 1969-1979: Skimming and under-reporting income (tax fraud) prior to the big plan to go public
(2) 1980-1984: Gradually reducing skimming to increase profit growth in preparation for the initial public offering, i.e., committing securities fraud by “going legit”
(3) 1984-1987: As a public company, overstating income to help insiders dump stock at inflated prices using a variety of fraudulent tricks

Gradual Reduction of Skimming in Preparation for Initial Public Offering (Fiscal Year 1980 to 1984)

The gradual reduction in skimming inflated reported pro forma earnings growth and store unit productivity growth in the fiscal years prior to Crazy Eddie’s initial public offering in September 1984.

Crazy Eddie Gradual Reduction of Skimming Calculations for Fiscal Years 1980-1984
Crazy Eddie Gradual Reduction of Skimming Calculations for Fiscal Years 1980-1984

 

Inflation of Reported Income After Initial Public Offering (Fiscal Year 1984 to 1987)

After the initial public offering, Crazy Eddie overstated reported income to help insiders sell stock at inflated prices.

Crazy Eddie Inflation of Earnings after its IPO for Fiscal Years 1984-1987
Crazy Eddie Inflation of Earnings after its IPO for Fiscal Years 1984-1987

Notes:

The management team who gained control of Crazy Eddie claimed that its cumulative earnings inflation was approximately $70 million, while my calculations show that cumulative earnings inflation was $57 million. The differences in amount, though relatively small, can be primarily explained by alternative methodologies used new management and me to compute the scope of Crazy Eddie’s fraud. In addition, my computations extend only to the fiscal year ended 3/1/87, whereas new management’s computations extend to the period ended 11/30/87.

See Appendix B – Crazy Eddie Red Flags

Written by:

Sam Antar

© Copyright by Sam Antar. All rights reserved.

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Book

  • Retail Gangster: The Insane, Real-Life Story of Crazy Eddie, by Gary Weiss, Hachette Books, August 23, 2022
  • Crazy Eddie, The Criminal Show, March 17, 2023
  • New book explores the insane career of Syrian Jewish hustler ‘Crazy Eddie’ Antar, Times of Israel, September 14, 2022
  • Retail king Crazy Eddie was a high school dropout who once got stabbed outside a nightclub, New York Post, September 10, 2022
  • ‘Retail Gangster’ Review: Let’s Make a Deal, Wall Street Journal, August 22, 2022
  • Crazy Eddie’s Life Was Insane!, New York Times, August 9, 2022

White-Collar Crime

  • Jordan Thomas’s Army of Whistle-blowers, The New Yorker, January 17, 2022
  • Why the CFO of a Famously Corrupt Company from the 1980s is Working for the Government – Worth, August 14, 2019
  • A Convicted Felon Explains How He Pulled Off An Infamous Accounting Fraud (Podcast) – Bloomberg, May 20, 2019
  • Why criminals never think they’ll get caught: The Crazy Eddie story – LinkedIn Pulse, April 5, 2019
  • Inside the Always Nasty, Frequently Sexist, and Often Litigious World of Financial Twitter – Institutional Investor, August 1, 2018
  • Why is Bank Leumi telling foreigners to close their accounts? And what’s the link to Israel’s malignant black economy? – The Times of Israel, September 12, 2016
  • ‘On Like Donkey Kong’: How a Dubious Super PAC Boosted a Questionable Penny Stock – ProPublica, May 27, 2016
  • Crazy Eddie’s Insanely Successful Criminal Enterprise – Mental_Floss, March 31, 2016
  • Crazy Eddie CFO: ‘We are in the golden era of white-collar crime’ – CNN Inside Wall Street, November 17, 2014
  • White Collar Crime 101: How to Defraud a Company – Wall Street Journal, July 29, 2014
  • Sam Antar: The CFO behind the Crazy Eddie’s fraud – MarketWatch, July 29, 2014
  • Why Drug Lords and Criminals Are So Risk-Averse – Bloomberg, February 21, 2014
  • Country Club Sopranos – Village Voice, October 31, 2012
  • Crazy Eddie fraudster says SEC can’t keep up – MarketWatch, June 7, 2013
  • Convicted Felon, Former Crazy Eddie CFO, Sam Antar, Talks to Lauren Lyster About Accounting Fraud – Zero Hedge, August 3, 2012
  • Crazy Eddie’s Cousin Sam Sees Greater Potential for Fraud – Accounting Today, June 29, 2012
  • The 25 Most Dangerous People in Financial Media – Huffington Post, June 18, 2012
  • When Sam Antar Speaks, People Listen…and Speak Their Mind – Forbes, March 5, 2012
  • Inside the Mind of a Financial Criminal – NPR Planet Money, July 5, 2011
  • Special Report: From Hannibal Lecter to Bernie Madoff – Reuters, April 20, 2011
  • Financial fraud — accounting for criminals – CNN, October 9, 2009
  • Crazy Like A Fox, Guess who’s tipping off the SEC on alleged accounting frauds? None other than the guy who cooked the books at Crazy Eddie – Crain’s NY Business, October 5, 2009 (PDF)
  • Redemption and the white-collar criminal – CNN, October 2, 2009 (PDF)
  • Still Searching for Repentance – Jewish Week/Times of Israel, September 22, 2009
  • ‘Crazy’ Eddie’s Cousin, a Former Fraudster, Speaks Out on Syrian ‘Subculture of Crime’ – Jewish Daily Forward, August 26, 2009
  • Crazy Eddie’s cousin stars in state Republican hearing on public corruption – Atlantic City Press, August 17, 2009
  • A Few Words from a Fellow Fraudster – Gawker, December 24, 2008
  • Smart Stops on the Web – Journal of Accountancy, December 1, 2008
  • How to Be a Better Bean Counter – NY Times, July 16, 2005
  • So That’s Why It’s Called a Pyramid Scheme, Journal of Accountancy, October 1, 2000

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