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No Redemption II

By Ilene

(Originally published at Phil's Stock World. Check back for a follow-up interview in Nov. 2017.)

Interview with Sam Antar

Crazy EddieSam Antar, former CFO of the criminal enterprise "Crazy Eddie," will tell you all about his crimes while insisting he will burn in Hell. He now teaches accountants, lawyers, and FBI agents about white-collar fraud and how to catch white-collar criminals. I met Sam in Portland, at his seminar for healthcare fraud investigators.

Sam opened his lecture by asking the audience, “Can anyone guess why I’m here?” A man in the audience suggested “because you got caught.” (That was the first correct answer in twelve years.) Sam, who was energetic and seemed to be enjoying himself, spoke of Crazy Eddie, fraud, and the investigators charged with bringing criminals to justice. Below, I've posted a summary of Sam's presentation followed by our interview and some background information.

1. Presentation

About fraud

All fraud is basically the same.  All fraud is personal in nature. It’s done on a one to one basis.  Your humanity, ethics, and sense of fairness are weaknesses that we – white collar criminals – seek to exploit.  We have no morality. The more likable and friendly we are, the easier it is for us to commit our crimes. We build walls of false integrity. You never know who the real person is behind a criminal’s carefully choreographed wall of false integrity. Bernie Madoff had a wall of false integrity around him and the lawyers investigating him at the SEC were enamored by his status. That’s why they didn’t properly follow through on whistleblower Harry Markopolos’s tips about Madoff’s criminal activities.

Punishment does very little to prevent crime. It’s not a great deterrent. Criminals don’t stop because they see other people getting caught. While Bernie Madoff committed his crimes for almost two decades, he saw many other criminal get caught. Did that stop him?

When I cooperated with the government it was only to save my own skin. I only cooperated with the US Attorney’s Office, the FBI, the SEC, and lawyer representing victims of my crimes because I did not want to bend down to pick up a bar of soap and worry about who was going to be my boyfriend.

Fraud Triangle/Diamond

Criminologists have identified three common elements to all white collar crime: incentive, opportunity, and rationalization. It’s known as the fraud triangle. In recent years, capability was added as a common element of white collar crime and the fraud triangle was renamed the fraud diamond.

Incentive – People think white collar crime is primarily motivated by personal profit, and many times it is. However, personal profit is not always the primary reason why white collar criminals commit their crimes. Such crimes, in many cases, are motivated by power and loyalty within the criminal group. Money is important, don’t get me wrong, we’re not communists, but it isn’t everything.

In the family business type of organized fraud, the members of the criminal group share family, religious, ethnic, racial and cultural ties, such as in the Mafia and other organized crime groups. The criminal participants are not just bound together by money, but by their sociology. I was in a group like this. We felt intense family loyalty. This loyalty and quest for status within our tight-knit group was part of my incentive to act criminally.

Opportunity – The textbook answer is that the opportunity to commit white collar crimes is due to lack of internal controls, lack of checks and balances, and lack of effective oversight. What is missing from the standard textbook answer is YOU. Whatever makes you moral and ethical makes white collar criminals effective. Your morality and ethics limits your behavior, while giving the white collar criminal more flexibility and freedom to commit their crimes. The paradox we face is that the more humane our society is, the easier it is for criminals to commit crime.

For example, we don’t profile people in the U.S. No one wants to be accused of being a racist, bigot, or anti-Semite and the criminals know it and exploit society’s political correctness. We’d have to give up too many civil liberties and give the government far more powers to effectively fight white collar crime and the criminals know that too and exploit laws protecting civil liberties.

Capability – Intelligence without morality. For instance, I went to college to become a more effective crook. 95% of white collar criminals have no criminal records. The higher the monetary value of the crime, the less likely it is that the criminal will have a previous record.

Rationalization – Most people think that we have to rationalize our crimes. Not true. We know what we’re doing and simply do not care about our victims.

Question from the audience: “Why didn’t you care?”

I simply didn’t. Rationalization is for sissy criminals. You have to take the moral compass out of the equation to really understand criminal behavior.  Morality doesn’t exist in the criminal world, except it helps us when the other person has morality. We could be sociopaths, we knew what we were doing and didn’t care about hurting anyone. We didn't have any ethical or moral concerns.

Criminals know that people live on hope and it’s our job to exploit your hopes and dreams.

Question from the audience: “Did you plan this out?”

Of course we planned it out. Criminals control every aspect of the crime scene. We had all ends covered.

Right from the start, Eddie was skimming money, hiring family members and paying them off the books. We only stopped skimming to commit an even bigger crime – securities fraud.

We brought Crazy Eddie public to defraud the public. The entire empire was built on deceit.  Criminals are no different from you in how we plan our moves, except anything goes for us. The Crazy Eddie IPO was at $8 and the stock went up to $80, split adjusted.

In the five years before going public Crazy Eddie's reported income quadrupled due to our gradual reduction of skimming which increased our reported earnings. So the growth rate looked great for Crazy Eddie’s initial public offering to investors.

Once we went public, it didn't pay to skim money off the top. Instead we inflated our earnings by such methods as double counting inventory. Inflating earnings increased the market capitalization of Crazy Eddie and allowed our family, which owned most of the company’s stock, to sell shares at inflated prices.

Crazy Eddie wasn’t a discounter like we advertised. We were essentially a bait and switch operation. When we could not switch customers to higher profit margin products, we subsidized discounts by not paying sales taxes. We bought used and damaged merchandise and sold it as brand new. Eddie went to war against the big companies, he brought down fair trade. That made him a hero of the NYC metropolitan area consumer. However, Eddie Antar was no hero. His so-called discounting was a ruse, a wall of false integrity he built around his criminal empire.

Inventory fraud

Why didn’t the auditors count the boxes of inventory we lied about?  Think about it.  They come in wearing expensive suits. They feel too proud to be climbing on stacks of boxes counting inventory.  We knew they wouldn’t. We exploited their self-esteem. To quote Al Pacino playing Satan in the “Devil’s Advocate” movie, ‘Vanity is my favorite sin.’

We hardly ever obstructed our auditors, we just distracted them, like a magician in a magic show. To get the auditors to do what you want, it’s always better to give them things, like consulting work on the side, to corrode their skepticism.


To investigate a criminal enterprise, an investigator has to form alliances with some criminals to catch the bigger criminals – bigger fish. The most effective investigators seem to like the criminals on some level, they have a fascination with crime. If the investigator is repulsed by the criminals, he can’t communicate well with them and get the lower level criminal to help him catch the bigger fish.

A good investigator cannot be judgmental towards cooperating criminal witnesses. It’s a war of wits between the investigator and the cooperating criminal, but there’s also a bonding process that goes on.  I’m on good terms with all the investigators that went after me.

(Later, after the seminar.)

2. Interview

Ilene: Sam, what motivated you, and your family, to engage in the long list of crimes at Crazy Eddie?

Sam: We enjoyed being criminals, and enjoyed the money. We didn’t even need the money, just wanted more.

It started when the company, Crazy Eddie, was a private company in 1969. As a private company, there’s no need to boost income – you want to keep reported income low because you have to pay taxes on it.  So we skimmed money off the top.  If someone paid cash for an item, which was more common back then than it is now, we wouldn’t report it to the IRS.  By not declaring the income, we could avoid the sales tax and the income tax — we’d be way ahead.

As a public company, however, we had to do the opposite.  We wanted earnings so it would appear as though the company was growing quickly.  We wanted fictitious earnings.

Ilene: How do you create fictitious earnings?

Sam: Double counting inventory, overstating inventory, understating accounts payable, money laundering, and other methods.

Ilene: Did your auditors miss your accounting inaccuracies?

Sam: Public accountants that are sent out to audit public companies are typically young kids who do most of the leg work.  In those days, they were mostly guys in their twenties, say 22 years old to 26 years old, perhaps even 30 years old.  But basically younger guys.

I was a pimp and matchmaker for these guys, and would set them up with young girls to distract them and keep them busy.  You know, these guys think with their penises, not their heads.

You never tell an auditor they can’t have something. You just agree and don’t follow through.  It wasn’t hard to distract them from their audits by pairing them with girls — these guys are like Pavlov’s dogs – throw women in front of these guys and they are very distractible.

Ilene: Did the girls know what you were up to?

Sam: Some did, some didn’t.

As criminals, we use charm and deceit to get what we want. White collar crime is all about confidence. White collar criminals are con men, they need to gain the confidence of their victim. They do this by smiling and flattering the victims. Here’s a politically incorrect example. How many guys have told you how great you are in order to get favors from you?

Sam Antar and Crazy EddieIlene: I don’t know the number but you mean like romancing the victim?

Sam: Yes. Criminals use the same technique you see when a guy’s trying to pick up a girl. That’s how white collar criminals gain confidence – they’ll use flattery and tell many lies.

There are three "basic tactics" that white collar criminals use. First, we exploit your humanity and good intentions; those are your weaknesses. Second, we build a wall of false integrity around ourselves because we need you to trust us. And, third, we measure our effectiveness by your comfort level.

(Having spoken with Sam several times on the phone, I thought he seemed genuinely remorseful and was feeling comfortable with him, so when he added that by the time he was finished with me, I’d be a paranoid schizophrenic and never trust anyone, I thought he was just trying to shock me.)

I started working from Crazy Eddie when I was 14 years old. I was essentially trained, from day one, to be an effective criminal within the family business.

Ilene: Do you think your criminal nature is genetic or environmental, or a combination?

Sam: I don’t know about the genetics, but there’s certainly environmental factors involved. Members of my family are Sephardic Jews; we were a very cohesive group. My grandparents came to the United States in the early 1920s. They had been highly discriminated against in the past, in Syria, where my family is from.

We had to be insular to cope with the discrimination, and that helped build the culture of cohesion within our family. The same unity helped the community, the culture, survive living in Arab lands.

Likewise, organized crime groups commonly share the same social, ethnic and religious groupings. The members are bound together by religion and stature within the criminal group.

Ilene: Like the Mafia?

Sam:  Yes.

Ilene: But you didn’t kill people.

Sam: No, I didn’t kill people but I was just as brutal and caused just as much harm as if I did.

This was the life that I was brought up to be in, within an otherwise law-abiding community. However, in every tight-knit community there exists a criminal subculture that benefits from the cohesiveness of that community. The same cohesiveness that helped the community survive also helped the small criminal subculture within that community to be more effective and survive, too.

Social cohesion is like higher education, there are good sides of it, but education can be used for bad things, too. College helped me supplement my criminal ways so that I could become a better white collar criminal, with my acquired accounting skills.

Ilene: So your crimes grew progressively worse?

Sam:  Yes. Most mom and pop retailers skim money off the top – we were a family of merchants, and skimming was normal at the time. My cousin Eddie started the company, and in this new business, not declaring income to the IRS, was normal.

Criminals are no different from regular people in that criminal behavior starts small. To understand criminal behavior, you have to take the morality out of the equation.  Most people don’t prepare for failure. Like people don’t plan to go bankrupt, criminals also don’t prepare to get caught.

Skimming profits and cheating the IRS was a first step. Next was insurance fraud. So, for example, if someone stole a truck full of merchandise, we could report more merchandise stolen than was actually stolen to the insurance company. Who is going to believe the thief if he gets caught? Or if there was a flood that damaged some inventory, we could throw all the non-salable goods onto the damage list to increase our insurance proceeds.

Crazy Eddie functioned as a private company from 1969 to 1984. In 1980, we started preparing to go public. Our goal of minimizing profits switched to that of increasing profits and legitimatizing the company, "going legit." In effect, we committed securities fraud through the process of going legit by gradually reducing our skimming and increasing our reported profits.

Now, we wanted to show growth in earnings. Gradually and fraudulently, we reduced the amount of skimming to zero to inflate our growth rate. When we went public in 1984, our growth rate appeared much greater than it really was. By misrepresenting our growth in profits, we were committing securities fraud in addition to our other sins. We were portraying ourselves as a legitimate public company, until finally it all became unsustainable.

Ilene: What sort of frauds did you add to your list?

Sam: Money laundering to increase revenues and profits (the “Panama Pump”). Inflating inventories through fraudulent asset valuations. Timing differences to increase profits (accounts payable cut-off fraud). Concealing liabilities and expenses to increase profits (debit memo fraud). Improperly changing financial statement disclosures to cover up these crimes.

In effect, we were selling a bill of goods to investors. We didn't care and didn't feel badly about it.

Ilene: Do you feel badly about it now?

Sam: Well, I don’t give closure.

Ilene: Are you a sociopath?

Sam: No, but I think Eddie Antar may have been a sociopath.

Ilene: Are you still a criminal?

Sam: Let me give you an example, I'm like a drug addict in recovery.  An addict, even in recovery, is always an addict. Likewise, a convicted felon, like me, always has the same criminal mind, even if I’m not committing a crime.

The most effective drug counselors are addicts in recovery, who are helping other addicts to get off their addictions. I’m no different from a substance abuser. I have the same fascination with crime as I did before. It’s more fun and less risky to talk about crime than do it. But if I were to tell you I wasn’t a criminal today, should you believe me?

(The answer to that question is no, but I didn't say anything.)


3. Background Information 

Timeline of Crazy Eddie's evolution in crime:

(1) 1969-1979: Skimming and under reporting of income (tax fraud) prior to planning to go public

(2) 1980-1984: Gradual reduction of skimming to increase profit growth in preparation for initial public offering, known as committing securities fraud by "going legit."

(3) 1984-1987: As a public company, Crazy Eddie overstated income to help insiders sell stock at inflated prices until the enterprise came crashing down.

Reunion: Crazy Eddie Antar and His CFO/CPA Cousin Sam Antar Meet for first time in 30 Years



In "Straight Talk about Brutality of White Collar Crime from a Convicted Felon" Sam explains, "If you want to truly understand the brutal nature of white collar crime in all of its gory detail, please listen to my videotaped interview below that is featured on the Con Artist Hall of Infamy website." Videos courtesy of Becca MacLaren and the Con Artist Hall of Infamy. 

Sam Antar Interview, Part 1: The Rules of Criminality   

Sam Antar Interview, Part 2: Humanity, or the lack thereof


This interview was originally published at Phil’s Stock World in May, 2010.

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  1. No Redemption   II  – Loved the Antar articles   Inverse investing could be another tab.

  2. Hi Silentstorm: Sam, Phil and I are working towards something like that – so we can spot investment disopportunities – or say potential short sells/put buying opps.  - Ilene

  3. I know one of these guys very well. They are likable at first and always have a very good front that appears quite successful and straight. There are many "investments" intended only to remove money from one bank account and place it in another, from the get go. As a society, we actually "allow all of this to happen for the very same reasons we will allow another terrorist attack to take place in the US. We are so consumed in the false security of so-called personal freedoms that we are willing to allow such events to take place before we recognize we actually caused the problem with our over zealous naievity of perceived freedoms. Therefore we let criminals run rampant and basicly rape the populace and worse in the name of "Preserving Personal Freedoms". Few have the balls to stand up and say hey, "this is whacked!" In my personal view it is a clear sign of just how stupid the American people have become. So the question arises, do we deserve what we seem to demand? Apperently so.

  4. In a RE investment, myself and a friend invested 300K with one of these guys and formed an LLC to hold real property and develop it in 2003. 2 months later none of the intended purposes were taking place so I went to the office of the perpetrator and demanded to look at the books, which was a prerequisite in our LLC. He was very indignant, we almost came to fisticuffs, but I pushed him aside and went to the necesssary file cabinets and low and behold, the bank account was nearly empty of our 300K and no records of where it went except to himself and his wifes business. We immediately filed a suit as the DA would not prosecute although there was every evidence and reason to do so. We did get our money back and 10% interest, but not without a lot of grief and frustration. Our so-called legal system and our weeny society actually protects these kind of people for teh exact reasons I profess in the above posting. This is first hand not hear say experience. Madoff is exactly the same only a grander scale. Not long ago I ran into the crimianl at a restaurant and walked over to his table, looked him straight in the eye and said "one of these days I am going to piss on your grave, in fact I look forward to it" and I walked away with a smile on my face. Ha Ha Ha. Gotcha!

  5. How did we get our money back, you ask? He sold our interest to another investor which only lasted about 4 months and they bailed, then he sold their interest to another so-called investor . Each time the price of the investment went up and at last count our original 300K was sold for over 1.2M. Eventually it endedin a large law suit and the criminal actually ended up with some of teh intended property because the last investor did not   hhve teh  balls to fight him and didn’t like   being involved in such negative things? Say what??????? He actually took a 700K loss and walked away. Unbelievable, but 100% true.

  6. Sam also left out a key item that helps the criminals. Our legal system actually helps and empowers these folks. They use the legal system as a way to threaten the uniformed idiots. If you were to accuse them of wrongdoing or cast negative aspersions on their delings they threaten to sue you for defamation/slander/business interference and thereby use the legal system to counter any negatives(which may actually be factual) and scare people into submission. As you may have figured out, this tactic although successful previously for this guy was not successful with me. I found out after the fact that this is how he has made his living his entire life and still is. He jhas harmed a lot of people and walks free just like you and me. Amazing.

  7. As Phil would likely say….what a great country, freedom for everybody, even if they don’t deserve it and it cost you a fortune!

  8. Googer,

    Sorry you went through that.  And I’m glad you got your money back but it’s sad that someone at the end took such a huge loss on the deal.

    "Sam also left out a key item that helps the criminals. Our legal system actually helps and empowers these folks. They use the legal system as a way to threaten the uniformed idiots. If you were to accuse them of wrongdoing or cast negative aspersions on their delings they threaten to sue you for defamation/slander/business interference and thereby use the legal system to counter any negatives(which may actually be factual) and scare people into submission."

    I didn’t focus on this aspect, but Sam touched on our legal system enabling crime in context of political correctness and our not wanting to be accused of profiling or racism . Criminals knowing use this against us.  The second part you mention here is true and while Sam didn’t talk about it, I believe he experiences this in his efforts to provide factual information.  This would be something that short sellers in general may need to worry about when they discuss their views on a particular company they are shorting. 

  9. Actually these people are far more common than most of us want ot acknowledge. They are Sociopaths in the sense that they have no conscience but they are usually extreme control freaks and very smart as well. They get off on beating you or something like that? I recently told an SEC lawyer that they are "machiavellian sociopaths". She agreed that is a perfect description. I am also a plaintiff in an SEC suit being brought against a develpoment/construction co in a forced liquidation seizure of assets in the hundreds of millions. What a strange world we live in. The regulators act far too late, once all the damages are done. As far as short selling, I don’t think these kind of criminals have much affect on short selling. So far the markets still detrmine such events as the necessary function of shorting although I would not be surprised if this administation doesn’t outlaw shorting. I recently rode BP from 60 down to 38 and got out today for the balance of my PUTs. I have no idea why more people could not see what was going to happen to BP. It was obvious to me over a month ago. I posted about it several tiems at several places and most thought I was stupid? Yeh all the way to the bank in 6 figures. So people do some very stange things and somtimes we simply cannot figure out why?

  10. Ilene- You commented it was sad that one of the guys took a huge hit. But that was his conscious decision to let that happen. Just like we all let lots of things happen that we shouldn’t. If we would speak up and take action we would not be in this mess we are in now. I don’t just think that, I know that to be the only truth.

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