Corporate Fraud Handbook, 5th Edition

CHAPTER 13Financial Statement Fraud Schemes

Case Study: That Way Lies Madness

“I'm Crazy Eddie!” a goggle‐eyed man screams from the television set, pulling at his face with his hands. “My prices are in‐sane!” Eddie Antar got into the electronics business in 1969, with a modest store called Sight and Sound. Less than 20 years later, he had become Crazy Eddie, a millionaire many times over and an international fugitive from justice. He was shrewd, daring, and self‐serving; he was obsessive and greedy. But he was hardly insane. A U.S. Attorney said, “He was not Crazy Eddie. He was Crooked Eddie.”

The man on the screen was not Eddie at all. The face so dutifully watched throughout New Jersey, New York, and Connecticut—that was an actor, hired to do a humiliating but effective characterization. The real Eddie Antar was not the kind of man to yell and rend his clothes. He was busy making money, and he was making a lot of it illegally. By the time his electronics empire folded, Antar and members of his family had distinguished themselves with a fraud of massive proportions, reaping more than $120 million. A senior official at the Securities and Exchange Commission quipped, “This may not be the biggest stock fraud of all time, but for outrageousness it is going to be very hard to beat.” The Securities and Exchange Commission (SEC) was joined by the FBI, the Postal Inspection Service, ...