In BGSU talk, 'Crazy Eddie' figure backs better audits

10/5/2006

BOWLING GREEN - Sam Antar, an executive partly responsible for the $100 million Crazy Eddie Inc. stock fraud in the 1980s, is doing penance for his crime, part of which involves spreading the gospel of white-collar-crime prevention.

This week Antar is telling four Toledo-area audiences the business world needs better education for accountants and auditors, more independent audits, and better barriers to white-collar crime. The four-year-old Sarbanes-Oxley Act, intended to clean up corporate fraud, is just a beginning, he said.

"Our capitalistic system depends on the integrity of financial information," Antar told a classroom of graduate accounting students at Bowling Green State University yesterday. But, he cautioned them: "The word 'trust' is no longer in the dictionary. [For you] it's a professional hazard."

And he warned them they'd better be prepared to detect frauds committed by "the scum of the scum, like me."

Antar, 49, former chief financial officer of electronics-retailer Crazy Eddie and now a convicted felon, told The Blade, "The entire [accounting] profession is not being properly trained to detect white-collar crime."

Fewer than a third of 1,000 colleges offering accounting majors have fraud-detection courses, although BGSU does, and too few students are required to take the ones that are offered, he said.

He planned to encourage members of the area chapter of Financial Executives International to go beyond requirements in Sarbanes-Oxley, imposing more stringent internal controls to ensure that no more disasters like Enron and WorldCom occur.

Antar, who took responsibility for his actions, said it's uncertain exactly how much money was lost in the Crazy Eddie implosion. A firm that acquired the retailer discovered the inventory had been overstated by $80 million, he said.

His family sold stock for more than $90 million during a period when the company's stock-market valuation went from $40 million to about $600 million. Many investors lost money because of the cooked books, and there were other frauds, involving taxes and phony insurance claims, he said.

Investors got back roughly 30 cents on each dollar invested, he added.

His cousin Eddie Antar, chief executive of Crazy Eddie, served eight years in prison and repaid $77 million of his ill-gotten gains.

But Sam Antar avoided prison by making a deal to turn over information. He got six months of house arrest, did 1,200 hours of community service, repaid $20,000, and is in the process of repaying $60,000 more. He said he's now in the real-estate business, working with his wife's family in New York.

Contact Homer Brickey at:

homerbrickey@theblade.com

or 419-724-6129.