Interviews and Mentions
EXCLUSIVE: Entertainment One has set up Insane, a film based on the wild life of Eddie Antar, the late consumer electronics king who wound up serving six years in prison for perpetrating one of the greatest securities frauds in history. Peter Steinfeld, who wrote 21, has written the script and an exclusive rights deal has been made with Sam E. Antar, Eddie Antar’s criminal co-mastermind and cousin. eOne will finance. Greg Berlanti, Sarah Schechter, Peter Steinfeld, DeShawn Schneider, Mandy Stein will produce with Sam E. Antar serving as an Associate Producer.
“It’s like graffiti on the bathroom wall,” says ex-con-turned-fraud-consultant Sam Antar, who has gotten into a Twitter war of words with well-known short-seller Marc Cohodes over a disagreement about Overstock.com, a stock Cohodes is touting after previously betting against it.
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But it’s his about-face on Overstock that has infuriated Antar, the fraud consultant.
Shapiro noted in an email to II that Cohodes more recently concluded that the company was a good investment because of changes in its business model. “If anything, the sequence of events demonstrates Marc’s ability to fairly evaluate business models and not be weighed down by insults,” Shapiro wrote.
The upshot is a Twitter battle among Cohodes and a coterie of Overstock critics, including Antar, who is also his former friend.
Antar says he is most upset that Cohodes brought up the death of Antar’s son. On December 2 of last year, Cohodes tweeted, “I supported Sam when he needed me most during his son’s death. His behavior is awful.”
The tweet made Antar furious. “Invoking the memory of my son to disparage me is the most scummiest thing anybody could ever do, just to promote a stock position,” he says.
Cohodes’s lawyer sees it differently. “I and others were with Sam at Marc’s wedding party in September 2014, where Sam spoke to me and others about his loss, and also about how appreciative he was of Marc’s support,” Shapiro wrote in the email.
Antar says that isn’t true. “My son’s death was never mentioned at the wedding,” he says, claiming that’s because the wedding happened before his son died.* He continues to dispute the assertion that Cohodes was supportive. “I sat shiva; he wasn’t there. We had a memorial 30 days later, and he wasn’t there.”
*After this story was published, Antar produced emails and text messages indicating that the wedding party happened in September 2013, not 2014 — prior to his son’s death in October 2013 and contrary to what Shapiro told Institutional Investor. He said he realized he had misspoken when he originally told this publication that his son’s death was one year after the wedding and requested a correction to his quote, which has been made. Shapiro did not respond to an emailed request for comment.
July 16, 2018: Law360 – DOJ Should Encourage The Bid-Rigging Whistleblower, By Robert Connolly
Postscript: Sometimes overlooked is the fact that strong whistleblower incentives not only help uncover bid-rigging cartels but prevent them from forming in the first place. The Antitrust Division mentions how the possibility of leniency can prevent a cartel from forming because of fear that a cartel member may someday fold for leniency. Bid-rigging whistleblowers would be even a greater deterrent to cartel formation. This recent statement in the Wall Street Journal[15] from “Not as Crazy as He Used to Be ‘Crazy Eddie’” is instructive:
In the two decades I was deeply involved in the Crazy Eddie fraud, the only threat made us lose sleep at night was the possibility of a whistleblower blowing the lid on our crimes. Consistent studies by the Association of Certified Fraud Examiners have shown that most frauds are exposed by whistleblowers, far ahead of frauds exposed by any other source. The SEC will be handing a gift to white-collar criminals if it reduces whistleblower bounties.
—Sam E. Antar, former Crazy Eddie chief financial officer, former CPA, and convicted felon.
May 16, 2018: Institutional Investor – What Exactly Happened to David Einhorn?, By Michelle Celarier
Einhorn’s fixation on compliance around that time struck a chord with Sam Antar, a convicted felon and former CFO of Crazy Eddie, whose prior life has turned him into a fraud investigator. Antar says that in 2012 he met with Einhorn to discuss a company Greenlight was short at the time. “David was obsessed with compliance before going forward,” he recalls.
Sammy tried to cut a deal with the investigators. But there was one problem: they didn’t believe him, because he’d already lied to them repeatedly during earlier phases of the investigation. It took Sammy a long time to convince the feds that the information he was now giving them was the truth, and that the previous investigation had deliberately led them down the wrong path. Eddie Antar had by now skipped town and was living in Israel. Crazy Eddie itself was finally going down. The new management thought they could keep the company going, and even filed for Chapter 11 protection (a form of bankruptcy that would, if successful, have seen the company survive and reorganize), but by Christmas 1989 it appeared futile. Sales were down and the stores’ shelves were bare because suppliers didn’t want to do business with the tainted chain. The last Crazy Eddie stores closed for good at the end of 1989.
In June 1992, the law finally caught up with Eddie Antar, alias David Cohen. Sammy’s testimony, in part, helped investigators trace Eddie’s Israeli bank accounts and other ill-gotten gains. He was extradited to the United States in early 1993 to stand trial.
You couldn’t imagine that a story like this wouldn’t end with a courtroom scene. The Crazy Eddie criminal trial in summer 1993 didn’t disappoint. The courtroom was packed and there was a lot of drama. Eddie and his brothers who were also on trial tried to blame Sammy for the entire debacle. Over several days of sensational testimony, Sammy laid out what had gone on during the 1970s and 1980s, from insurance fraud to paying employees off the books, and finally to the large-scale fraud and stock pumping that ultimately wrung $80 million out of gullible stock investors.
But no one knew it at the time. Sammy had done his work well before 1984, but after the IPO, when he was now CFO of the company, he really shifted into high gear. He came up with several nefarious schemes to inflate earnings and keep shareholders happy, the boldness and audacity of which are almost unbelievable. Sam E. invented, for instance, the “Panama Pump”: taking some of those secret shekels from the Israeli bank accounts, they wired about $1.5 million to Panama, then converted the cash into non-negotiable financial instruments and used them to make payments to the Crazy Eddie company, which were reported falsely as retail sales.
Crazy Eddie was much more than a single crime or an isolated incident of financial fraud. It was a sprawling, multi-generational empire of highly organized deception, involving years of scams, millions of dollars, and a lot of interpersonal and international intrigue that was worthy of a spy novel. Both the boldness of the Antar family, who owned the chain in its heyday, and the gullibility of the rest of the world–particularly accountants and investors–are remarkable in their magnitude. The Crazy Eddie saga should be made into a movie. It would be billed as a true story, but probably no one would believe it.