What Indicted SAC Capital Portfolio Manager Mathew Martoma Can Learn from Crazy Eddie

Back in March 1989, I faced an agonizing decision: Either cooperate with the F.B.I. and S.E.C. investigations of fraud at Crazy Eddie or spend a long time in prison behind bars. Likewise, former SAC Capital Advisors portfolio manager Mathew Martoma faces a similar important decision: Either cooperate with federal investigations of alleged illegal insider trading at SAC Capital or risk a long prison term. At the time I made my decision, I was married with three young children. Martoma is married with three young children too. We both had larger than life bosses who pressured us with unreasonable demands (me: my cousin Eddie Antar, Martoma: Steven A. Cohen).

Mathew Martoma and his wife after indictment

Facing an imminent indictment and a long prison term behind bars, I chose to cooperate with government investigators and turn in my cousin Eddie Antar and other relatives who ran our 18 year old criminal enterprise. Today, Mathew Martoma faces the same pressure I experienced back in 1989.

Apparently, federal investigators believe that Mathew Martoma is guilty of participating in an illegal insider trading scheme and can implicate his former boss, Steven Cohen as the driving force behind the alleged crime. According to the Wall Street Journal:

As federal agents pressed Mathew Martoma late last year to turn against his former boss, hedge-fund billionaire Steven A. Cohen, he fainted in the front yard of his Florida home.

"It was an upsetting experience," Charles Stillman, Mr. Martoma's lawyer, when asked about the incident. [Emphasis added.]

On December 21, 2012, Mathew Martoma was indicted for allegedly using information to illegally help SAC Capital profit from trades in certain publicly traded companies. According to the New York Times:

A federal grand jury in Manhattan indicted the former portfolio manager, Mathew Martoma, a month after the government arrested him on charges that he used inside tips about a clinical drug trial to help SAC earn profits and avoid losses. Prosecutors said the total benefit to SAC was $276 million.

SAC, based in Stamford, Conn., has been touched by several insider trading cases in recent years, but there is heightened attention surrounding the Martoma prosecution. For the first time, the government has tied questionable trades to Steven A. Cohen, the billionaire owner of SAC. [Emphasis added.]

Steven Cohen

My crimes were far worse than those alleged in the indictment against Martoma. I helped mastermind a scheme that defrauded investors and creditors of over $500 million and my crimes left over 3,000 people unemployed.

So far, Mathew Martoma maintains his innocence and has turned down cooperating with federal investigators. Martoma faces arraignment on January 3, 2013. His chances at beating the rap are slim. Over 90% of federal indictments result either in a trial conviction or guilty plea by the Defendant. Manhattan U.S. Attorney Preet Bharara has a perfect record tallying over seventy convictions with no acquittals in the massive ongoing federal insider trading probe.

If Mathew Martoma is in fact guilty as the indictment alleges and if he can implicate his former boss Steven Cohen, then time is running out for him to make a decision to cooperate with federal investigators. Potentially, if someone else comes forward and implicates Cohen before Martoma, he risks losing his best chance at avoiding a long prison term, because his value as a key witness would be diminished.

According to Fox Business, Mathew Martoma’s attorneys are charging over $1,000 per hour for legal fees and his former employer is footing the bill. That fact may provide a powerful incentive for Martoma not to cooperate with federal investigators. Likewise, for two years after being ousted from Crazy Eddie, my former boss Eddie Antar funded much of my legal fees as I was battling federal investigators. Finally, in 1989, I hired new attorneys who were not paid by my former employer and decided to cooperate with federal investigators.

My new lawyers, Anthony R. Mautone and Jonathan D. Warner advised me to come clean with the feds. I learned from them that quick timing and valuable information was the key to my future freedom. They told me that my duty to my wife and three children was more important than my loyalty to my cousin Eddie Antar and his immediate family.

Ultimately, the information that I provided federal investigators helped me avoid prison. I pleaded guilty to three felonies which carried a potential fifteen year prison sentence. Despite a much more lenient jail sentence recommended by former United States Attorney Michael Chertoff, Judge Nicholas H. Politan went even further and sentenced me to only six months of house arrest. In addition, Politan sentenced me to 1,200 hours of community service and I paid nominal fines and penalties totaling only $30,000. In my settlement with the victims of my crimes, I avoided all civil liability. I was able to avoid harsh punishment due to my extensive cooperation with federal investigators and lawyers representing victims of my crimes.

If the allegations in the indictment are true, Mathew Martoma’s only value to federal investigators is the potential information he can provide them about suspected illegal activities by his former boss Steven Cohen and others. Mathew Martoma has a lot of thinking to do and he’d better do it fast, because timing is running out. If he's convicted of the crimes alleged in his indictment, he faces up to twenty years in prison and I doubt that the feds will show him any mercy and give him any leniency.

Written by:

Sam E. Antar

Photo credits

NY Post: Mathew Martoma with his wife after indictment

Marketfolly: Steven Cohen

Disclosure

I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped my cousin Eddie Antar and other members of his family mastermind one of the largest securities frauds uncovered during the 1980's. I committed my crimes in cold-blood for fun and profit, and simply because I could. If it weren't for the heroic efforts of the FBI, SEC, Postal Inspector's Office, US Attorney's Office, and class action plaintiff's lawyers who investigated, prosecuted, and sued me, I would still be the criminal CFO of Crazy Eddie today.

There is a saying, "It takes one to know one." Today, I work very closely with the FBI, IRS, SEC, Justice Department, and other federal and state law enforcement agencies in training them to identify and catch white-collar criminals. Often, I refer cases to them as an independent whistleblower. I teach white-collar crime classes for various government entities, professional organizations, businesses, and colleges and universities. More recently, I've helped the AICPA Fraud Task Force develop better methods for detecting fraud. I do not want or seek forgiveness for my vicious crimes from my victims. My past sins are unforgivable.

Reuters on FBI Efforts to Profile White-Collar Criminals

Matthew Goldstein from Reuters wrote a fascinating article "Special Report: From Hannibal Lecter to Bernie Madoff" about FBI efforts to profile white-collar criminals (PDF link, video link).

(Reuters) - Bernard Madoff -- the architect of history's biggest Ponzi scheme -- and Gary Ridgway - the Green River killer -- would seem to have little in common aside from being branded as "monsters" in the tabloids.

But a team of FBI agents, the same ones who specialize in helping local police track down serial killers like Ridgway, are using their expertise in behavioral profiling to target white collar criminals like Madoff.

For about two years now, agents with the Federal Bureau of Investigation's Behavioral Analysis Unit have been consulting with their colleagues in New York who specialize in securities fraud detective work. The BAU agents are going over the case files put together by the FBI for Madoff and other convicted scammers like Bayou Group's Samuel Israel, whose $400 million hedge fund turned out to be Ponzi scheme, and former Democratic fundraiser Hassan Nemazee, who stole nearly $300 million from Citigroup and two other big banks.

The hope is the BAU agents, whose work in profiling serial killers has been popularized in books, movies and on TV, can get into the minds' of fraudsters and see what makes them tick.

In cinematic terms, substitute Gordon Gekko, the insider trader in "Wall Street," for Hannibal Lecter, the cannibalistic serial killer in The Silence of the Lambs, and you get an idea of what the FBI is trying to do.

I was interviewed by Reuters for this article and explained that while I am a fan of FBI efforts to profile white-collar criminals, it won't be an easy task for them.

In a recent interview, Antar told Reuters that FBI profilers are right to be wary of putting too much stock into interviews with white collar felons because they'll often say what a questioner wants to hear. In his view, once people become a scamster it's hard for them to ever really change.

"People like to ask me if I am redeemed," said Antar. "I like to say that I am possibly retired. The only reason I stopped was because I got caught."

Most white-collar criminals are very clever in evading detection by law enforcement and avoiding skepticism from their their victims. They build walls of false integrity around themselves to increase the comfort level of their victims. According to various studies conducted by the Association of Fraud Examiners (ACFE), over 90% of white-collar criminals don't have previous criminal records (see page 69). The higher the economic value of the crime, the less likely it is that the perpetrator had a previous criminal record.

Additional insights into white-collar criminals can be found in the Reuters video interview clip below (Interviewer Jen Rogers):



Hopefully, the study of criminology won't be limited to the FBI, other law enforcement agencies and a few academics. I'd like to see all colleges and universities require every student take at least one course in criminology. Criminals know much more about exploiting human nature than society knows about how they do it.

Written by:

Sam E. Antar

Reaction to Reuters Article

Clinical Forensic Psychology - Criminal Profiling: From Hannibal Lecter to Bernie Madoff by Patricia Zapf

Fraud Files - Implied credibility given to white collar criminals (and others!) by Tracy Coenen

Keep Your Eye on Fraud - Profiling Today’s White Collar Criminal by the FBI – Voodoo Law Enforcement? by Bruno Pavlicek

Daily Speculations - Profiling Ponzi-ists, from Pitt T. Maner III


Disclosure

I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped my cousin Eddie Antar and other members of his family mastermind one of the largest securities frauds uncovered during the 1980's. I committed my crimes in cold-blood for fun and profit, and simply because I could.

If it weren't for the heroic efforts of the FBI, SEC, Postal Inspector's Office, US Attorney's Office, and class action plaintiff's lawyers who investigated, prosecuted, and sued me, I would still be the criminal CFO of Crazy Eddie today.

There is a saying, "It takes one to know one." Today, I work very closely with the FBI, IRS, SEC, Justice Department, and other federal and state law enforcement agencies in training them to identify and catch white-collar criminals. Often, I refer cases to them as an independent whistleblower. I teach about white-collar crime for professional organizations, businesses, and colleges and universities.

Recently, I exposed GAAP violations by Overstock.com which caused the company to restate its financial reports for the third time in three years. The SEC is now investigating Overstock.com and its CEO Patrick Byrne for securities law violations (Details here, here, and here).

I do not seek or want forgiveness for my vicious crimes from my victims. I plan on frying in hell with other white-collar criminals for a very long time.

I do not own any Overstock.com securities long or short. My investigation of this company is a freebie for securities regulators to try to get me into heaven, though I doubt I will ever get there. My past sins are unforgivable.

Government Accounting Makes Crazy Eddie's Numbers Look Sane

I should have been a politician instead of a white-collar criminal. I could have lied to my victims legally and avoided prosecution for my crimes. Today, I appeared on Fox Business Network's Varney & Co. and discussed our government's accounting tricks.



Received great reviews from viewers, too.

Viewers want me back on

Written by:

Sam E. Antar


Disclosure

I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped my cousin Eddie Antar and other members of his family mastermind one of the largest securities frauds uncovered during the 1980's. I committed my crimes in cold-blood for fun and profit, and simply because I could.

If it weren't for the heroic efforts of the FBI, SEC, Postal Inspector's Office, US Attorney's Office, and class action plaintiff's lawyers who investigated, prosecuted, and sued me, I would still be the criminal CFO of Crazy Eddie today.

There is a saying, "It takes one to know one." Today, I work very closely with the FBI, IRS, SEC, Justice Department, and other federal and state law enforcement agencies in training them to identify and catch white-collar criminals. Often, I refer cases to them as an independent whistleblower. I teach about white-collar crime for professional organizations, businesses, and colleges and universities.

Recently, I exposed GAAP violations by Overstock.com which caused the company to restate its financial reports for the third time in three years. The SEC is now investigating Overstock.com and its CEO Patrick Byrne for securities law violations (Details here, here, and here).

I do not seek or want forgiveness for my vicious crimes from my victims. I plan on frying in hell with other white-collar criminals for a very long time.

I do not own any Overstock.com securities long or short. My investigation of this company is a freebie for securities regulators to try to get me into heaven, though I doubt I will ever get there. My past sins are unforgivable.

Will KPMG Ever Wake Up and Finally Learn Its Lesson after Being Duped into Completing Crazy Eddie’s Audits Too Early Twenty Three Years Ago?

Sometimes I wonder what it will take for major accounting firms like KPMG to finally wake up and learn the lesson of how criminal management teams dupe them into signing off on clean audit opinions before completing the field work, just as I did as the criminal CFO of Crazy Eddie back in the day.

KPMG cited by British authorities for prematurely signing off on audits

Recently, Adam Jones of the Financial Times reported that KPMG was “rapped for signing off on audits” before the completion of field work by the United Kingdom’s Financial Reporting Council:

KMPG has been rapped over the knuckles by the accounting watchdog for signing off on audits before all necessary work had been completed.

The criticism was made by the Financial Reporting Council as it told Deloitte, Ernst & Young, KMPG and PwC, the four biggest auditors, to do more to avoid conflicts of interest and be more sceptical of management claims.

The annual evaluations of the Big Four auditors comes amid increased regulatory scrutiny of the profession and its role in the financial crisis.

In the case of KPMG, the FRC’s Audit Inspection Unit looked at 15 audits and found that in three cases the auditor’s report had been signed too soon. Significant changes were subsequently made to the accounts in one case.

Paul George, director of auditing at the FRC’s Professional Oversight Board, which includes the AIU, said the early sign-off problem was not limited to KPMG: “It is a profession-wide challenge to some degree.”

KPMG said it accepted the AIU’s comments. “We are pleased to note that in no case did they think that the audit opinion we issued was incorrect,” said Oliver Tant, head of its UK audit arm.

The next day, popular Going Concern blogger Caleb Newquist was cynical of Oliver Tant’s remarks attempting to minimize the gravity of his firm’s negligence:

Okay, sure signing off early on 20% of the audits sampled sorta looks bad but at least the numbers weren’t wrong. It would be really awkward to explain that. 

KPMG was plain lucky that no audit opinions had to be changed as a result of their negligence. Back in my criminal days as main architect of the Crazy Eddie fraud, KPMG was not so lucky. If KPMG had taken the time to properly complete its filed work, they would have uncovered Crazy Eddie’s massive fraud.

How I duped KPMG back in my criminal days

In the hope of providing a wake up lesson to accounting firms like KPMG, below is my story about how I was able to dupe them into certifying Crazy Eddie’s financial reports before the completion of field work and giving Crazy Eddie a clean audit opinion in fiscal year 1987.

1987 was a year of desperation at Crazy Eddie

From the early 1970’s to 1984, Crazy Eddie was a profitable private company. Our frauds were focused primarily on understating our profits by skimming cash to commit income tax evasion and steal sales taxes.

In 1984, Crazy Eddie hired Main Hurdman as its auditors because we needed a large accounting firm to add a false sense of credibility to our financial reporting. In 1987, Main Hurdman merged with another large accounting firm Peat Marwick and was called Peat Marwick Main (PMM). Today, Main Hurdman and Peat Marwick are the US audit partners of large international accounting firm KPMG They are the “P” and “M” in KPMG.
 

As a public company from 1984 to 1986, our frauds concentrated on inflating profits or overstating income to help certain members of the Antar family ultimately sell about $100 million in stock at inflated prices.

However, in 1987, Crazy Eddie started losing money for the first time in almost two decades because of increased competition and a steep decline in consumer electronic prices which reduced revenues. We resorted to desperate measures to report profits instead of losses.

Fraudulently increasing the value of assets like inventories and fraudulently decreasing liabilities such as accounts payable or amounts owed to vendors inflates reported income or understates reported losses. We fraudulently inflated our inventories by approximately $30 million, but that feat was still not enough to avoid reporting massive losses. Therefore, we conceived of a plan to generate $20 million in phony debit memos which were supposed to be charge backs or offsets against amounts owed to vendors for such items as advertising rebates, volume discounts, and other reimbursements due the company. Those phony debit memos helped us show smaller accounts payable balances or lower amounts owed to vendors on our books and records.

Our accounts payable was only $70 million. Therefore, reducing our reported accounts payable by almost 30% through the issuance of $20 million in phony debit memos was a huge undertaking and we risked scrutiny of those debit memo from our auditors. However, we were desperately trying to cover up massive losses in 1987.

We needed to keep KPMG on a very short string

The lesser the amount of  time that KPMG (at that time called Peat Marwick Main) had available to audit Crazy Eddie’s books and records, the  easier it was for us to dupe them into issuing clean audit opinions on our falsified financial reports. It was my job to make sure that KPMG did not have enough time to properly complete its audit field work and appropriately examine Crazy Eddie’s books and records.

To accommodate Crazy Eddie’s management, KPMG regularly signed off on its audits about 60 days after our fiscal year ended. For example, in the fiscal year ended March 3, 1985, KPMG signed off on Crazy Eddie’s audit on May 2, 1985. KPMG signed off on Crazy Eddie’s fiscal year ended March 2, 1986 audit on May 1, 1986. Likewise, we hoped that KPMG would sign off on Crazy Eddie’s audit for the fiscal year ended March 1, 1987 on April 30, 1987 in following previous year’s practices.

Ultimately, I was successful in pressuring KPMG to sign off on Crazy Eddie’s 1987 audit on April 28, two days earlier than expected, despite the fact that major audit work was incomplete!

Note: Crazy Eddie’s fiscal year ended on the first Sunday in March which explains the difference in dates for the end of fiscal year’s 1985, 1986, and 1987.

Crazy Eddie’s audit was expected to last about eight weeks and KPMG planned to complete its field work in regular increments during that period. For example, by the sixth week (of eight), KPMG expected to have about 75% of its field work completed and 25% of its work left to do.

My job was to stall KMPG into having only 25% of its field work completed by week six and having 75% of its work left to do during the remaining two weeks of the eight week audit. Thus, KPMG had to do three times the usual amount of field work in the remaining two weeks. To get the work done and satisfy Crazy Eddie’s management, KPMG would skimp on certain key procedures. The plan worked!

Understanding the human frailties of auditors and taking advantage of them

As a general practice, most large accounting firms use relatively inexperienced kids right out of college to do much of the basic audit leg work. They are supervised by slightly more experienced senior auditors who unfortunately depend on feedback from these inexperienced kids in making informed decisions on the conduct of the audit. During the 1980s, both these kids and their supervisors were mostly young single males between the ages of 22 and 29.

As a 28 year old CPA myself, I understood that audits are very boring, tedious, and mundane for these young single male auditors. It was difficult for them to pay close attention to their work. It was relatively easy for me to distract them from performing their jobs without blaming me for stalling them or obstructing their audit work.

Photo from Going Concern blog

Rather than overtly obstructing our auditors’ field work, I engaged in a calculated plan to subtly distract them. I made sure that most of our auditor’s interactions were with cute Crazy Eddie female employees reporting to me, even if some of those females had no knowledge of our cooking the books.

I encouraged my female employees to flirt and get friendly with their young male KPMG counterparts and discuss audit issues with them over lunch and dinner on Crazy Eddie’s tab. Meanwhile, I spent much of my time taking certain higher level KPMG counterparts to pick up bars and other establishments frequented by good-looking women.

My female staffers provided the perfect distraction for KPMG auditors as they engaged in constant small talk and wasted precious time. By April 26, just a few days before the scheduled audit sign off, KPMG had not even started many key procedures and still had many unanswered questions.

Unanswered questions and unfinished audit work

In the previous fiscal year, 1986, we had falsified our store level inventories (not warehouse inventories) by $3 to $4 million. However, in fiscal year 1987, Crazy Eddie's store level inventories were inflated by $15 to $20 million as we desperately tried to cover up staggering losses.

In stores that existed in both 1986 and 1987, where the auditors observed inventory counts, those gross inventory levels increased from $21.95 million to $37.47 million or a staggering 71%, despite a huge drop in consumer electronic prices. On April 26, 1987, I was able to convince a certain audit partner not order a re-count of store inventories despite his questioning the unusual increase in store level inventories during a period of dropping prices.

Better yet, the audit test work on verifying the validity of $20 million of charge backs to vendors, which were actually phony debit memos, did not even start because of the effectiveness female employees in distracting the male auditors from doing their work. Moreover, the audit partner respected me as a responsive client and trusted me - a grave mistake.

In past years, I always gave in to his recommendations on being “conservative” and reducing reported income, even though I was only giving back the excesses of my inflated fraudulent numbers. I effectively played poker with a marked deck, giving back the cards I did not need. Therefore, I was able to convince that audit partner to sit on a board of directors meeting the next day on April 27, where the board approved Crazy Eddie’s numbers after questioning him and me.

On April 28, 1987, KPMG formally signed off on Crazy Eddie’s financial reports and issued a clean audit opinion, despite red flags in store inventory levels and uncompleted field work in verifying $70 million of accounts payable that was fraudulently reduced to $50 million by our issuance of $20 million in phony debit memos.

Taking advantage of the inexperience of our auditors

The audit staff member who was responsible for leg work on accounts payable had no prior experience in auditing accounts payable and only started working for KPMG six months earlier fresh out of college. He first learned about offsetting charge backs to vendors against amounts purportedly owed them or debit memos during the Crazy Eddie audit, much of it from me.

Since the audit was already officially completed, KPMG only examined the accounts payable or amounts owed by Crazy Eddie to three major vendors, out of thousands of possible vendors. Each of those three vendors reported significant discrepancies in amounts they claimed that Crazy Eddie owed them due to our issuance of phony charge backs to vendors or debit memos.

For example, Sony claimed that Crazy Eddie owed them about $5 million more than Crazy Eddie claimed it owed them because Sony never acknowledged receiving any such debit memos. The auditors never did any follow up contact with any of the companies, whose accounts payable balances they examined, concerning any discrepancies in amounts owed by Crazy Eddie.

On April 28, 1987, the inexperienced auditor finally started his test work on Sony (which contained about $5 million of the $20 million in phony debit memos), the very same day our auditors signed off on the audit according to his testimony in a sworn deposition.

The questions below were asked by Stephen Howard, Attorney from Milbank, Tweed, Hadley, & McCloy, who represented the Oppenheimer-Palmieri Fund, L.P., one of the major shareholders who in November 2007 took over Crazy Eddie in a hostile takeover:

Question: There’s a date at the bottom of the page which appears to be 4/28/87. Do you see that?

KPMG staffer: Yes, I do.

Question: Is that your handwriting.

KPMG staffer: Yes, it is.

Question: What does that signify?

KPMG staffer: It was my policy to date my workpapers when I began to perform test work.

Question: So that tells us you started this work on the 28th but it doesn’t tell us when you finished it?

KPMG staffer: That is correct.

In his other sworn testimony, young inexperienced auditor said that he continued his field work for more than one day, but couldn’t recall how many days it took for him to complete his work. In any case, KPMG already had signed off on Crazy Eddie’s audit.  KPMG had no incentive to do any additional significant field work that may cause them to change their audit opinion.
  
Key audit procedures missed

Crazy Eddie Antar mug shot after arrest

In previous years, we generated an accounts payable aging schedule for our auditors to review. That schedule provides detailed information about every invoice owed to vendors, any offsetting charge backs to vendors such as debit memos, and how long those items have remained outstanding.

However, for fiscal year 1987, we did not generate accounts payable aging analysis.  Therefore, our auditors were unable to determine the how long the phony debit memos were on Crazy Eddie's book and records and why, after the passage of time,  they were not used as an offset against payments to vendors.
  
In addition, the sheer volume of phony debit memos caused our books and records to show many vendors owing Crazy Eddie money, rather than the other way around! Those negative accounts payable balances were red flags that were never properly scrutinized by our auditors.

An excerpt from KPMG’s work papers said:

... traced all debit memos into A/P status report as of 03/01/87. No further work necessary.

An “A/P status report” simply lists all invoices owed to vendors and offsetting debit memos. Therefore, the debit memos were traced to a report listing the phony debit memo, in other words known as “garbage in, garbage out.” Our auditors simply traced the phony debit memos to the books and records that reflected them, but did no work to confirm the validity of those debit memos.

Weeks later, a senior staff member finally did conduct an interview of Crazy Eddie's Accounts Payable Manager (a female co-conspirator) and his work paper is dated May 22, 1987 or 24 days after KPMG issued its clean audit opinion of Crazy Eddie’s books and records.

Conclusion

KPMG may have dodged the bullet by not having to change any of its audit reports as a result of its recent failure in “signing off on audits before all necessary work had been completed.” If history is any guide, KPMG demonstratively failed to learn the lesson of their misdeeds during the Crazy Eddie audit. I wonder if they are at least better in covering up their mistakes this time around.

Written by,

Sam E. Antar

Disclosure

I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped my cousin Eddie Antar and other members of our family mastermind one of the largest securities frauds uncovered during the 1980's. I committed my crimes in cold-blood for fun and profit, and simply because I could.

If it weren't for the valiant efforts of the FBI, SEC, Postal Inspector's Office, US Attorney's Office, and class action plaintiff's lawyers who investigated, prosecuted, and sued me, I would still be the criminal CFO of Crazy Eddie today.

There is a saying, "It takes one to know one." Today, I work very closely with the FBI, IRS, SEC, Justice Department, and other federal and state law enforcement agencies in training them to identify and catch white-collar criminals. As an independent whistleblower, I often refer cases to them.

I do not seek or want forgiveness for my vicious crimes from my victims. I plan on frying in hell with other white-collar criminals for a very long time.

Hopefully, this blog post can get me into heaven, though I doubt I will ever get there.

My Life as a White-Collar Criminal

Last Friday evening, Marcia MacMillan from CTV News Channel (a 24-hour news network in Canada) interviewed me and asked me what it's like to be a white-collar criminal and what role, if any, did morality play in my decisions to commit crime. 

To view this video, please click on link here.

You can watch the interview by clicking on this link.

Reflecting on my own white-collar criminal mind leaves no doubt that money is not the only motivating force compelling hardcore criminals to commit crimes. There was also a passion for the act, a sense of accomplishment, that made me enjoy committing my crimes. It is perhaps the same positive feelings of success that law-abiding citizens experience for a legitimate job well-done.

To better understand the behavior of white-collar criminals, take morality out of the equation. During my years at Crazy Eddie, we never had a single conversation about the morality of our actions. We did not give a damn about right and wrong.

Hardcore criminals don't question their unethical and immoral conduct. Laws, morality, and ethics are weaknesses of other people. They don’t factor in except by limiting society’s behavior. In our society, morality dictates that people are entitled to the benefit of the doubt. Ironically, the “benefit of a doubt” limits the behavior of law-abiding citizens while giving criminals greater opportunity to commit their crimes. After all, no one likes to be called "a paranoid" or "impolite."

Our late President Ronald Reagan used to say "trust, but verify." That initial trust gives criminals the freedom to take steps to evade detection. For example, Joseph T. Wells, founder of the Association of Certified Fraud Examiners, described certain steps I took during Crazy Eddie's audit to successfully execute my crimes:

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 workpapers 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 all too often. That’s why the profession requires auditors to be skeptical.

I took advantage of our auditor’s initial trust of management and rigged their audit verification of our books and records. Crazy Eddie's auditors were unable to find any irregularities because we knew exactly what they were looking at. By the time they got around to verifying our financial reports it was too late because we cheated by taking countermeasures to evade detection of our crimes.

The lesson of the Crazy Eddie fraud is, “Don’t trust, just verify. Be very skeptical.” Learn to exercise “professional paranoia.”

Written by:

Sam E. Antar

Recommended reading on the psychology of white-collar criminals and steps that can be taken to catch them:

Forensic Accounting and Fraud Examination, 1st Edition by Mary-Jo Kranacher (York College, City University of New York), Richard Riley (West Virginia University), Joseph T. Wells (Association of Certified Fraud Examiners)

Disclosure:

I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped Eddie Antar and other members of his family mastermind one of the largest securities frauds uncovered during the 1980's. I committed my crimes in cold-blood for fun and profit, and simply because I could.

If it weren't for the efforts of the FBI, SEC, Postal Inspector's Office, US Attorney's Office, and class action plaintiff's lawyers who investigated, prosecuted, and sued me, I would still be the criminal CFO of Crazy Eddie today.

There is a saying, "It takes one to know one." Today, I work very closely with the FBI, IRS, SEC, Justice Department, and other federal and state law enforcement agencies in training them to identify and catch white-collar criminals.

Recently, I exposed financial reporting violations by Overstock.com (NASDAQ: OSTK) as an independent whistleblower which resulted in the company restating its financial reports for the third time in three years. The Securities and Exchange Commission is now investigating Overstock.com and its CEO Patrick Byrne for securities law violations (Details here, here, and here).

In addition, the SEC is now investigating possible GAAP violations by Bidz.com (NASDAQ: BIDZ) after I alerted them about the company's inventory accounting practices.

I do not own Overstock.com or Bidz.com securities long or short. My exposure of confirmed financial reporting violations by Overstock.com and possible financial reporting violations by Bidz.com was a freebie to securities regulators to get me into heaven, though I doubt that I will ever get there.

I do not seek or want forgiveness for my vicious crimes from my victims. I plan on frying in hell with other white-collar criminals for a very long time.

How White-Collar Criminals Exploit Your Vanity - Beware of Compliments

Artwork by Marta Dahlig

Last Friday, I was the key note speaker at the Oregon Health Care Fraud Working Group Training Seminar, sponsored by the United State Attorney's Office for the District of Oregon. I explained to the group that while emphasis on effective oversight and internal controls are important factors in preventing or deterring white-collar crime, not enough emphasis is given to the underlying psychology used by white-collar criminals to prey on their victims and effectively commit their crimes.

I have said many times that, "White-collar criminals consider your humanity as a weakness to be exploited in the execution of their crimes" and as the cold-blooded and ruthless criminal CFO of Crazy Eddie, I learned that you can steal far more with a smile than you can with a gun.

White-collar criminals use a combination of charm and deceit to achieve their objectives. The more likable and charming that I was as a criminal, the easier it was for me to successfully lie to my victims and deceive them. People are far less skeptical of people who they like and the white-collar criminals know it and exploit it.

Rabbi Dr. Abraham Joshua Twerski, author of several books and a psychiatrist specializing in substance-abuse, once said:

Self-esteem is based on the realization of one's capacities, of what can do. Vanity is the feeling that admiration and exaltation should be expressed for what one has done" 

Self-esteem is a positive character trait and unfortunately vanity helps build self-confidence and self-esteem. As a criminal, I took advantage of the vanity of my victims to make myself more likable to them, increase the likelihood that they would believe my lies. After all, who does not like a nice compliment, now and then?

For example, please watch the final scene of the movie "The Devil's Advocate," where Lucifer, played by Al Pacino, convinces attorney Kevin Lomax, played by Keanu Reeves, to do an exclusive newspaper story and afterwards, proudly exclaims "Vanity, definitely my favorite, sin." Link here.




Like Lucifer, vanity is the favorite sin of the white-collar criminal and vanity is part of everyone's humanity.

My friend Ilene Carrie (syndicated blogger, editor at Phil's Stock World, and attorney) attended the Oregon Health Care Fraud Working Group Training Seminar and interviewed me. Her article can be read here.

After attending the lecture and having dinner together, she wonders:

As the prisoner in The Lady and The Tiger conundrum, I’m left wondering whether Sam’s telling the truth, and he’s still a criminal, or lying and is really on the path to redemption.

I am sorry Ilene, but Antar does not give closure.

To the rest of you, beware of smiles and compliments. You never know the true intentions behind any person's charm.

I will never be able to get a date with anyone again, after this blog post!

Written by:

Sam E. Antar

Special thanks to the United State Attorney's Office for the District of Oregon, Tricia Leishman (Department of Justice) and Toni Slocum Regence (BlueCross Blue Shield). I donated my services and paid all travel, lodging etc. out of pocket as an accommodation to the Department of Justice.

Recommended Reading from my Blog:

12/28/08: A New Year’s Message from a Convicted Felon: While you hope, criminals prey

12/25/06: The Art of Spinning: How to Identify Possible White Collar Criminals or at Least Unethical and Deceitful People Who You Should Avoid

Recommended Art:

Marta Dahlig - All Genre Gallery

Marta Dahlig's blog

Disclosure:

I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped Eddie Antar and other members of his family mastermind one of the largest securities frauds uncovered during the 1980's. I committed my crimes in cold-blood for fun and profit, and simply because I could.

If it weren't for the efforts of the FBI, SEC, Postal Inspector's Office, US Attorney's Office, and class action plaintiff's lawyers who investigated, prosecuted, and sued me, I would still be the criminal CFO of Crazy Eddie today.

There is a saying, "It takes one to know one." Today, I work very closely with the FBI, IRS, SEC, Justice Department, and other federal and state law enforcement agencies in training them to identify and catch white-collar criminals.

Recently, I exposed financial reporting violations by Overstock.com (NASDAQ: OSTK) as an independent whistleblower. The Securities and Exchange Commission is investigating Overstock.com and its CEO Patrick Byrne for securities law violations (Details here, here, and here).

I do not own Overstock.com securities long or short. My exposure of financial reporting violations by Overstock.com was a freebie to securities regulators to get me into heaven, though I doubt that I will ever get there.

I do not seek or want forgiveness for my vicious crimes from my victims. I plan on frying in hell with other white-collar criminals for a very long time.

The Brutality of Non-violent Organized White-Collar Crime Groups

The most difficult crimes to deter, investigate, and prosecute are committed by organized crime groups who share the same race, religion, ethnic, and cultural backgrounds. The social cohesiveness of such criminal groups makes it relatively easy for them to coordinate their actions to effectively execute and cover up their crimes over long periods of time.

When most people think of organized crime, they think in terms of violent criminal groups such as the Mafia. However, not all organized crime groups use violence in the execution of their crimes.

Some of the most effective organized crime groups consist of white-collar criminals who do not use any violence at all. Such organized white-collar criminal groups can be found among primarily family based businesses, even after such businesses become public companies because their management is dominated by well coordinated and cohesive family members.

Members of the Antar family, myself included, who committed the Crazy Eddie fraud, used a combination of deceit, charm, and distraction to effectively commit our crimes over an 18 year period. While we didn’t kill people, we were just as brutal and caused just as much harm as if we were violent criminals by emptying the wallets of our victims. You can steal more with a smile than you can steal with a gun.

I was recently interviewed by Ilene Carrie (syndicated blogger, editor at Phil's Stock World, and attorney) about the Crazy Eddie fraud and the mind, motivations, and techniques of white-collar criminals. To read part 1 of this provocative interview entitled "No Redemption", please click here.

I warned her that by the time she finished the interview, I'd make her into a "paranoid schizophrenic" who would never trust another man again.

Written by:

Sam E. Antar

Special thanks to Phil Davis, fellow Seeking Alpha contributor and founder of Phil's Stock World for letting me share my views on white-collar crime with investors.

Recommended Reading

August 26, 2009: Jewish Daily Forward - ‘Crazy’ Eddie’s Cousin, a Former Fraudster, Speaks Out on Syrian ‘Subculture of Crime’ by Rebecca Dube

October 9, 2009: CNN.com - Financial fraud 101 -- Accounting for criminals by Kevin Voigt

March 9, 2010: Jr Deputy Accountant - The Wall of False Integrity Tour: Stanford (With Sam Antar) by Adrienne Gonzalez

May 3, 2010: Con Artist Hall of Infamy - Video clips of our interview with Sam Antar of Craaaazy Eddie! by Becca MacLaren

May 9, 2010: Simoleon Sense - GuestPost: Fraud Girl Interviews Convicted Financial Felon Sam Antar

May 23, 2010: Simoleone Sense - Guest Post: Fraud Girl “Learning From Frauds, Armstrong’s Denial, & The Body Language of Deceit”

Other featured interviews

Selling America Short: The SEC and Market Contrarians in the Age of Absurdity by Richard Sauer (Wiley 2010)

Disclosure

I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped Eddie Antar and other members of his family mastermind one of the largest securities frauds uncovered during the 1980's. I committed my crimes in cold-blood for fun and profit, and simply because I could.

If it weren't for the efforts of the FBI, SEC, Postal Inspector's Office, US Attorney's Office, and class action plaintiff's lawyers who investigated, prosecuted, and sued me, I would still be the criminal CFO of Crazy Eddie today.

There is a saying, "It takes one to know one." Today, I work very closely with the FBI, IRS, SEC, Justice Department, and other federal and state law enforcement agencies in training them to identify and catch white-collar criminals.

Recently, I exposed financial reporting violations by Overstock.com (NASDAQ: OSTK) as an independent whistleblower. The Securities and Exchange Commission is investigating Overstock.com and its CEO Patrick Byrne for securities law violations (Details here,  here, and here).

I do not own Overstock.com securities long or short. My exposure of financial reporting violations by Overstock.com was a freebie to securities regulators to get me into heaven, though I doubt that I will ever there.

I do not seek or want forgiveness for my vicious crimes from my victims. I plan on frying in hell with other white-collar criminals for a very long time.

The Real Reason Behind Danny DeVito’s Crazy Eddie Movie Project Meltdown from Eddie Antar’s Cousin and Criminal CFO Sam E. Antar

Deadline New York Photo: Danny DeVito

Updated: 05/03/10 at 12:08 AM on Bottom of Post: Added Blog Reactions

In an exclusive interview with Mike Fleming from Deadline New York, Producer and Director Danny DeVito whines about how problems in obtaining Eddie Antar's life rights essentially sunk his Crazy Eddie movie project. However, Danny DeVito does not tell the whole story to Mike Fleming.

Apparently, Danny DeVito wanted to do a story that glamorized Eddie Antar and portray him as some sort of misguided hero. As the other "main character" in our frauds, I will have no part of any production that is sympathetic to any character, including myself, for our heinous cold-blooded crimes.

In addition, DeVito has made a series of troubling comments to the press about how he apparently tried to side step defrauded thousands of investors who are owed hundreds of millions of dollars in civil judgments, while clearly showing his sympathy to Eddie Antar.

We deserve to rot in hell for our unforgivable crimes

Over the last twenty years, I have said publicly that as the criminal CFO of Crazy Eddie my crimes were pure evil and I deserve to fry in hell for my unforgivable sins. I've made no excuses for my criminal conduct. At Crazy Eddie, we committed our crimes for both fun and profit. We arrogantly committed our crimes simply because we could and we had no empathy whatsoever for any of our victims.

Crazy Eddie Antar

Danny Devito's slobbering love affair with Eddie Antar

Meanwhile, Danny DeVito seems to have a slobbering love affair with Eddie Antar, as he has tried to paint of sympathetic picture of my former boss and mentor.

In an April 2009 Variety article published when DeVito was still bullish about his Crazy Eddie movie project, he was quoted by Michael Fleming as saying:

He started as a guy who loved making deals more than money.

[Snip]

He lived an outrageously spectacular life and suffered an outrageously spectacular fall.

However, during the July 1993 Crazy Eddie criminal trial, former US Attorney Michael Chertoff accurately told jurors:

They say that blood is thicker than water. In this family money is thicker than blood.

Eddie Antar Wanted Poster

For Eddie Antar, money was in fact "thicker than blood." As the cover-up of our crimes unraveled, Eddie Antar skipped town with over a dozen phony passports and shipped his stolen loot overseas in multiple secret foreign bank accounts and safe deposit boxes. He cowardly left his family, including five young daughters behind.

When Eddie Antar was captured in Israel, he took the low road by still trying to escape responsibility for his crimes. Eddie tried to avoid extradition by citing Israel's "law of return" which is meant help Jews immigrate to Israel as a result of oppression and anti-Semitism in their native home countries and not to protect criminals like him. Ultimately, Eddie Antar was brought back to justice to face trial in the United States, kicking and scheming, as he was handcuffed and accompanied by US Marshals.

During the ensuing criminal and SEC civil trials, Eddie Antar and other members of his immediate family tried to lay the entire blame for the fraud on me and others who worked for them, despite the fact that they skimmed tens of millions of dollars from Crazy Eddie as private company and later made over $90 million selling stock at inflated prices to unsuspecting investors.

Eddie Antar simply loved money before his children, before his immediate family, before his other family members, and before everyone else. Howard Sirota, the former lead counsel for the victims of our crimes in the class action litigation against the Antar family, correctly told CNBC in July 2007, that Eddie Antar "is a sociopath."

Securities litigator Howard Sirota

It is simply an insult to our victims for Danny DeVito to even use the word "suffered" when it comes to Eddie Antar's self inflicted wounds, since our victims suffered far greater and irreversible losses as a result of our crimes.

In the recent Deadline New York article, Danny Devito continued to paint a sympathetic portrait of Eddie Antar:

DeVito said Antar was “hurt” by that news; he's got little else going on. “He’s gone through tough times, and he’s not the aggressive tough guy they paint him to be,” De Vito said.

[Snip]

...there is a family dynamic that isn't common knowledge and somewhat explains Antar's fall.

Danny Devito is clearly enamored by my con man cousin Eddie Antar. During a joint appearance with me on CNBC that was moderated by Herb Greenberg in July 2007, I confronted Eddie Antar about his flight from justice to escape responsibility to both his family and investors, who were defrauded by our crimes. See the exchange below:

Sam Antar: I fought for you like Crazy. Doing it for myself I fought. I stayed here and took the heat. You ran. You ran like a coward.

Eddie Antar: I am not a coward Sam.

Sam Antar: Yes, you left me out there hanging.

Eddie Antar: I didn't, I didn't leave.

Renee and Allen Antar still in denial

Sam Antar: You know something, you're not even a friend. You're just a thug. Just like me. A two bit thug.

As I detailed above, Eddie Antar is plainly still in denial about his cowardice towards his own family and investors.

There actually is a "family dynamic" that "explains Antar's fall" as DeVito claims. However, Eddie Antar and other members of his immediate family are simply unwilling to give a truthful account of what really happened at Crazy Eddie, while Danny Devito is willing to accept Eddie Antar's bullshit excuses for his vile behavior.

As recently as a couple of days ago, I received certain unsolicited and disparaging Facebook messages from Renee Antar, wife and cousin of Eddie Antar's brother Allen, and a long time friend of Eddie's still blaming me for all the Antar family crimes.

Danny Devito seems more sympathetic to Eddie Antar, rather than defrauded investors

As quoted above, Danny Devito claims that Eddie Antar's "....got little else going on." Perhaps, Eddie Antar should start by giving a full account of all of his stolen loot?

While federal investigators were able to recover over $90 million from Eddie Antar and other family members, several million dollars remain unaccounted for. For example, in November 2006, Eddie Antar claimed that he "donated" $6 million to an Israeli hospital. However, he received a kickback of $5.4 million in cash.

By spending a net sum of $600,000, Eddie Antar was able to save about $2 million in taxes and also place $5.4 million out of the reach of potential creditors, including defrauded investors.

While government investigators recovered a few million dollars cash from Eddie Antar's safe deposit boxes, the hospital kickback money was never fully accounted for. The government does not know whether the money found in those safe deposit boxes originated from skimming before Crazy Eddie's initial public offering in 1984 or money from that hospital kickback scheme.

To make matters far worse, Eddie Antar and other investors of questionable character tried to privately peddle his life rights to a gullible Danny Devito when he has not fully accounted for his stolen loot and owes investors millions of dollar in judgments.

According to Deadline New York:

Pulling together life rights deals to make fact-based feature films can be insaaaaaaaaaaane. In fact, rights problems have essentially killed a feature film about the  ex-consumer electronics king who coined that phrase in manic commercials that fueled the 70s rise of Eddie Antar's Crazy Eddie store chain across the East Coast. Danny DeVito planned to direct and produce Crazy Eddie, but he said the project could not be made because of a life rights deal he made with Antar.

[Snip]

DeVito hopes to pick up the pieces of Crazy Eddie, a drama that was to be written by 21 scribe Peter Steinfeld, with both producing. Right now the project is in shambles, all because they included the subject in a rights deal so he'd tell his story.

[Snip]

“It was all going well until we got a call from some big-time lawyer who represented a lot of people who were hurt by Eddie,” DeVito said. “He painted him as the Bernie Madoff of his generation and said that if Eddie is involved in any way, we’re going to put liens on the movie. I didn’t like the sound of that at all. This put a big, wet blanket over the picture. What it boiled down to is, if Eddie is involved at all, then we’re in trouble.”

That "big-time lawyer" is Howard Sirota, lead counsel in the class action litigation who represented the defrauded victims of our crimes. While Bernie Madoff stole far more money and was more evil than Eddie Antar, at least Madoff thought about his family and did run away to escape justice. And if Devito did indeed paint Eddie in a remotely sympathetic light, it would be like sitting through a movie that glamorizes Bernie Madoff. You’d throw your popcorn at the screen!

DeVito seemed far more concerned with paying Eddie Antar for his life rights, rather than being concerned about recovering money for defrauded investors. In May 2009, Danny Devito told Fox Business Channel in referring to Eddie Antar's life rights:

There was a deal and that deal was terminated. Any script that is written, or movie produced, will be based on public domain events and information.

However, in April 2010, Devito backed away from his comments to Fox Business Channel in is exclusive interview with Deadline New York, saying:

I’m not sure there were papers signed, it was more, we’ll do this together and we won’t burn you.

As quoted above, first Danny Devito tells Fox Business Channel, "There was a deal and that deal was terminated" and now he claims that "I'm not sure there were papers signed...." Are DeVito and his investors still trying to bypass defrauded investors? Shouldn't they have known about Eddie Antar's unpaid judgments to investors? Danny DeVito showed that he is clearly more sympathetic to Eddie Antar, rather than thousands of defrauded investors by telling Eddie that "...we'll do this together and we won't burn you." Nice guy?

Danny DeVito clearly loves my con man cousin and I am a con man, too. However, I know plenty about white-collar crime. At least I have done something to educate others about white-collar crime, and most of my work is pro bono, while Eddie Antar has sat around doing nothing since leaving prison.

From 1998 to the middle of June 2009, I traveled across the entire country taking no fees and I spent several hundred thousand dollars paying all travel expenses out of pocket. I've done several hundred lectures on white-collar crime for the government, law enforcement, educational institutions, businesses, and professional organizations.

For example, I've lectured at the Department of Justice, FBI, IRS, Secret Service, Department of Defense, and other federal and state law enforcement agencies. I've taught at universities such as Stanford Business and Law Schools, major corporations, major accounting firms, and major professional organizations. I still do plenty of pro bono work for the federal government and others (Details here).

Corporate miscreant Patrick Byrne

As an independent whistleblower, I correctly identified GAAP violations and SEC disclosure violations by a scam company called Overstock.com (NASDAQ: OSTK) and lies to investors by its CEO Patrick Byrne (See: October 5, 2009: Crain's New York Business - Crazy Like a Fox by Aaron Elstein (Download). After I alerted the Securities and Exchange Commission, Overstock.com was forced to restate its financial reports to correct those GAAP violations and SEC disclosure violations that I correctly identified and reported on my blog (Details here).

Note: For additional information about my three year battle to make Overstock.com comply with GAAP and SEC disclosure rules, please read "Selling America Short: The SEC and Market Contrarians in the Age of Absurdity" by Richard Sauer (Wiley 2010).

I am working very closely with the FBI, IRS, SEC, Justice Department, and other law enforcement agencies in both training them to identify and catch white-collar criminals and assisting them in various investigations pro bono.

I doubt that I will ever make it out of hell and get into heaven under any circumstances and I do not seek or want forgiveness for my vicious crimes from my victims. Anything that I may do in helping law enforcement and others does not undo any of my heinous crimes.

The consequences of lies versus the consequences of truth

Crain's New York Business article about Sam E. Antar

If I learned any lesson from my criminal days at Crazy Eddie, it is that the consequences of lies are far worse than the consequences of telling the truth, no matter how evil the truth is.

From 1987 to 1989, I lied under oath to protect myself and other Antar family members involved in our crimes. Afterwards, I learned that a bitter Sam M. Antar, Eddie's own father, who was purged from the company due to a family dispute, paid off two witnesses to place the entire blame for the fraud on his son, me, and others allied with him. When I told Eddie Antar, my lifelong mentor and boss, that his own father set us up to take the fall, he distanced himself from me and started making plans to flee the country.

At that point, based on the advice of my criminal attorney Anthony R. Mautone and civil attorney Jonathan D. Warner, I decided to "cooperate" with the US Attorney's office, the FBI, the Securities and Exchange Commission, and lawyers representing each and every victim of our crimes in their respective investigations for two years without the benefit of any plea bargain agreement limiting criminal and civil exposure for my crimes. My civil attorney Jonathan Warner's work helped the US Attorney's office obtain a guilty plea from Abe Grinberg, one of Sam M. Antar cronies who lied to the government.

Despite my previous false testimony, I was the key witness in both the Crazy Eddie criminal trial in 1993 and the Securities and Exchange Commission's civil trial that was prosecuted in 1998. In the criminal trial, Eddie Antar and his brother Mitchell Antar were convicted of numerous crimes, while his brother Allen Antar was acquitted. However, in the 1998 civil trial, Allen Antar, Sam M. Antar, and brother-in-law Ben Kuszer were convicted of civil fraud charges. Other Antar family members settled civil claims against them, rather than risk trials, and gave up most of their ill gotten gains.

Over a fifteen year period, the government and victim's lawyers recovered from the Antars more money than they made by selling Crazy Eddie stock to duped investors at inflated prices. The Antar family engaged in massive skimming before Crazy Eddie's became a public company and a substantial amount of those funds were recovered from secret foreign bank accounts, safe deposit boxes, and even money hidden in Sam M. Antar's ceiling.

As a result of my extensive cooperation with the government and victims of my crimes and taking into account that I "cooperated" with them for almost two years before obtaining a plea bargain agreement, the sentencing Judge rejected US Attorney Michael Chertoff's recommendation for jail time and instead sentenced me to only six-months of house arrest, 1,200 hours of community service, and nominal fines. All attorneys representing the victims of my crimes agreed to give me a complete walk from any civil liabilities.

Unlike Eddie Antar and other members of his immediate family, I make no excuses for my criminal conduct. Nor should I receive any praise for my cooperation with the government and defrauded investors. I cooperated with the government and victims simply to save my own rear end, avoid prison, and avoid civil penalties for my crimes.

Neither morality nor any sense of sympathy for my victims played any role in my decision to cooperate and take responsibility for my crimes. If the government did not investigate and prosecute me, I would still be the criminal CFO of Crazy Eddie today. If Sam M. Antar did not set up me and Eddie to take the fall for everyone's crimes and Eddie did not later abandon me, I would have never cooperated with the government or victims in investigating and prosecuting our crimes.

Will there be a Crazy Eddie movie?

The short answer is yes. Recently, I signed a contract with producer Robert Green and his east coast partner from New York for a planned Crazy Eddie motion picture production. I'm in talks with what is known in the film industry as an A-List screenwriter and will be taking the story out to studios.

They are dealing with me because they know that I have told the truth about my crimes even though it portrays me as a cruel, heartless, and cold-blooded crook, just like Eddie Antar and other family members. They don't want to talk to a scumbag in denial like my cousin and former lifelong mentor Eddie Antar.

In addition, we have documentation about the Crazy Eddie frauds that is not available in the public domain. Simply put, I know where all the bodies are buried. I constructed and ran the scam 24/7 for 18 years. It was in my blood and a major part of my life.

My life rights are essential to any motion picture project because I was deeply involved in the Crazy Eddie fraud, I worked side-by-side with Eddie Antar in committing those frauds, I don't seek to glamorize any of our crimes, and I have already told the entire truth about what really happened at Crazy Eddie in every sordid detail.

Crain's New York Business Photo by Buck Ennis: Sam Antar

I will not sign over my life rights to any movie project that glamorizes any character involved in our crimes, including myself. In addition, Danny DeVito risks litigation from defrauded investors, from me, and other main characters, if he decides move forward with or without Eddie Antar. In other words, Eddie Antar's life rights are worthless and no movie can be made without my life rights, too.

A message for Danny DeVito

I have a message for Danny DeVito about his love affair with my sociopath cousin Eddie Antar. To borrow a line from Groucho Marx, "I love my cigars, too, but I take them out of my mouth once in a while." Don't get conned by Eddie's charm like others including his own family who have learned the hard way.

If I can give any compliment to my cousin Eddie Antar, his embittered father Sam M. Antar was much worse than he is, for setting both of us up to take the fall for everyone's crimes. At least, I do not pretend to be anything other than a cold-blooded criminal who enjoyed committing his crimes and had no empathy whatsoever for his victims. As I said, "The consequences of lies are far worse than the consequences of telling the truth, no matter how evil that truth is."

I will have much more to say about the new Crazy Eddie movie, soon.

Written by:

Sam E. Antar

For additional information on Crazy Eddie, please visit my White Collar Fraud website and watch video clip of Howard Sirota and me on Fox Business Channel.

Other blog reaction:

Jewish Week: A KO for Kelso by Adam Dickter

Pragmatism Refreshed: The Crazy Eddie's Movie by Chistopher Faille

Going Concern: The Crazy Eddie Movie Hits a Snag by Caleb Newquist

Please read my important disclosure below:

I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped Eddie Antar and other members of his family mastermind one of the largest securities frauds uncovered during the 1980's. I committed my crimes, simply because I could.

If it weren't for the efforts of the FBI, SEC, Postal Inspector's Office, US Attorney's Office, and class action plaintiff's lawyers who investigated, prosecuted, and sued me, I would still be the criminal CFO of Crazy Eddie today.

I do not own Overstock.com securities short or long. My research on Overstock.com and in particular its lying CEO Patrick Byrne is a freebie for securities regulators and the public in order to help me get into heaven, though I doubt that I will ever get there anyway. I plan on meeting corporate miscreants, such as fifth rate crooks like Patrick Byrne, in hell. In addition, I plan on meeting Eddie Antar, his father, and his brothers in hell, too.

I plan on frying in hell with all of them for a very long time.

To Bidz.com: Thank you for the subpoena and the check, too!

Memo to Bidz.com CEO David Zinberg:

As you can see by the enclosed picture, I gladly accepted a subpoena from Bidz.com to testify in a class action lawsuit alleging consumer fraud by your company.

My research on Bidz.com (NASDAQ: BIDZ) is a freebie for securities regulators to help me try to get into heaven for past crimes at Crazy Eddie, though I doubt I can ever make up for my past evil acts. My blog posts on Bidz.com's inventory disclosures caused the Securities and Exchange Commission to investigate your company.

Therefore, I thank you for the $44 witness check as a small reward for my efforts, since no one else has paid me to research or write about your company. In fact, when a person from my former office told me that your company was trying to serve me with a subpoena and the attached witness check, I quickly took the subway downtown to accept service and your check.

Kindest regards,

Sam E. Antar

Disclosure:

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. I pleaded guilty to three felonies.

I have no position in Bidz.com securities, long or short.