Media – 2008

Favorite Media Interviews and Mentions

December 16, 2008: New York Times Freakonomics Blog – A career option for Bernie Madoff?, By Stephen J. Dubner

Bernard L. Madoff is not a young man, and if he is convicted of the crimes of which he stands accused, he may spend the rest of his life in prison.

But on the off chance he doesn’t, he may wish to consider Sam Antar, of Crazy Eddie fame, as a future role model.

December 1, 2008: Journal of Accountancy – Smart Stops on the Web

IT TAKES ONE TO KNOW ONE
www.whitecollarfraud.blogspot.com

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.

March 27, 2008: The Gaineville Sun -Ex-con speaks about his crimes during conference for auditors by Megan Rolland

A man who perpetrated a multimillion-dollar fraud detailed his crimes Wednesday morning to a room full of internal auditors.

“I loved being a criminal,” said Sam Antar, who said he became a CPA so his family business could execute better crimes. “I loved screwing people over.”

Antar on Wednesday kicked off a two-day conference hosted by the North Central Florida Institute of Internal Auditors.

He is the former chief financial officer for Crazy Eddie Inc., a New York-based appliance store that disintegrated more than a decade and a half ago amidst a $120 million fraud investigation.

“It was a 20-year crime and we took advantage of every opportunity along the way,” Antar said.

Some 17 years ago, Antar avoided a lengthy prison sentence by telling federal prosecutors all about his family’s multimillion-dollar scams. Now Antar travels on his own dime to instill important tools in auditors to help them catch thieves.

Cynicism was Antar’s single most important message.

“How do you know I’m still not a crook?” he asked the crowd of auditors at the Paramount Hotel.

Antar said criminals prey on the humanity and trusting nature of auditors to get away with their crimes.

There are about 50 members in the local chapter of the auditing association.

The association’s treasurer, Brian Mikell, said that auditors need a way to meet and band together.

“Auditors are kind of people unto themselves,” said Mikell, who is an auditor at the University of Florida.

Internal auditors have the job of telling their bosses bad news about the company – not an easy task, Mikell said.

Antar said his family’s crime, for which his cousin Eddie Antar served prison time, began as a simple case of bait and switch.

“Once you start, it’s a slippery slope,” Sam Antar said. “There’s no end.”

The company falsified inventory, skimmed millions off the top of sales taxes, and became a publicly traded company with over-inflated stock.

Bank accounts were set up in Tel Aviv, Israel, to hide the unaccounted-for millions, and money was laundered back into the U.S. through Panama, Antar said.

Compared to more recent scandals at Enron and WorldCom, Crazy Eddie’s might seem small-time, but in its day, the scam shocked the financial world, organizers of Wednesday’s event said.

In response to the increase in business crimes, the federal government passed a bill in 2002 commonly called Sarbanes-Oxley. It requires, among other things, that publicly traded companies have internal auditors.

The vice president of the regional chapter of Institute of Internal Auditors, said that change in law has cost businesses millions as they come into compliance.

Those who attended the conference were a mix of internal and external auditors and chief financial officers. The employees came from companies including Shands Hospital, Girl Scouts Association, city of Gainesville, Alachua County Sheriff’s Office and many others.

While Antar talked about inventory or retail fraud, other speakers both Wednesday and today will discuss other types of fraud including construction fraud, identity theft and insurance fraud.

March 3, 2008: Jackson Clarion Ledger – Exec snared in 1980s fraud urges skepticism by Nell Luter Floyd

Millsaps students told to verify information.

White-collar criminals are charming people who want to gain the trust of their accountants and auditors, a former executive involved in one of the largest securities frauds of the 1980s said on Monday.

“By the time you get to the point where you start asking questions, we’ll have built up your comfort level and you’ll think, ‘This kid can’t be a thief,’ ” said Sam Antar, a former certified public accountant and chief financial officer of Crazy Eddie’s Inc., a consumer electronics chain located primarily in the Northeast that went bankrupt in 1989.

Antar spoke to an audience of about 100 people at Millsaps College.

He was the key government witness in both criminal and civil prosecutions related to Crazy Eddie’s fraud and now speaks about fraud for free. He pays for all his costs of travel and lodging.

In a strategic plan published by the FBI in 2004, the FBI noted it was investigating 189 major corporate fraud cases, with 18 valued at $1 billion or greater.

Antar advised students to verify what a client being audited says and then extend trust rather than extending trust and then verifying what’s said.

“In your profession the word trust should be shoved down the toilet,” Antar said.

White-collar criminals are self-confident and make friends with auditors, he said. They cooperate and provide requested information but distract auditors from doing their job, he said. “You can steal more with a smile than a gun,” he said.

Alonia Carey, a senior at Millsaps who is majoring in accounting, said she’ll remember Antar’s advice to maintain skepticism and “not just remember all the things you learned in the classroom.”

Antar’s stories about how he would wine and dine auditors and became their friends made an impression, said Anasa Bailey, a senior at Millsaps who is majoring in accounting. “You have to let business be business,” she said.

Brad Hatchett, a senior manager with KPMG, said fraud is a risk accountants are exposed to daily. KPMG has CPAs who specialize in uncovering fraud, he said.

Antar described how some of Crazy Eddie’s employees were paid off the books and the Antar family regularly skimmed thousands of dollars to reduce reported taxable income. When the company grew to have 1,000 employees, skimming became harder and was replaced by a money-laundering scheme to inflate same-store earnings and also inventory fraud.

The company went public in 1984, and Crazy Eddie’s reported income was adjusted higher to increase stock prices, so insiders could sell stock at inflated values, he said. Eventually, the fraud’s purpose became covering up previous frauds, he said.

At its peak, Crazy Eddie had 43 stores in four states and earned more than $300 million in sales.

Antar, who said he was making $300,000 annually when he was in his 20s, said he enjoyed distracting young auditors from their work. “I liked taking those students that came from the best schools and running circles around them,” he said.

Remaining members of the Antar family lost control of the company in a hostile takeover bid in 1987, and Antar said he was “coerced” to cooperate.

Sam Antar