Media – 2005 and Before

Favorite Media Interviews and Mentions

July 16, 2005: New York Times – How to be a Better Bean Counter, By Joseph Nocera 

”While you cannot legislate competence, it can be learned,” wrote Mr. Antar, the former chief financial officer of Crazy Eddie, where one of the more spectacular book-cooking episodes of the modern age occurred.

Mr. Antar, who now makes speeches to educate people about white-collar fraud, says that reform has to start with accounting education — by which he does not mean learning generally accepted accounting principles. ”The kids who are out on the front lines of auditing, they know nothing about people like me,” he said in an interview. ”It is easy to fool them.”

In his post he wrote, ”Accounting students must take separate in-depth courses in criminology, securities laws, internal controls, insurance/risk management, and other ‘real experience’ areas they require for the fieldwork they will encounter on audits.”

April 20, 2005: The Dickinson Press -White Collar Criminal to Speak at DSU Today: Urges Future Accountants to Learn the Criminal Mind, By Shanna Schoch

Antar…calls his criminal actions “evil” and said at the time of sentencing he believed he would serve jail time and still believes he deserved to.

Most crimes are committed by people no one would suspect, he said. White collar criminals especially cloak themselves with an aura of respectability. Individuals appear sincere and give generously to charities. They strive to behave in ways that are beyond reproach or suspicion. These tactics help make it possible for them to commit crimes, he said.

“We’ve become a society today where people take the information and if everything looks fine, there’s no more questioning. He said. “What happened to people’s ability to think?”

What he sees is a need for accounting students, the future auditors of the world, to be trained in criminal psychology and fraud.

“The problem is prevention,” Antar said,” I feel they are not getting enough training. They get their CPAs before they have any fraud training.”

“I am trying to teach people that you don’t know anyone’s motivation, Antar, said, “If I made you think, made you somewhat afraid, then I have achieved my objective. It is important to have a healthy amount of doubt in the business world.”

March 3, 2005: Muleskinner News (Central Missouri State University) Famous Fraudster Visits Central, By John Lawrence

Show respect – give none. Not something a student would expect to hear from a former accountant. Sam Antar was not your typical accountant. The Accounting Students Association hosted Antar last week.

Antar, the accountant responsible for the Crazy Eddie Electronics Store inventory fraud of the late 1980s, told students how he and his partners created a multi-million dollar company out of what was, in reality, a struggling electronics store.

After opening to a round of applause, Antar, replied, “I appreciate your applause, but that violates rule number one. It’s called unexamined acceptance. That basically means, just the fact that I’m here, my good intentions being here, doesn’t take away the fact that I was a major criminal for many years. I violated a lot of people’s trust. I hurt a lot of people. I did a fraud that was at that time a $500 million fraud,” Antar said.

Antar spoke openly about how his crime was perpetrated. He talked about “skimming off the books” and insurance frauds he had committed. He was very critical of accountants for not being skeptical and not using what he called “professional paranoia.”

“You are going to go into a profession where you really don’t know people’s true intentions. Fraudsters like myself, we build a whole world of respectability around ourselves. I gave money to a lot of charities while I was committing my fraud. My cousin Eddie, he gave a lot of money with his stolen money to a lot of charities. He gave a lot of money to politicians. He built wings on to hospitals and built a big aura of respectability around him and people were in awe of him. This is what fraudsters do,” Antar said.

Antar also spoke critically of businesses and of Wall Street. He said that the abstractionists on Wall Street “have never run real business in their entire lives.” He was critical of businesses that in his words “managed earnings.”

“Do you ever notice how these companies always beat the Wall Street estimates by a penny a share? Do you ever notice how all these earnings have great smooth earnings lines? It’s all a part of them taking their so-called write-offs. Wall Street, do you know what they do? They give them big boost in the stock price because management is taking a good look, a hard look at their operation. But you know something? Tucked away in those one-time charges are all of the screw-ups that they made over all of those years. There’s a big game going on here and there’s a lot of corruption and it’s all legalized by the accounting profession today,” Antar said.

Antar talked about how unprepared students with undergraduate and graduate degrees are when dealing with crime.

“You are not getting courses in criminality. You are not getting courses in psychology. You are not getting courses in what motivates people like me to commit the crimes that I committed that are going to possibly destroy your careers. They are going to cause investors to lose hundreds of millions of dollars,” Antar said.

Antar warned students to be wary of who they choose to trust. “I am an economic predator. I am going to take advantage of everything that you do. Every bit of acceptance, of implied credibility, I am going to take advantage of and I am going to destroy your careers. I will destroy everything that you’ve built. I will take advantage of your prejudices. I will take advantage of your niceties and I will use them against you. That’s what you have to be careful of,” he said.

December 8, 2003: Crain’s New York Business – Fraud-wary Learn Ropes from the Pros of Cons, By Tommy Fernandez

Sam Antar always brings one central message to his audiences: Accountants can’t afford to trust anyone.

He should know. Mr. Antar, one of the masterminds of the $145 million Crazy Eddie stock swindle, says he was able to commit some of his worst frauds during audits because accountants are too trusting. He now gives lectures to accounting students once a month to encourage them to adopt what he calls “professional paranoia.”

“I want them to know that what I did destroyed peoples’ lives and careers,” says Mr. Antar, who committed his frauds at his family’s consumer electronics retailer in the mid-1980s. “And I warn them that if they don’t listen to me, people like me are going to destroy them.”

Mr. Antar says that accountants need to learn to think beyond any guidebooks or even regulations like Sarbanes-Oxley.

“You can’t legislate against stupidity, dishonesty or incompetence,” he says.

October 2000: Journal of Accountancy – So That’s Why They Call It a Pyramid Scheme, By Joseph T. Wells. This article won the Lawler Award for best article in the Journal of Accountancy for 2000

Generally accepted accounting principles (GAAP) require adequate disclosure in the financial statements. Any material fact not covered in the financials should be disclosed in accompanying footnotes.

Sam Antar—a former CPA and auditor—managed to change accounting methods simply by altering two words. In one year, the footnotes stated that certain income was recognized when received (cash basis).

The following year, Sam removed “received” and substituted earned (accrual basis).

The deception went unnoticed by the auditors, and it had the intended effect of boosting income. A careful review of the footnotes from year to year would normally detect such a simple—but in this case, effective—scheme….

Crazy Eddie’s auditors were provided a company office during their examination. They had a key to lock the desk – which they kept in a box of paperclips on top of the desk in full view, After the auditors left for the day, Eddie’s cohorts would unlock the desk, increase the inventory counts on the work papers and photocopy the altered records. Were the auditors stupid? No, just too trusting. After all, no one wants to think the client is a crook. But it happens too often. That’s why the profession requires the auditor to be skeptical.

June 13, 1994: New Jersey Law Journal – Footnote to Crazy Eddie Case: You Talk, You Walk, By Tim O’Brien

On May 31, Sam Antar stood before U.S. District Judge Nicolas Politan to find out whether he, too, would become an inmate. Next to him was his lawyer, Anthony Mautone, of Minichino & Mautone in West Orange, who five years ago told his client to cooperate fully with government. Antar did and in fact cooperated for 29 months before pleading guilty to obstruction of justice and conspiracy to commit mail and securities fraud.

Before sentencing, Antar told Politan, Mr. Mautone’s advice basically saved my life.”

But Mr. Mautone’s advice also preserved his client’s physical freedom. Sam Antar – who told Politan for most of my life I as involved in fraud” totaling $250 million and always knew it was wrong and never thought about it” – walked.

“Sam E. Antar was the critical witness for us and for everybody else. He made extraordinary efforts,” says Howard Sirota of New York’s Sirota & Sirota. Sirota was the lead plaintiffs’ counsel in a class-action suit that last year recovered $60.5 million for the victims in federal court in Brooklyn.

Says the SEC’s Richard Simpson, who won a $72 million judgment – now $90 million with interest – against Eddie Antar in 1990: “The sentence was fair and well reasoned. The message here is that the best a person can do is come in and tell the truth, particularly once he starts getting good advice from his attorney to come in.

Judge Politan made the point himself when he sentenced Sam Antar to three years’ probation, including a six-month house arrest with an electronic monitor, 1,200 hours of community service and fines totaling $10,100….If you come forward you will be rewarded the judge said.

“His cooperation was extremely valuable…It was outstanding; this guy lived here for a couple of years,” says Weissman (Assistant U.S. Attorney).

Most lawyers in the case agree with defense Sam Antar’s defense attorney, Mautone, that without Sam Antar the civil and criminal prosecutions of the Antar family and other officers in Crazy Eddie Inc. would not have succeeded.

Because he initially lied to SEC investigators between the collapse of the company in late 1987 and the spring of 1989 – when Mautone brought him to the prosecutors – it took well over a year to convince the government that his version of what happened represented reality.

The skepticism of the prosecutors, the FBI, the SEC, and the civil lawyers… was compounded by the early testimony of company officials who, according to the SEC’s chief litigation counsel Simpson, lied under oath to protect key players.

One of those officers who came in early and testified before the SEC now faces perjury charges. Grinberg and Arnold Spindler, a Crazy Eddie buyer who were the first to come forward in late 1987, pointed a finger at those in the opposite camp after the Antar clan had split in two following Eddie Antar’s bitter divorce in the mid-1980s.

Aligned against Eddie Antar, the founder and chief executive officer of the company were his father, Sam M. Antar, his brothers, Mitchell and Allen, and others, who were angered after Eddie Antar was caught cheating on this first wife.

Spindler and Grinberg exculpated Eddie Antar’s father and brothers, fingering not only Eddie but Sam E. Antar, who ran the books and dealt with the auditors, Peat Marwick Main & Co. now KPMG Peat Marwick.

“It took us two years almost to convince the government that they had the case upside down, and that they should trust Sam Antar after he lied through his teeth to the SEC during eight days of depositions early on,” says Mautone. He adds that he urged his client to cooperate with the U.S. Attorney’s office “naked, without any deal on blind faith.”

Sam Antar ultimately made everyone’s case – the prosecutors’, the SEC’s in its civil action, the creditors in a Chapter 11, action, and the plaintiffs’ ranging from shareholders to takeover investors in more than 10 civil cases consolidated in the Eastern District of New York.

Says Mautone, “It was on blind faith, and he agreed to change his plea agreement twice to strengthen the government’s hand” in the case against Eddie Antar.

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