White Collar Fraud

The main pillar of our capitalist free market economic system, which is a cornerstone of our democracy, is the integrity of financial information. Without reliable financial information, capitalism cannot survive. The integrity of financial information can only be achieved through building blocks such as sound internal controls and independently verifiable financial information. The well educated, skilled, and experienced accountant is the first line of defense for the capitalist system.

Thursday, March 12, 2009

Understanding the Mind of Bernie Madoff

Understanding the mind of Bernie Madoff and how to prevent similar frauds from happening again.

Convicted felon David Alexander and I are inteviewed by Alexis Glick on the Fox Business Channel "Money for Breakfast" show.

Part 1:

What's going through Bernie Madoff's mind while committing fraud.

Part 2:

What can be done to prevent schemes like Madoff from happening again.

My other comments on Bernie Madoff and preventing similar crimes from happening again:

Conde Nast Portfolio - Preventing the Next Bernie Madoff by Gary Weiss

Breaking Madoff News - What Makes Bernie Madoff Tick: Inside the Criminal Mind of Sammy Antar by Deborah Strober

Cityfile New York - A Few Words from a Fellow Fraudster by Remy Stern

Written by:

Sam E. Antar (former Crazy Eddie CFO and a convicted felon)

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I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped Eddie Antar and other family members mastermind one of the largest securities frauds uncovered during the 1980s. My responsibilities at Crazy Eddie included skimming, money laundering, insurance fraud, securities fraud, and a list of other criminal activities too long to list here.

I eventually pleaded guilty to three felonies: conspiracy to commit securities fraud, conspiracy to commit mail and wire fraud, and obstruction of justice. I was sentenced to only six-month’s house arrest, 1,200 hours of community service, and paid approximately $10,000 in fines.

In my settlement with the Securities and Exchange Commission, I agreed to a lifetime bar from being an officer or director of a public company and paid $20,000 in disgorgement of losses that were avoided by selling my Crazy Eddie stock at inflated prices.

In my settlement with the victims of my crimes, I avoided all civil liability.

We committed our crimes at Crazy Eddie for fun and profit and simply because we could. We had no empathy whatsoever for our victims. During my sixteen years at Crazy Eddie and two years spent covering up our crimes after being terminated from the company, I never had a single conversation with any of my co-conspirators about morality or the suffering of our victims. Our conversations focused solely on the successful cold-blooded execution of our crimes.

I was the main witness in the Crazy Eddie criminal trial prosecuted by US Attorney’s Office in Newark, NJ, civil trial prosecuted by the Securities and Exchange Commission, and civil litigations brought against us by our victims.

I did not cooperate with the government and victims because of any sense of morality or remorse for my crimes. I simply cooperated with them to avoid a long prison sentence and reduce potential monetary penalties. If my crimes had remained undetected and the government did not seek to prosecute me, I would probably still be the criminal CFO of Crazy Eddie today.

Apologies for my crimes are irrelevant. It is my view that “apologies do not bring back the dead or undo the losses suffered by the victims of my crimes.” As I told Wall Street Journal reporter Herb Greenberg for his March 3, 2007 Wall Street Journal column entitled, “My Lunch with 2 Fraudsters: Food for Thought for Investors”:

I don't want to be held up on the pedestal of redemption. I would rather people learn from my vile, ugly and vicious crimes. It is most important that they understand the ugly nature of criminality. My life is a mistake of history.

There is a saying, "It takes one to know one."

I teach law enforcement, professionals, and students about white collar crime and how to catch corporate miscreants. I do not teach ethics. Rather, I teach about the immorality and unethical behavior of white collar criminals from my own experience. In addition, I recently started doing research on certain companies for my dear friend convicted felon turned fraud fighter Barry Minkow and his Fraud Discovery Institute.

In my blog, I expose white collar crooks just for the fun of it. In addition, I share my views about white collar crime, securities fraud, the accounting profession, internal controls, Sarbanes-Oxley, government corruption, and other related topics.

This blog is written, edited, and published by me and I take full responsibility for my views expressed in this blog. I am exercising my right to free speech afforded me under the Constitution of our great country.

© Copyright 2006 - 2009 Sam E. Antar. All rights reserved.

My advice to the accounting profession, antifraud professionals, and Wall Street:

Do not trust, just verify. Verify, verify, and verify.

White collar criminals build a wall of false integrity around them to gain the trust of their victims.

White collar criminals measure their effectiveness by the comfort level of their victims.

White collar criminals consider your humanity as a weakness to be exploited in the execution of their crimes.

White collar crime can be more brutal than violent crime, since white collar crime imposes a collective harm on society.

No criminal finds morality and stops committing crime simply because another criminal went to jail.

White Collar Fraud

Thursday, March 12, 2009

Understanding the Mind of Bernie Madoff

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