TODAY'S PAPER
74° Good Evening
74° Good Evening
Business

Ex-con's advice to execs: Be paranoid

Former Crazy Eddie chief financial officer Sam Antar,

Former Crazy Eddie chief financial officer Sam Antar, who served six months of house arrest after pleading guilty to fraud charges, now offers his advice to business executives on white-collar crime. (Aug. 3, 2011) Photo Credit: Newsday/John Paraskevas

A convicted felon gave Long Island business and financial professionals something to think about Wednesday night.

Sam Antar, the former chief financial officer of the now-defunct Crazy Eddie electronics chain, spoke about his role in a series of accounting and security frauds the retailer committed, and offered his opinion on the psyche of the white-collar criminal. His talk was part of a networking event for business executives at The Chateau Caterers in Carle Place.

Crazy Eddie was an electronics retailer operated by the Antar family in the 1970s and 1980s. Known for their catchy commercials that ended in "his prices are insane!," the retailer had over 40 branch stores throughout the northeast before they were investigated for various frauds and taken over by stockholders. The business later went bankrupt.

Antar spoke openly and frankly about his experiences in the family business, taking credit for being the mastermind behind one of the biggest cases of accounting fraud in American history. "The Antars were an organized crime family without the guns," he said.

Several lawsuits from the Securities and Exchange Commission and investors were brought against the Antar family in the wake of the company's fall. Antar entered into a plea agreement with authorities, pleading guilty to committing fraud and was sentenced to 6 months of house arrest. His cousin Eddie, the chief executive, was later convicted and spent 6 years in prison.

When Sam Antar was 14 years old, he started working as a stock boy at Crazy Eddie. Eventually, he was sent to college to earn an accounting degree. He came back CPA certified, and launched a plan to take the company public.

As a private operation, Antar said, Crazy Eddie underreported their taxable income and paid employees under the table. After going public, Antar started skimming less income from the stores, creating the false impression that the company was making huge profits -- which in turn inflated their stock value.

Antar's advice to business professionals was simple: be paranoid. "You have to have a level of cynicism and skepticism," he said. "You have to learn about professional paranoia. You have to learn not to trust so much, but to just verify."

Members of the audience had mixed reactions to Antar's blunt manner of speaking about Crazy Eddie's operations, and during the question-and-answer session several individuals challenged Antar's views on morality. One woman called him a sociopath -- and Antar agreed with the assessment.

"It amazes me that entire family can be of that same caliber," said Steven Connolly, the owner of Co-Source Solutions in Melville, which matches financial professionals with businesses. "It's kind of sad too, because it seemed like they had a pretty good marketing scheme . . . Maybe if they had planned a business with a purpose of putting together a legal profit, they could've been successful as well."

More news