All men hate the wretched; how, then, must I be hated, whom am miserable beyond all living things!
There’s a scene in the movie Splash
when the mermaid, played like a fish out of water by Darryl Hannah, wanders into Bloomingdale’s. Unsure about her new surroundings, the winsome blonde parks herself in front of a wall of television sets. A man’s face on 20 screens is raging while the mermaid tests the glass with her long, white fingers. "I’M INSANE!" the man yells. He rends his clothes. "HOW CAN I OFFER THESE PRICES?" His cheeks are inflamed. He’s gyrating his hands and whiplashing his neck. "BECAUSE I’M CRAZY EDDIE! I’M TOTALLY NUTS! I’M INSA-A-A-A-A-ANE!" The mermaid is frightened.
In his heyday Crazy Eddie became a fixture of the tri-state area, rivaled only by Lady Liberty herself for instant recognition. Everybody knew Crazy Eddie. Crazy Eddie’s Electronics Emporia commanded the market for stereos, CB radios, telephones, televisions, not to mention appliances and jewelry, plus the very latest in trendy gadgets, personal computers with 512 kilobytes of internal memory. Crazy Eddie’s Record and Tape Asylums housed acres of entertainment choices. If it ran electronically Eddie sold it for the cheapest prices known to man.
But Crazy Eddie was a fake. Literally. That face in the pixels belonged to a balding Irish actor named Jerry Carroll. The Eddie Antar monster was someone else entirely, a black-bearded misanthrope with an ego as large as his bankroll. Not to malign Carroll’s performance, but there was always a bit too much in Crazy Eddie’s histrionics. Somehow you knew that this guy wasn’t just some storeowner with a frustrated artist inside. Crazy Eddie commercials were more campy than Batman
reruns. He wasn’t insane, he was just goofy.
Eddie Antar, on the other hand, the real
Eddie . . . .
At 13 Eddie was cutting classes and spending his afternoons in shops around the Manhattan Port Authority Terminal, hawking T-shirts, home appliances, and cheap audio equipment. It was 1961. The air on 42nd Street hummed with traffic and herds of people, shouting, laughing, going places, looking for kitchen gadgets, love, and a decent knish for 15 cents. New Yorkers, and Americans in general, had never known such wealth as they were enjoying in the post-war boom, and Eddie plugged into this noisy energy. Every exchange sizzled in his hands. He saw each person stepping his way as his next chance to shine, the opening strains of a show in which Eddie danced, dazzled and, if necessary, harangued his customer into a purchase. If little Eddie Antar didn’t sell you something, you weren’t buying.
Eddie was hell-bent to conquer the world, or at least the strip of it running from Brooklyn to Manhattan. He styled himself a Lord of Flatbush, donning a black leather jacket and oiling his hair to make the thick locks shine like ebony. "Eddie was like . . . the Fonz," a companion recalled. After a good quarter-hour’s worth of combing, his head appeared to be crowned by rows of insulated wire. Like his father, Eddie wasn’t very tall; in fact, none of the Antar family stands above 5 feet 10. But Eddie lifted weights, talked tough, and backed it up with his fists if he had to. A swollen eye, puffed and purple, he displayed like a trophy. He gained a reputation for arranging back-alley deals and handling merchandise of questionable conveyance. One of the lawyers who later helped put Eddie in jail, a man named Howard Sirota, recalled, "I grew up in the same neighborhood as Eddie Antar, and I knew that he was a crook. I had friends who worked for him and who had done business with him. I knew who Eddie’s friends were. They were the guys in the neighborhood whom I tried to avoid."
If Eddie sparked fear and loathing on certain corners, others saw him as the inspired scion of an honorable clan. Eddie’s father, Sam M. Antar, had opened his first store at the age of 19. With a sandy complexion and a thick head of dark, curly hair, Sam was known for his rambunctious disposition. He stood about five feet seven inches, which combined with his ready smile to project a boyish air, a quality Sam would carry into his dotage.
Sam was the first Antar born in the U.S., after Murad and Terah Antar, Eddie’s grandparents, moved here from Aleppo, Syria. One of the world’s oldest cities, Aleppo was known for ages as the most important trading link between the Far and Middle East, a place where Jews like Murad and Terah worked in their market stalls alongside Arabs, Turks, and Egyptians. Murad Antar liked to remind his sons of a proverb: "An Aleppine can sell even a dried donkey skin."
It was no accident, then, that Sam Antar became a retailer and expected for his sons to follow him into the trade. New York’s Syrian community, which spread from 20th Avenue and 60th Street throughout the Bensonhurst area of Brooklyn, was filled with families who made their living in wholesaling, retailing, or reselling. Eventually the neighborhood became known as Aleppo-in-Flatbush, and its citizens were called S-Ys
(pronounced ess-wigh) for the first two letters in the word Syrian.
Syrian Jews were often treated harshly by New York’s Ashkenazi Jews. The Ashkenazis, who came mainly from Germany and Eastern Europe, looked askance at the darker skinned S-Y
s. Some Ashkenazis called the Syrians dirty Arabsche Yidden
(Arab Jews). "We had a name for the Ashkenazi, too," Sam Antar remembers. "We called them Yids
, or more usually, we called them Jay-Dubs
, for the first and last letter of the word J
. To mock them like." S-Y
s maintained a strict Talmudic religious observance and brought their sons into the family business, usually some type of retail operation, such as linen shops or gift shops, or wholesaling inventory to these shops.
After a stint in the Combat Engineers during World War II, Sam returned to Brooklyn and married Rose Tawil, whose father owned several clothing stores. He and Rose bought a beauty of a four bedroom home on East Third Street, between Avenues T and U. Economically the neighborhood ran the gamut from the very rich to the just-getting-by. A $5,000 house sat next to a $150,000 house. In later years, the better-off families, including the Antars, would move to the Jersey coast. But in those days, a former resident recalls, "It was more important to be near the community, regardless of how much money you were making."
The families of Aleppo-in-Flatbush centered their lives around the Shar’aree Zion
(Portals of Zion) Congregation, a massive rotunda auditorium whose grandeur spoke to the Aleppine Jews’ religious devotion. Though Sam Antar was constantly on the go, tending retail concerns in Detroit, Kansas City, Charlotte, Tucson and Bakersfield, he never began a day without first giving prayers at shul. Besides the gift shops he started with, Sam eventually owned discount department stores, costume jewelry concessions, and clothing stores across the country. Even so, Sam kept the Sabbath in whatever town he happened to find himself, ceasing work of every sort from Friday sundown until Saturday night, refusing to perform simple calculations or to flip on a light switch because of the Talmud’s commandments to cease work and "light no fires" during Sabbath.
Sam and Rose began their family in 1948 with a son, Eddie, who was named after Rose’s father. A growing household didn’t change things much for Sam. He continued his nomadic life, chain-smoking Chesterfields and downing barrels full of coffee. After Eddie, Rose brought a girl, Ellen, and two more boys, Mitchell and Allen, into Sam’s house. The kids saw their father only sporadically. But they had no doubt they still were part of a family. As the most successful of Murad’s offspring, Sam was de facto
head of the extended Antar network. Adjmis, Tawils, Gindis, and Shaloms tramped through Sam and Rose’s Brooklyn home, which became a kind of headquarters for family business. "You had your business connections with your own people," one Antar remembers. "Often we got into retail and different ventures because we couldn’t get jobs elsewhere. Other business people, other Jews even, wouldn’t work with us. So we took care of our own."
Doing business with "your own" made it easier to fudge receipts, taking advantage of all the cash that rolls each day through a retail operation. Sam has freely admitted, with a gleam in his eye and a whatever
roll of his shoulders, "I skimmed millions and millions of dollars. But I never lied, I never cheated anybody. I cheated the government maybe, but not anybody. I always worked hard." No one ever accused an Antar of dragging his feet. The entire family bounces with the energy of people born to sell. They’ve pushed everything from trinkets to air conditioners, and if they could buy a donkey skin at wholesale, chances are they would send you home with one.
As Sam’s boy Eddie became a young man, he more than fulfilled the family tradition. Neighborhood admirers nicknamed him "Kelso," after a famous race horse. Eddie made it his business to live up to the name, strutting his stuff from Ocean Parkway straight into Times Square. He was pocketing several hundred dollars a week, real wages in the early 1960s, especially for a high school kid. As soon as he turned 16, Eddie left Abraham Lincoln High School altogether. No use pretending, everybody knew where this boy’s future lay, and it wasn’t in a book.
"By the time I was 15," Eddie remembered with a grin, "I was out of school officially. I mean, there was no keeping me in. My parents did try. But what was school gonna do for me? It’s not like I wanted to go hang out on the streets. I wanted to work. I liked the sense of independence I got from buying my own pair of pants with my own money."
He got a lot more than pants. A natural salesman, Eddie was soon bringing home $700 to $1,000 a week, first at his Uncle Zookie’s handbag shop, and then by selling appliances on commission at a department store called Crawford’s, owned jointly by Sam M. and one of Eddie’s cousins. Eddie’s peculiar version of charisma gained him his second nickname. Kelso
became Crazy Eddie
when some teenage girls from his high school cut class to spend an afternoon browsing the aisles at Crawford’s. Eddie was trying to sell a 30-something housewife a deep fryer. He flattered her, teased her, he darted up and down the aisle grabbing for display models, he cupped his heart with his hands and bounced on his toes, as if unloading this particular fryer meant the difference between living and dying. When the woman said she’d think about it, Eddie blocked her exit with a tall shelf. The woman had to either buy the fryer or set up housekeeping.
"Hey, Crazy Eddie!" the girls squealed when the woman finally squeezed down the aisle and out the door.
Eddie had a blast working sales but he dreamed of something larger. "If I’m getting $600 or $700 a week, my boss, he’s getting a lot more," Eddie complained to his brothers, Mitchell and Allen. "Before I’m 20," he bragged, "I’m gonna be running my own store. Just like Pop."
He missed his mark by just a few months. Eddie had recently turned 20 when Sam agreed to stake him in a small electronics outlet. All the family turned out to stretch the banner—Sights and Sounds—
across the door at 1119 Kings Highway, Brooklyn, near Coney Island Avenue. The full name of the store was Sights & Sounds ERS, a letter for each of its partners: Eddie, his cousin Ronnie Gindi, and Sam M.: ERS. Like all Antar ventures, the stereo store—"a 12-by-12-foot hole in the wall"—was a family affair. The only problem at Sights and Sounds was that nobody bothered to come to the party. They got plenty of traffic from friends and relatives, but not enough paying customers from outside the circle. A year and half after their grand opening, Eddie and Ronnie were about to go bankrupt. They owed $400,000 to trade creditors alone. Ronnie decided he’d had enough and left to join another relative’s wholesaling business.
Eddie wasn’t through. "Nobody knows we’re here because they don’t expect us here. They’ll go to Cortlandt Street in Manhattan for high-fidelity components; if they’re thinking affordable, but still nicer than the department store, they’ll visit Audio Exchange on Flatbush Avenue or Davega’s on Fulton Street." Eddie said they needed some promotions to get people’s attention. It’s part of the culture," he explained to his father, "It’s rock and roll."
"We were the greatest combination in the world," Sam M. said later. "I had an idea and he was a fantastic executor. I would come up with beautiful ideas but I could never execute them. But Eddie, he was able to execute them. I had an eye, and he had a way for making it happen. Do you follow what I’m trying to bring out to you?" Sam bought Ronnie Gindi’s half of Sights and Sounds and put the whole thing in Eddie’s hands. Sam would retain a one-third partnership, technically, but he had his own affairs to look after. Eddie would run the business alone.
"Listen, Eddie," Sam lectured, "I’m giving this to you, but it’s not for
you. You can grow this business for the entire family. All these years, I’ve been going here, going there, pouring yo-yos and squirt guns into display bins, kicking shins under the table, passing envelopes. This is our chance, the family’s chance, to have more than a few retail stores with cash income. We can have everything."
Eddie was barely listening. He found a space for lease on King’s Highway, just a few blocks from the old Sights and Sounds and within sight of the Portals of Zion rotunda. With a flair befitting Arthur Fonzarelli, the man from Avenue T strutted onto the Brooklyn stage. For starters, he renamed the store. Sights and Sounds sounded like it came out of Life
magazine. Eddie was looking for Rolling Stone.
Remembering the squeals of his teeny-bopper fan club, he decided to call his store "Crazy Eddie’s Ultra Linear Sound Experience."
A visit to Crazy Eddie’s wasn’t just shopping, it was a ride on a fast train. If Eddie let a customer out the door without selling them something, he felt miserable. At the least, he’d talk them into leaving a few dollars on the layaway counter. Eddie’s flashiest maneuver, a holdover from his days pushing deep fryers at Crawford’s, was to simply block a person’s way—he’d walk over, lock the door, and announce, "Now you have to buy. We’re all staying until we can make a deal." He talked one customer into taking off his shoes, then grabbed the shoes and put them under the counter. "Now," Eddie mocked, "You want your shoes back, we’re gonna make a deal."
Behind the store, hunched over in a 12-by-12 inventory room with no ventilation, one of Eddie’s cousins was busy uncrating turntables.Wearing short pants, chewing on his fingernails, his buck teeth and chubby cheeks marking him for life, the boy lacked Eddie’s natural charm. The boy’s name was Sam. His father was Uncle Eddy, Sam M.’s brother. They called the boy Sam E.
, which came out sounding like Sammy
, to distinguish him from the patriarch. To Eddie the boy was just another boy on the payroll. But this little boy, this Sammy, so nervous he made others start to fidget in response, would bring down the mighty Antars without ever making a fist.
Sammy Antar remembers coming home from school one afternoon and finding out he’d be working in Eddie’s store. "I had a job for $5 a day with Ronnie Gindi, working at Crawford’s. Eddie offered me $10. Off the books, $10 cash. I would be making more money, but not just that, I would also be training to come into the business when I was a man. I was 14 years old in 1971. My father’s business was not that much a successful business that I’d go into his business as his son. So I went into Crazy Eddie’s. It was like Eddie saying I was going to come along. Though of course he didn’t say it in so many words. If he spoke to me, it was like, ‘Hey kid, clean the fucking bathroom, will ya?’" Sammy said they used him "as a maintenance boy, a
While Eddie swaggered in his leather jackets, Sammy talked hardly at all. He was shy, draped with a pot belly, and he walked in zig-zags. Sammy was prone to say something stupid if he could think of anything stupid. He knew he’d never be as charismatic and confident as Eddie. But he studied hard and made good grades. Sammy was a good kid. "I remember when I was in camp, about six or seven years old, Mitchell, Eddie’s brother, he helped me out. Eddie didn’t want anything to do with me. Mitchell, he took me out and taught me how to play . . . baseball. He gave me some kind of dignity." As for Eddie, Sammy remembers, "Eddie was a godlike figure to me. We all looked up to him like a leader. He worked out with weights, he carried himself like a prince or something, he was just so charismatic."
Life at Crazy Eddie’s was good, even for the Antar family dork. "The first year, for a holiday bonus, Eddie gave me $1,500. In 1971, when you’re a 14-year-old boy, that’s a lot of money. Of course I idolized him. He didn’t have to hug and kiss me. The next year, I was making $30 a day and I got a $5,000 bonus.
"Our families revolved around the businesses," Sammy remembers. "When we got together for dinner or a holiday, nobody talked up the football game or political bullshit. They talked business. When I got married in 1979, at the age of 22, I moved onto the block. Eddie lived there, so did Mitchell and Allen, his brothers. So did Sam M., all of them, on East Second between T and U. When Eddie’s sister got married, she and her husband, Benjamin Kuser, they moved in next to her father. So that area, between T and U streets, it was called the Antar Complex
One night in 1972, just after midnight, a deejay billing himself "Doctor Jerry" came on the air at station WPIX. Rattling his way through a spot for a local stereo store, Doctor Jerry Carroll ended the ad with a peculiar tag line. "Crazy Eddie," he sang in a basso profondo
windup, "His prices are IN-SA-A-A-A-A-ANE!" Carroll’s A-A-A ratcheted into the laugh of a cartoon crazy.
During the next song, a listener called to say he loved the way the Doctor yelled, "IN-SA-A-A-A-A-ANE!" The caller was Eddie Antar. He told Doctor Jerry to say the line that way every time. Soon, Jerry Carroll had become Crazy Eddie, and listeners followed his call—I’M IN-SA-A-A-A-A-ANE!—
straight into the Antars’ cash registers. By 1973, Eddie was opening a second store. Two years later, he’d placed a third Crazy Eddie operation in Manhattan and established a corporate headquarters to supervise further expansion.
Jerry Carroll put a face on the audio insanity in 1975, when he barged onto greater New York’s television screens, blazing new trails in just how hard you could push a product. Eddie gave Carroll a wad of money and told him, go crazy. So, during a volcanic heat wave, viewers watched Crazy Eddie swabbing his perspiring face with a soaked rag, wailing in pain, his only relief the cool, cool prices available on Panasonic stacks. Crazy Eddie cavorted with baby ducks, bathing beauties, and dancing midgets. Crazy Eddie modeled Santa suits, leisure suits, and his birthday suit. In a movie-style scene, shot in a men’s bathroom, a gang of Brooklyn hoods pranced around, working pocket combs through their greasy pompadours, humping their shoulders to look tough. Suddenly, they burst into song, doo-wop style,
When you think you’re ready,Come to Crazy Eddie.
He’s got the cheapest prices,You know ‘cause you been told.
Cra-zy Ed-die Won’t-Be Under-Sold.
As Jerry Carroll took on the public role of Crazy Eddie, Eddie himself became a sharp-tongued drunkard and braggart. He’d once ranked among Brooklyn’s greatest salesmen, but Eddie was becoming a Dealmaker. He’d still do anything to get your cash. But he wasn’t nice and his techniques weren’t limited to stealing your shoes. A full black beard accented Eddie’s thick lips, which were often scowling unless he was laughing at his own jokes. He lived on fast food and Stolichnaya. If he slept three hours in a night, he considered it a quiet evening. He’d show up late for a meeting, grouchy, lurking behind dark glasses, with Sugar, his 100-pound German shepherd, in tow. Sugar’s sharp snout and serious eyes contributed to Eddie’s negotiating power. He’d raised the dog himself, wrapping his forearm in a towel and teaching it to fight.
"What he did to that dog was a shame," Sammy says ruefully. "He took a fine animal, this little puppy that wanted only to run and play, and he made it a monster, always mean, always tense."
Sugar wasn’t the only one feeling mean after a few outings with Eddie. His high school sweetheart, who became his wife in 1969 just as he was breaking into the electronics business, was finding that life with lover boy had turned into a serious drag. Her name was Deborah Rosen, a lovely blonde woman admired for having a bounty of good sense as well as a cheetah-sleek figure. She wasn’t exactly the woman anyone expected Eddie to marry. Debbie was soft-spoken, reserved, gentle. Eddie was a maniac, constantly working his angles. She was a Jay-Dub
, Jewish but not Syrian, from the shinier side of the ethnic tracks.
As soon as Debbie graduated from Brooklyn College, she and Eddie got married in a lavish ceremony at the Congregation Shaare Zion. They moved into a three-bedroom brick house on East Second Street, across from Sam and Rose. Debbie took a job teaching second grade in Borough Park. Two years later she quit, after she learned she was pregnant. Twin girls, Danielle and Gabrielle, were born in January of 1973. She never worked again.
Debbie’s husband was in the process of making retail history, but Debbie was unimpressed. She hardly saw Eddie, who spent 14-hour days in his stores and then hit the town for long evenings "talking business," which naturally occurred in crowded uptown clubs. Debbie and Eddie’s fights, which had become legendary for their duration and ferocity, eventually dissipated into a black wall of estrangement. The more stores he opened, the more Eddie had better things to do. He’d married her, gave her kids, gave her money. The rest she could do herself.
Sammy says, "He’d started drinking hard by this time. He’d always liked to party, but as he got more successful and the stakes got bigger he drank a lot more. It made him mean. He’d get drunk and spew his venom. He’d tell Debbie she wanted him to fail. He accused her of using him for his money, because she liked to spend a lot. One night she tore into him. She said that he took her career and her life from her, that he threw her in a house, impregnated her, and abandoned her. She told him she knew he slept around, and she’d kill him if she ever got proof. At this point in the conversation, Eddie was about to pass out. All he could hear was Debbie raving at him, not her words."
Eddie drew payback on a snowy Friday night in February 1977. About 2:30 in the morning, he stepped out of a discotheque called Hurrah’s and was grabbed by two men. Each man knifed Eddie several times in the stomach, then dropped him to the sidewalk. Doctors at Roosevelt Hospital feared he wouldn’t live through the night. It would take six operations to repair the slashers’ damage.
Sam M. took a train to the hospital early Saturday morning, as soon as he got the phone call about the stabbing. It was over a woman, the caller informed Sam. Eddie wasn’t going to say anything, but he knew well and good where the hit came from. Stalking to his son’s bedside, Sam hissed, "What were you doing out there? What were you thinking? Aren’t you’re a married man? You’re behaving like a kid, Eddie. . . . And besides," Sam shrieked, his voice echoing down the hospital corridors, "It’s the Sabbath! What are you doing out on a Friday night?"
Recovering from the assault, Eddie never looked back. He began remodeling his private office at Crazy Eddie headquarters. Besides a massive marble desk and leather furniture, the room contained a full bar and a workout area. Eddie, clad in his trademark sweatsuit noir
, pumped weights during business meetings. His phone rang constantly, about a quarter of the time for business, the rest a stream of inquiries from drinking buddies and the women he met at clubs. The Fonz was morphing into Mr. Saturday Night.
A supplier’s representative remembered that Eddie didn’t look at him the entire time they were negotiating. "He was lying on his back on the weight bench when we got there. He talked with his head leaned back or just at the ceiling. After a while he got up and fixed himself a drink and motioned for us to help ourselves. Then he went back to the weights." The tough-guy act was aided by Sugar, who took a notion to sit on the couch next to the nervous rep. The man left with a deal to everyone’s satisfaction, but the terms were strictly Eddie’s.
Bob Marmon, who took over the Crazy Eddie operations after the Antars were ousted, feels a mixture of disdain and admiration for his erstwhile opponents. "There was everything wrong with how the family ran the company. But the sad thing is, Eddie Antar had the right idea. He proved that a free-standing electronics store could happen. Everybody thought electronics had to be part of a department store, where you could expand and contract the walls depending on what’s hot. Eddie had the idea that a free-standing electronics store, all hyped up and promoted, could make it alone. He was right. . . . But he was stealing from the first day."
Sammy Antar admits the Antars always ran parts of their business underground. "We didn’t think of it as fraud, just as part of our experience. Committing fraud was just like another part of life.For example, we paid some of our employees off the books. It’s not uncommon, you know. No different than paying a babysitter cash. You just don’t show everything to the government."
One of the people paid off-book was Allen Antar, Eddie’s brother. As Judge Harold Ackerman later recounted during Eddie’s trial, "Allen claimed that his entire compensation when he worked as a store manager was a weekly paycheck of $300. . . . Yet he drove a Jaguar. . ., was married with three children, two of whom were in private school with a tuition of approximately $25,000. Moreover, on a purported $21,000 annual salary, Allen was also able to take a three-day trip to Las Vegas where he proceeded to lose $19,000 playing keno."
The malfeasance became bolder as the company grew. Sam learned by watching his father, who directed a plan to skim cash out of the store receipts. "In 1973 my father started handling all the financial duties for Crazy Eddie’s. The store managers would drop off cash to the house after they closed at 10 o’clock, or someone would pick it up." At least $2,000 to $3,000 of each day’s purchases were paid for with cash, which Eddie’s managers dutifully separated from the checks and credit card slips, hauling the sorted receipts to Uncle Eddy’s house.
Sammy tells how, "My father would talk with Eddie and Sam M., and then he’d make the money into bundles: one bundle was deposited as store receipts, one bundle was to pay employees working off the books, the other bundle would be skimmed." Uncle Eddy kept $200 to $250,000 in rubberbanded bills hidden in his floorboards beneath an old radiator. When the stacks got too thick, Sam M. took the money to his house, where he stashed part in a padlocked file cabinet and the rest in a false compartment he’d constructed in his ceiling. Eddie had better than $200,000 lying in boxes underneath his bed. "This is fraud the old-fashioned way," Sammy says, "using strictly cash. That way there’s no paper trail. At least a quarter of the merchandise that came through, we bought with cash, through independent jobbers, then we sold for cash." For every $5 reported as company earnings, the Antars took $1 for themselves.
After a while the radiators and phony ceilings were overflowing with cash. In October of 1979 Sam M. and his brother, Uncle Eddy, took their wives to Israel. Each member of the party carried $50,000 cash in their bags, which they used to open accounts at the Bank Leumi. Once the accounts were in place, a parade of Antars kept the cash machine running, carting several hundred thousand dollars a piece per trip. Eddie made several trips himself. According to Antar lore, he insisted on strapping stacks of large bills across his body and then hopping his plane. Presumably he had reason to believe he would never be patted down by a customs officer.
In April of 1980 Eddie’s brother Mitchell and their sister’s husband, Benjamin Kuszer, flew into Tel Aviv. Also accompanying them was an attorney named Solomon Antar, one of Murad Antar’s nephews, who’d recently been named Crazy Eddie’s corporate counsel. The three were carrying $600,000 in their suitcases. Hauling cash in increments this large required several participants because, as Sam M. pointed out to an unamused federal judge, "A million dollars is too much in one suitcase."
The family skimmed some $3 million to $4 million a year. No one knows the totals for sure. In a single Israeli account, Number 31332, the Antars deposited more than $6 million between 1980 and 1983. Later this money would provide the key to Crazy Eddie’s finest hour, but for the moment it was tax-free, lying comfortably offshore, soaking up interest dividends by the ten-thousands. Sammy says, "Now we were going from kindergarten to the first grade in the school of fraud."
By the early 1980s, Eddie was itching to list his company on the stock exchange. Jerry Carroll, who served Eddie as an armchair adviser as well as pitchman, told his boss, "Going public is the wrong thing. It’s a different world, and it’s run in particular ways. You’re the wrong guy to go public." Carroll might as well have been talking to Sugar, the German shepherd. "Eddie always did what he wanted," Carroll shrugs.
As part of his IPO strategy, starting in 1979, Eddie skimmed a little less cash each year. So even if his sales had been flat (they weren’t), the financial statement showed growth, because now more of the actual receipts were being reported. The strategy became known as the 3-2-1 method: fewer dollars skimmed each year boosted profits until the Initial Public Offering cashed everybody out. "Who knew?" Sammy wonders aloud, "that telling the truth was so lucrative?"
By the end of the decade, the Antars promised, we’ll run 50 stores. Some $8 million of the IPO funds, according to the CRZY prospectus, would be used to move the company into a new 110,000-square-foot headquarters in Edison, New Jersey. The flagship building would carry the Antars into a billion-dollar future.
But not everyone was convinced. The family had never let anyone get a look at their organization. No one from the company had spoken to the press in more than a decade. Even now, as they prepared to mount a public offering, the family wasn’t talking. According to scuttlebutt and police records, Eddie’s contempt for his wife and kids had circled back and slapped him in the face. Eddie and Debbie had five daughters by the winter of 1983, and they had little else. Both routinely threatened
Sam M. cornered Eddie in his office. He said, "Son, your womanizing, drinking, and carousing brings shame on everyone in the family, but most especially on five little girls: Simone, Nicole, Danielle, Gabrielle, and Noelle." Sam named each girl in a Mosaic voice and held five accusing fingers in front of Eddie’s heavy-lidded eyes.
Eddie replied, "I am a big boy. I am over 21, you know. You can’t tell me what to do."
"Tell him you’re through," Sam M. told his daughter-in-law. "Either he acts right, or you’re going to divorce him. Tell him I’ll throw him out, just like I did Allen." In the mid-70s, when Eddie’s younger brother Allen divorced his wife for another, (non-Jewish) woman, Sam barred Allen from family gatherings and had him fired from the company. Allen despaired. After a year and a half of unreturned calls and no luck finding any new business partners, he gave in, divorced his new wife, and remarried his first wife. Sam M. was taking the same stance against Eddie. If he couldn’t make Eddie back down with a direct confrontation, he’d use Debbie as a lever.
Sam knew to expect a tougher fight from Eddie than he’d gotten from Allen. Mr. Saturday Night was getting loud these days. He’d limited himself to only one lover, but he was fiercely loyal to her. She played the ingenue to his strutting Little General. She lived rent-free in a Manhattan apartment building and drew a salary from a Crazy Eddie subsidiary.
Debbie Antar, who supervised the new Antar Complex in Oakhurst, New Jersey (where Sam and Rose had also moved), knew everything about Eddie’s secret life with his new woman—her phone number, address, and how often Eddie visited her each week. And Debbie knew the woman’s name: "Debbie." The other woman also had blonde hair. But where Debbie 1
(as she’s still called to this day by the Antars) dressed like a well-to-do mother of five girls—the very picture of Oakhurst wholesomeness—Debbie 2
(Debra Ehrlich in legal documents) liked her makeup punchy and her hair with body.
Such are the vagaries of love (and the intricacies of divorce court) that Debbie 1, after ten years of battling Eddie, still hoped she and her husband could reconcile. He promised her, on the morning of December 31, 1983, that he loved her. He wanted them to stay together. He suggested that she leave the girls at his father’s house for the night, and join him in the city to celebrate New Year’s Eve. Debbie said okay, but sure enough, Eddie called a little after 3 p.m., as the girls were being dropped off from school, to say he had to meet with some investment people about the Crazy Eddie IPO.
And the Antar Complex exploded. Robin Antar, who was married to Eddie’s brother Mitchell, quizzed her husband until Mitchell admitted that Eddie was spending New Year’s Eve with Debbie 2. Robin called Ellen Kuszer, Eddie’s sister, who offered to help. Ellen said she felt guilty because it was her
husband, Benjamin Kuszer, who paid for the Manhattan apartment and Debbie 2’s salary. Benjamin ran the Crazy Eddie Record and Tape Asylums on behalf of the family.
With so many tangled fuses lying about, Eddie’s holiday was gonna show up with a bang. Debbie 1 asked Sam M. and Rose to keep the girls. Debbie arrived at the grandparents’ house trailing overnight bags and dolls for five. Her sisters-in-law, Robin and Ellen, were waiting inside, smoking a train of cigarettes and cursing everyone’s least favorite son.
Debbie didn’t say where she was going because she didn’t have to. The three women piled into the Lincoln with her, and while the clock climbed toward midnight they motored across the Williamsburg bridge. Knife-wielding assailants had failed to get Eddie’s attention; perhaps the Antar women could. As they pulled into the parking lot, Debbie saw a limo idling in front of the building on 80th Street and First Avenue. Eddie was sitting inside, waiting for Debbie 2.
Slamming her car into "Park" while the wheels were still rolling, Debbie threw open her door and ran to the limo, beating her fists on the rear window for Eddie to get out. She screamed he was a coward. Nothing stirred behind the blacked out glass. Debbie cupped her hands and pressed them against the window trying to see inside. She kicked the car doors, raging in obscenities. Eddie wouldn’t budge. Then the limo was moving, headed out of the driveway, and Debbie was climbing onto the car, hanging on with one hand while she yanked off one of her red spike heels with the other and began pounding dents into the roof.
When the door opened, Debbie jumped onto the pavement. Face to face, she and Eddie railed. The only sound rivaling their shrieks, even on a Manhattan New Year’s Eve, were the howls and epithets emitted by Robin and Ellen, who were also letting Eddie have it. Debbie 2 looked on from her balcony.
As Ellen Antar Kuzer shoved between him and Debbie 1, Eddie slapped his sister across the face. Ellen recoiled in horror and searched for an appropriately vicious comeback. Eddie spat at her that she’d caused the whole thing. "Just like Pop, you’re always stirring in something!" he accused. A doorman called the police, but before the patrol car arrived, Eddie leaped back
For three days, no one saw him. Then he freaked. On the 4th of January, Eddie stalked into the company’s Brooklyn headquarters, gripping Sugar’s leash with clenched fists. He burst into Mitchell’s office, loudly accusing his brother of fomenting the "attack" on him. When Benjamin Kuszer stepped into the office and told Eddie, "Calm down," Eddie shoved him away. "You’re both out of the business," he threatened. "You can count your days."
Later that afternoon Eddie had a nasty encounter with his mother, whom he regarded as a traitor for siding with Debbie 1 against him. While they argued, Rose became so agitated she passed out. Sam M. flew into a rage, incredulous that his beloved first-born would treat his mother so. So intensely and unrelievedly did Sam rage over the next days that he suffered a heart attack in the second week of January 1984. Who could blame Ellen for exclaiming, "He’s killing us! One by one, he’s killing us all."
Sam M.’s heart attack was serious business. Murad Antar had died from a heart attack; Uncle Eddy had nearly died from a heart attack; now, Sam. His doctor insisted that Sam had to stop smoking. He’d gone to as much as five packs a day. "I could keep the Chesterfields or I could keep on living," Sam shrugs. The Vegas veteran knew it was time to fold. Even Eddie seemed to be braced by the threat of his father’s death. When Sam was released from the hospital, Eddie was there to bring him home.
"We still have a business to run," Eddie said. No rift stretched so widely it couldn’t be bridged by a few dollars, preferably in six-figure increments. "Everything is forgiven, everything is forgotten," father and son agreed. Sam M. spent his recuperation at Eddie’s house, under constant care from Debbie 1 and his doting granddaughters. Eddie came by nearly every day, though he spent his nights in Manhattan with Debbie 2.
Sam recalled that in the days following his illness, "Everything was hunky-dory. Eddie was very civil to Debbie and he treated her very well and he gave her his whole salary, $700,000 a year, and everything like that." Sam personally watched Eddie give Debbie $1 million in cash.
Eddie promised to make everything okay. Sam hoped so, but just in case he’d taken precautions. Eddie didn’t know it yet, but Sam and Rose had transferred $3 million out of the cash-skimming account they owned jointly with their son at Bank Leumi. Eddie discovered the transfer while Sam was recuperating from his heart attack. Standing over the old man’s sickbed, Eddie swore he’d see his father in hell unless he put the money back, pronto.
"We own Crazy Eddie’s together," Sam M. replied.
"You own one third only," Eddie said, "I own the other two thirds. Here you are trying to take half the money." (The account had contained a little more than $6 million.)
Sam said, "Okay, I’ll return a million dollars." Sam told a judge later, "We said, ‘Everything is forgiven,’ but down in the heart it wasn’t forgiven. It was forgiven because we had to be in business. I couldn’t just stop the business like that. But I didn’t like what he was doing. I didn’t like his morals."
Going Public: Crazy Eddie as Rocky Balboa
For those who are new to investing, and lucky enough to invest in Iomega or America Online, the explosive experience
could be a little like going to a casino or a horse track for the first time, and hitting the jackpot. It looks too easy, and
you get the feeling it always will be. Eddie Antar cured me of that notion. —The Motley Fool
Electronics retailers were doing $35 billion a year in 1985, and growing by 12 percent to 14 percent every year. By 1990, the National Retail Merchants Association predicted the industry would double its business to $77 billion a year, maybe $90 billion. Most of this boost occurred thanks to one hot-rod item: the videocassette recorder, or VCR, the very latest item on the American bourgeoisie’s must-have list.
Crazy Eddie, grabbing a respectable share of the greater New York market, posted an increase in sales by 55 percent, from $29 million to $46 million in just the company’s first year as a public corporation. What really wowed investors were the earnings
Eddie was posting on those sales. Net income for 1985 rang up at $1.141 million (compared with $538,000 the year before), paying dividends of 0.17 cents a share. The Antars price/earnings multiple was the highest in the industry.
"Crazy Eddie has never had a down year," Eddie bragged in his first annual report. Not in 15 years, not in one single store, had
the company ever shown a loss. Crow served here, Eddie told his critics. The company was building a giant 110,000 square foot headquarters/warehouse in Edison, New Jersey. There, Eddie announced, "I’ll be opening my own personal store."
Eddie had somehow transplanted his indigenous talents as a salesman into the richest ranks of American business. "He was such a charismatic figure," an observer remembers. "At annual meetings—not, historically, the sexiest event on the social calendar—the employees in the audience would chant, ‘Ed-die! Ed-die! Ed-die!’ Then he would come in raising his arms like Stallone in Rocky.
It was like a cult."
Crazy Eddie’s was part of a new breed of electronics superstores
. Once upon a few years ago, manufacturers like Pioneer sponsored company stores
. An entrepreneur set up shop as a "licensed dealer," carrying a respectable brand of merchandise. You visited your local Pioneer dealer, or Bose dealer, or whoever. But in the age of the superstore, every possible brand name is arrayed under one warehouse-sized roof. It’s the Day of Pentecost for retailer shoppers. At Crazy Eddie stores, the prices were affordable and the aisles, chock-full of electronics, roared like a circus. Balloons waved from the top of entertainment centers, music pulsed, greeters handed out prizes, stuck name tags to shirts, and served food, all opening the way for hordes of salespeople, emerging one after another from the stockroom like clowns crawling out of a car, men trained to talk people away
from the model they thought they wanted and into
what the purchasing department said to push.
Market watchers loved CRZY stock as much as shoppers loved the stores. Soon, Eddie announced in his 1984 report, we’ll be launching a home-shopping network on New York television. The idea seemed outrageous at the time, but why not? Eddie’s own TV channel. All Eddie, all the time. Sell people a telephone to make the call, then sell them something else.
His whole life, Sammy had lived in his cousin’s shadow. Eddie made the big splashes. Eddie expanded the family into a conglomerate. Eddie got the girls. Sammy cleaned the bathrooms, totalled receipts, and banded skimmed cash into bricks for Eddie to haul to Tel Aviv. Whatever Eddie wanted, Sammy obliged."We need an accountant," Eddie announced when Sammy finished high school. "I’m gonna send you to college."
Sammy attended Baruch City College from 1979 to 1983 and earned an accounting degree. For his professional apprenticeship Sammy worked—where else?—at Penn and Harwood, the firm that performed Crazy Eddie’s audits and who owed a third of their business to Crazy Eddie fees.
Sammy wasn’t the only one helping Eddie fudge his numbers. David Neiderbach, the company’s warehouse manager, said Eddie approached him near the end of the fiscal year 1985. "Eddie asked me to make changes to the inventory figures to show more inventory than was being counted. He said he wanted to do this to make the company look better and I never questioned that." Neiderbach boosted total inventory by $2 million in 1985 and $6 million in 1986.
When the auditors came to make their counts, Neiderbach climbed onto the product stacks himself, and called the numbers down to the person below. If the auditor insisted on climbing up, Neiderbach held the auditor’s notebook and marked the counts himself. Neiderbach said he used a range of inflationary strategies: counting empty boxes as merchandise; listing cheap merchandise at premium prices; building tall ‘dummy’ columns at the edge of a large shelf and claiming the containers were stacked three or four deep when the rear area was in fact empty.
Besides overstating the inventory ready for shipping to stores, the warehouse also fiddled with what retail people call their "reeps." Reeps is short for repossession, i.e., products that have to be returned to the manufacturer, who then refunds the wholesale cost of the merchandise to the store. Crazy Eddie’s reeps were inflated with $1 million of phony returns in fiscal 1985.And as the saying goes, a million here, a million there—after a while you’re talking real fraud.
"How easy was it do all this?" Sammy asks. "Pulling this stuff off is like playing with kids. The big firms use their audit detail as a training ground. It’s not their fault, but these auditors, they’re kids just out of college. The firm recruits them out of college with their nice 3.5 to 4.0 GPAs.
"The person who served as our primary auditor had only been at his firm for eight months. He had never participated in a retail audit. The kid who came in and worked on the Accounts Payable he was going to testify to—he worked on our books about three days. His supervisor reviewed the papers for less than a day." Besides being unprepared, the auditors "only took inventories of about a third of the stores anyway. And I helped them decide which stores to look at. We had, at the height, about 30 stores; I showed them a list of 10 stores, and they chose eight of those and added two more that they picked on their own."
Sammy and his cousins also found ways to spy on the auditors. "This one guy in 1986, he hands one of our warehouse clerks a sheet of paper and says, ‘Make me a copy of this, will you?’ The paper listed the test counts, showing which parts of the inventory the auditors planned to do tests on and which parts they’d just take rough counts. Of course we made a copy for ourselves. We knew where they were counting and where we could do what we pleased."
When Eddie made Sammy his Chief Financial Officer in 1986, he wasn’t exactly doing his cousin a favor. There was a $3 million deficit from the previous year’s inventory fraud that needed covering up. Plus, Eddie said they were going to need a $10 million bump for the coming year. Growth in new sales had slowed from 20 percent to just four percent, but Crazy Eddie had never had a down year, and wasn’t going to start now. Eddie told Sammy to make the books look profitable. "He asked me about how to commit certain frauds. It wasn’t like I was surprised or thinking, ‘Wow-wee, how dare we do this thing?’ It was a casual thing. He said, ‘We need to do this and this.’ And I said, okay, I’ll show you how I would do it."
"Now, we commanded a lot of respect," Sammy muses, "Some people might call it fear, with a lot of businesses in the market. So it was easy to convince a couple of our large vendors to ship us a bunch of merchandise right as the fiscal year was ending. Privately, the vendor agreed to hold the bill for the merchandise until after the end of the fiscal year. Then we’d either pay for the merchandise in the new year, or we’d send it back after the audit was over. We basically borrowed inventory."
Sammy also brought new blood to the reeps fraud. The year before, Eddie and his lieutenants had simply claimed to handle more returned merchandise than they actually had, collecting about $1 million in reimbursement from manufacturers. Again with the year-end visit from the auditors in mind, Sammy suggested they produce documents saying that large lots of merchandise had been shipped off as reeps. In fact they kept the reeps merchandise stacked in the warehouse, and counted it as inventory.
Sammy’s stroke hit full bore when created his Panama Pump
. That’s the name prosecutors used to describe Sam’s plan for manipulating the family’s international banking connections. "I was surprised, really, that nobody had thought of doing it before," Sammy admits. "We had been gradually moving the money we skimmed into Israeli banks. So then I learned how to bring the money back using what’s called a double secrecy jurisdiction transaction. Panama today has one of the strictest bank secrecy laws in the world. The country has no currency of its own. Panama uses U.S. currency. And some of the biggest banks in Panama are owned by Israelis. Since the banks are in the same network, you can request that both the withdrawal and the new deposit be kept secret. So we opened accounts in Panama using false names. Using the secrecy laws we transferred a million and a half dollars from Bank Leumi Israel to the Leumi bank in Panama. Then we had the alias-owned Panama account write drafts payable to Crazy Eddie. Now we had successfully brought the money into the company. The worst that happens is we have to pay some taxes."
Sammy broke up the million-five into smaller checks, ranging from $75,000 to $150,000. The funds helped stoke a figure known in retail lingo as comparable store sales
. Comparable store sales, or comps
, break down a retail chain’s revenue store by store. Each location’s present-year sales are compared to its sales for the prior year. To really see if a chain-store operation is growing you have to check to see if their comps are growing. Sammy puts it this way: "If I have one store and I go from $100,000 in sales to $200,000, then great. I just doubled my business. But say I open up 10 new stores and, again, I go from $100,000 to $200,000. I’m only making 100,000 extra dollars off 10 new stores, only about $10,000 a store. Now my numbers don’t look so impressive. The comps tell you the real performance of the company."
By salting individual stores with the Panama drafts, Sammy pumped their comps by two or three-fold. It was a simple ruse that anyone attentively looking at the Crazy Eddie books should have seen in a flash. For one thing, Sammy listed each Panama check as a single transaction. "Suppose you’re looking at the store’s books, and you see this draft from an Israeli bank operating in Panama that says $116,000 even. Wouldn’t you raise a question? Regular John Smith doesn’t walk off the street and buy $116,000 of audio equipment. What kind of retail receipt totals $116,000? Also, you might ask, why are other checks, equally large, drawn from this same bank, showing up in other stores’ receipts? Why are the drafts, deposited in different stores, consecutively numbered? And if you noticed several large checks, all from the same account name, deposited into different stores, you would ask, why are these checks all being deposited at comp stores?"
Like most Antar tricks, the Panama Pump didn’t require a lot of brains, just balls. "During the year , our comps were down, around four percent, where they’d been 20 percent the year before. This money from Israel, it brings our comp stores up from four percent to ten percent for that last quarter. Over the year, we got a 13 or 14 percent growth in comps. On March 5th, we announce our comps. Everybody cheers. March 7th is the new public offering. The stock shoots to $22 a share. Eddie and the old man cash in for millions."
Basking in his success, Sammy carried himself with more confidence than he’d ever known. "I had basically taken charge of all the frauds by this time. I didn’t have a nameplate, I mean fraud wasn’t in my job description, but that would have been my major occupation now."
On Wall Street where the market’s best and brightest danced to Sammy’s tune. Drexel Burnham Lambert’s "BUY" recommendation for 1986 was explicitly "based on 35 percent EPS [earnings per share] growth" and "comparable store sales growth in the low double-digit range
" (emphasis added). CRZY stock prices, the report predicted, would double and more during the next year. As if they were working from an Antar script, DBL declared, "Crazy Eddie is the only retailer in our universe that has not reported a disappointing quarter in the last two years. We do not believe that is an accident. . . . We believe Crazy Eddie is becoming the kind of company that can continually produce above-average comparable store sales growth." The encomium singled out the chain’s elusive but fascinating leader: "Mr. Antar has created a strong organization beneath him that is close-knit and directed. . . . Despite the boisterous (less charitable commentators would say obnoxious) quality of the commercials, Crazy Eddie management is quite conservative."
Sammy used the company’s relationship with its suppliers to run an alternative version of the Panama Pump. A small midwestern electronics distributor named Zazy needed merchandise. Zazy’s agreed to buy shipments from Crazy Eddie’s, at prices just above Eddie’s discount. Key to Sammy’s plan, Zazy’s would pay for the merchandise with checks in small amounts. For a $200,000 truckload of components, Zazy handed over 15 checks, ranging from $10,000 to $15,000 each. Sam salted the checks into his comparable store sales, once again making the numbers sing.
But Sammy learned that fraud was a cruel and demanding master. "Crazy Eddie’s was falling so fast we needed to create a fraud in 1987 that would make four times the money we had faked in the first couple years. We weren’t going to make the company profitable. We’d given up on that. We just needed to cover our previous frauds.
Sammy made it through the first two quarters using a generous supply of Tagamet and $700,000 in wholesale receipts from pumping up the store comps. His reports showed a ten percent gain in comparable sales for the first quarter and an impressive 15 percent for the second quarter. The real numbers were hovering around three percent to five percent, but only Sammy and Eddie knew that. In the third quarter (Sept. – Nov.) the squeeze got worse. Companywide, store sales fell into the negatives—nine percent lower than the previous year. Sammy figured he had to scrape up several million dollars somewhere. He went for help to his old friend, Mitchell, the cousin who’d taught him to play baseball, and the one level-headed Antar in Sam M.’s brood.
Mitchell suggested they approach the Wren company, which was already shipping merchandise to Eddie’s without filing an invoice. "Only we need to borrow cash money this time," Sammy cautioned. "An extremely short-term loan, and we guarantee them dibs on anything in our warehouse—whatever’s hot this Christmas, they got it in triplicate." Mitchell reminded the Wren reps that Crazy Eddie provided a third of their product. Up against the wall, Wren agreed to give Sammy $3 million in checks, provided the checks wouldn’t actually be submitted for payment. Sammy would hold the checks, listing them in the third-quarter report as "deposits in transit." Once the quarterly reports came out, Sammy gave back the uncashed checks and returned to ponder his troublesome ledgers.
By October 1986 the stock’s share price had fallen to $17.50. Even that was 6.5 times book value. A Fortune
magazine prognosticator worried, "If Crazy Eddie has anything less than a terrific Christmas quarter, the stock will tumble." The writer recommended covering at $12.
But before the stock tumbled, Eddie did. He’d already cashed in between $25 million and $30 million of his holdings. Then, just before Halloween, Eddie told Mitchell to come to his office. Just a few years younger than Eddie, Mitchell looked like he was from somewhere else entirely. Unlike Eddie and Allen, who shared their father’s bandyish looks, Mitchell looked like a Tawil, his mother’s side of the family. He was lanky with a hatchet-head nose. His spectacles were thick as a windshield. Mitchell shared Rose’s no-nonsense approach to life and business. He had little patience with his brother’s half-drunk histrionics. Mitchell wanted to make a living. "You’re taking over Crazy Eddie’s," Eddie said to his brother. When. Mitchell demanded to know what was going on, Eddie barked, "None of your goddamn business."
A terse announcement came in December: Eddie was resigning as president, effective the end of the year. Soon after, he resigned as chief executive officer. Even inside the family, there was little word from Eddie. Then he popped up in April 1987, announcing that since he still retained the title of Crazy Eddie president, he was firing his father (Sam M.), his brother Allen, and his mother-in-law, Lillian Rosen.
"Our father!" Mitchell raged. When Mitchell found out Eddie had fired Sam, he stormed the hallways of the Edison headquarters, bellowing, "Let the mountain come to Muhammed! Let the mountain come to Muhammed!"
"Pop has always been jealous of me," Eddie said to Sammy over drinks. "Because I’ve been successful where he wasn’t. He
does window dressings; he collects money from his little circle of stores. I own 30 stores. There’s no comparison. It kills him to know that I’m more successful than him. Mitchell needs to face reality."
To replace the irreplaceable Eddie, the remaining board members formed an "office of the president." Mitchell, Sammy, and Dr. Isaac Kairey would together serve as a composite president. Kairey had joined the Antar fold in 1979, when he persuaded Eddie to help fund the shady, soon-to-be-bankrupt University of St. Lucia Medical School, located in the Bahamas. But the boys were losing ground by the day. During spring 1987, CRZY stock tumbled past $10 a share. It didn’t stop until it hit $6.
Fraud was no fun. With the fiscal year-end careening down the pike, and the stock in single digits, Sammy had no time to fool around with inventory. "We needed 40 million dollars, and we found about half of it in the form of debit memos." The debit memo is an invoice retailers use to charge part of their advertising expense to manufacturers’ accounts. Sony, for example, had helped finance a series of Crazy Eddie ads that prominently featured Sony products. Any kind of volume discounts or promotional discounts would also find their way into a retailer’s books as debit memos. In the right hands a debit memo was as good as cash. "Worse comes to worse," Sammy figured, "we’ll have to give an allowance if some of the memos are challenged. No big deal. The thing about debit memo fraud"—the aspect that Sam unapologetically relishes—"is that you can’t hide the debit memo from the auditor. It has to be there in order to be part of your accounting system. It’s fraud in plain sight. Right in front of their eyes."
While analysts read the Crazy Eddie annual report with their fingernails in their teeth, Sammy and Mitchell Antar counted their blessings. Earnings were down by 20 percent from 1986 and falling. However, the chain was showing a pretax profit of $10.6 million. Sales were still healthy, with a 34 percent rise approaching $300 million. But the sales jump came from 13 new stores. The important comparable store numbers—the ones Sammy had been so desperately subsidizing all year long—were lagging by 19 percent in the fourth quarter and down 2 percent for the year. Oh well, Sammy thought, on to the next hole in the road. . . .
Could there have been a better challenger to the rowdy Eddie Antar than Elias Zinn, a consumer electronics overlord from Houston? In 1974, a born-and-bred-in-Texas entrepreneur named Elias Zinn decided he’d rather run a business than study business at the University of Texas at Austin. In partnership with his father and two brothers, Zinn built a chain called "Custom Hi-Fi Shops" with 72 stores strong across the Southwest. But a family feud erupted in 1981 and Custom Hi-Fi was thrown onto the bankruptcy altar. Zinn’s determined, some said blustering, approach to business had occasioned disaster and triumph in various degrees. In 1989, as he revved up once more, Zinn certainly had some stories to share with Eddie Antar.
Entertainment Marketing Inc. (EMI), the company Zinn created in the wake of his family debacle, had zoomed from $747,000 in 1984 sales to almost $90 million by early 1987. Still Zinn could not turn a profit. That was because he’d blown millions on a television venture called the Consumer Discount Network. Zinn, an ample-gutted braggart with enough money to pursue his goofiest ideas, envisioned a new form of programming: soap operas and sitcoms in which the principal characters also hawked some product or another. CDN would be like the Home Shopping Network, but with skits, little stories, built around each sale. The idea bombed, though in these days of product placement and movies starring toys, it’s hard to know why.
Zinn’s EMI was headquartered in Houston, occupying a 315,000-square-foot building that had once belonged to a Toyota dealership. Zinn himself lived in Manhattan, mainly because his wife, a dentist he met on a blind date in the mid-70s, despised the Gulf Coast. Itching to get into the Manhattan retail scene, Zinn flipped when he realized that Crazy Eddie’s was a takeover waiting to happen. The family turmoil and anemic stock prices made the Antars an irresistible target for an economic poacher. "Before I made my move on Crazy Eddie, I visited everyone except my rabbi," Zinn joked. On the list of visits, he included a friend at the Palmieri-Oppenheimer fund. Victor Palmieri’s management consultants were known as "turnaround artists," famous for coaxing Penn Central out of a financial coma, rebuilding Levitt Homes, and for handling a $600 million chunk of the Teamsters fund. The Oppenheimers were also known for underwriting the initial public offering of the stock called CRZY. Victor Palmieri’s new venture was flush with $100 million in cash and, like Elias Zinn, Victor was aching to deal.
"Look," Zinn told Victor Palmieri, "these Antars are in trouble and they want to take the company private again. If we get in now, we make some cash on their move. Worst comes to worst, we’ve got a hot property for the turnaround department. I’ll feed the stores with my warehousing connections." With Oppenheimer-Palmieri’s backing, Zinn bought 450,000 shares of Crazy Eddie stock, 7 1/2 percent of the outstanding shares, for $17.5 million. The partnership also tendered an offer to take over the company at $7 a share.
Eddie invited Victor Palmieri and Elias Zinn to Crazy Eddie headquarters for a sitdown. It was a tense, hot afternoon in July. Elias Zinn arrived sweating profusely, tieless, awkwardly smoothing his plaid shirt over a substantial belly. While they waited for Eddie, Zinn jokingly called the meeting "a showdown." Eddie, in prime business-ninja mode, shook hands with Palmieri, nodded to Zinn, and announced, "Mr. Palmieri, I don’t think you know what you’re getting into."
The scent of a takeover deal drove stock analysts to start digging at the CRZY financials. It didn’t take much exertion to uncover Eddie’s doings. Wall Streeters learned that just before Eddie disappeared in the fall of 1986, he had quietly sold 1.5 million shares of his stock. Eddie pocketed $21 million in cash on the sale. Over the three years since the company went public, Eddie had sold 6.5 million shares, hauling away more than $74 million in investor funds. Most shareholders, by contrast, had spent the same time period watching their paper fortunes crumple into losses.
A slew of shareholder suits was filed against the Antar family. Meanwhile, Elias Zinn was gathering proxy votes by the thousands. Eddie and Sammy tried to shoot back. With tentative backing from the Canadian-based Belzberg Brothers, they mounted a counter-offer to Zinn’s greenmail: $8 a share. Zinn promptly matched the offer.
As August steamed the streets of Manhattan and the word on Eddie turned more ill by the day, Sammy withdrew the takeover bid. The Crazy Eddie board told Elias Zinn to proceed; he had himself a company. Zinn’s chuckles couldn’t have lasted long, though. October 1987 reports showed Crazy Eddie posting losses of $8 million, 26 cents a share.
Eddie was doomed because he had nothing to fight with. He’d cashed in most of his stock and alienated all his natural allies. Like the hapless villains in Creepshow
and Tales from the Crypt
, Eddie Antar fell victim to his own scheming—he had become incredibly rich, but he was losing everything in the process. Sooner or later, he knew, somebody was going to try and put him in jail.
Meanwhile Sammy and the boys had to move. They spent days rearranging, misarranging, and editing—that is, shredding—files. After a while, if Sammy thought something in a file might raise questions he unceremoniously chunked it into the giant gray can beside his desk. He wasn’t even looking at most files, just chucking them. "About nine days after they won the proxy fight," Sammy says, "Zinn sent his people to the office. They took over the company at three o’clock. I got my pink slip at six o’clock. I was out on my backside. That was after 16 years I’d worked there. My adult life. I was devastated. From the age of 14 to the age of 30, that was my entire life."
Bob Marmon, a cocky, fast-talking turnaround artist who’d been with the Palmieri Group for about 10 years, arrived from Rhode Island with one day’s notice of his new assignment. Marmon was tapped as the new CFO, taking Sammy’s place in the financial driver’s seat. He’d been hastily scanning Crazy Eddie annual reports on the plane and still clutched a stack of them when he was nearly knocked down in the Edison headquarters lobby by Sammy Antar. Sammy was weebling toward the door, dragging a suitcase on rollers. "I recognized Sammy from the files," Marmon says, "so I and stepped over to introduce myself. He said to me, ‘When the investors start yelling, you tell ’em fuck off. Give ’em ten cents on the dollar.’ Then he was out the door." Marmon had worked on some of Palmieri’s most fabled turnarounds, including Penn Central. In short order, the feisty cost-cutter went to counting his toys.
In a couple of weeks the preliminary audit team came back with word—the company is not only in bad condition, it’s in terrible condition. Offhand the reviewers guessed, from their brief glance, inventory was short by $40 million to $50 million. The official numbers finally came in at $65 million, which was later revised to $80 million. Victor Palmieri, the new and increasingly uneasy chairman of Crazy Eddie’s, explained, "We inherited the worst-managed company in the U.S., due to both incompetence and corruption within the organization. All of the old management’s figures are suspect."
Palmieri went calling on every banker he’d ever done business with, pleading for help. He secured new lines of credit and consulted with Zinn and Marmon on "getting the company lean." Corporate headquarters was moved to a smaller warehouse, and Eddie’s palatial digs in Edison were put up for sale. More than 2,500 workers were laid off. Salespeople were placed completely on commission. The 80-car Antar auto fleet, including Jaguars, BMWs and limousines, was sold off. (There were three cars registered to Sam M., who has never driven a car.) Zinn held morning pep talks in an open end of the warehouse, and passed out "rah-rah" buttons, emblazoned with cheery motivational slogans like I Can, You Can, We Can
. "When you get up in the morning," Zinn told the turnaround team, "I want you to wear your attitude."
To Victor Palmieri and the business press, Zinn crowed, "We’re going to make money next year. Not much, but we’ll turn a small profit in 1989. And after that, we’ll see." But everybody knew they were just holding the patient’s hand. The Crazy Eddie work force was not only losing morale; since many of them were stockholders, they were losing their shirts, their
savings, their dreams. Howard Sirota, who led the fight to recover shareholders’ losses, says Eddie as usual bullied his way into riches, often hurting those who could least absorb the hit. "The company encouraged clerks who worked in the stores to buy stock with their retirement funds, while Eddie was selling his," Sirota laments. "It was already a $200 million fraud and they (the Antars) also took some poor schnook’s $5,000."
Next, as Sammy remembers it, "All of a sudden on a Friday afternoon I get this fax. It’s addressed to our general counsel, Solomon Antar. From the SEC. ‘Thank you for the conversation that we had,’ it says. ‘We now require these documents’—and they list off a bunch of them. And I know from looking, it’s the right ones they’re asking us for. They were looking at the debit memos and also at the Wren deals. So I called Solomon, who is my uncle Sam’s cousin, and Solomon says he doesn’t know what the hell is going on. He says this new SEC lawyer named Ric Simpson called him up out of the blue. Then he says, ‘Arnie Spindler’s been talking.’"
"See, the papers the SEC wanted were all part of our working with this one buyer, Arnie Spindler. And I said, ‘Oh God! This guy has ratted us out to the SEC.’ Arnie had been under some investigation himself. So he says to the SEC, ‘I can point some people out to you who are doing things much worse.’ I wasn’t completely surprised. Arnie had approached me just before we lost the company to Palmieri. He’d been with us since the first days, when there were two or three stores. He’d helped work on the inventory numbers in the past, and he was worried, about his future. Arnie was good friends with Mitchell and Allen, and so he was worried that with the feud going on, Eddie would try to force him out, too."
Arnie said, "I want $100,000 in severance to leave the company. Otherwise I have plenty of stories to tell should the right people come knocking." Sammy tried to get Eddie to make the payoff. "I said, ‘Arnie’s gonna rat us out,’ but Eddie, he said, ‘Arnie ain’t ratting us out. He can’t do that unless he rats out his best friends Mitchell and Allen too. He’s never gonna do that.’"
But Eddie was wrong. Arnie ratted. With some notion he could pick and choose the people he would squeal on, Arnie Spindler told the SEC that Sammy and Eddie were running a racket. "But not the rest of the family. No one else knows." Arnie assured the SEC prosecutor, Ric Simpson, "Mitchell doesn’t know. Allen doesn’t know. Sam M. doesn’t know. There’s no reason to go after them." However, Simpson wasn’t going to have the bounds of his inquiry set by an informant. He promptly served notice on the entire family. The old man confirms, "Arnie went and talked to the feds because he thought he was doing us—me and Mitchell and Allen—a favor. He thought the SEC would sweep out the bad guys, we’d take the company back, and everything would be settled."
Bob Marmon was furiously tapping numbers into his computer. "I finally determined that we could make this operation work with eight stores or with 75 stores. But not with 25 or 30 stores. Either you have to be small, direct and simple. Or you have to go huge, attain full coverage of your territory, grow tons of volume. It won’t work in between."
Crazy Eddie’s was through. The Antars had handed Elias Zinn yet another defeat and made Palmieri-Oppenheimer’s maiden
investment a wreck. By June 1988 suppliers were demanding that the company liquidate itself so it could pay the $860,000 it
owed for merchandise and services. Jerry Carroll, closing a 17-year chapter in his career, roared his insanity one last time
between reruns of M.A.S.H.
and the nightly news, announcing that the king of discount electronics had hit ROCKBOTTOM!
There wasn’t much left in the stores besides demo models and random accessories, but folks came to paw over the refuse and
wonder what had happened to their store.
Discount Store News
struck an elegiac note: "So the chain that virtually invented electronics discounting died an ignoble death, with creditors hovering over the remains, only to find that there was even less left than had been imagined."
Bob Marmon shipped off to his next Palmieri-sponsored turnaround. Elias Zinn went back to Texas. Crazy Eddie’s now sat beside the Consumer Discount Network and Custom Hi-Fi as the third multimillions disaster occasioned by a man who claimed he was a profit-pinching genius.
Sam M. and Mitchell kept telling the SEC that if somebody was phonying the financials, it was probably the Chief Financial Officer, Sam E. "Sammy" Antar.
Eddie Antar told his cousin, "You’re on your own."
Members of the Antar inner circle—Sam M., Eddie, Mitchell, Allen, and Sammy— were spending lots of time with lawyers
and investigators. Ric Simpson, who had just joined the Commission’s legal department and had drawn a doozy of a first case, hoped if he kept stirring something would float up. Using Arnie Spindler’s info on the warehouse frauds, Simpson asked, Did you ever alter your inventory? Did you ever make an arrangement with another company to "borrow inventory"? Did you use money from wholesale transactions to boost your retail sales reports?
The Antars answered, "No, no, no."
When Sam, the old man, was forced to admit his repeated untruths in federal court, he declared, "You are 1,000 percent right. You can show me 29 books of depositions. I did lie, I did lie . . .," adding with vehemence and balled fists, "But I am not lying now." Sam M. huffed that he’d skimmed millions of dollars in five decades of business, but never took one cent from Crazy Eddie’s after 1976, so that he could take the family legit. However much he’d sinned in the past, Sam swore he was clean now. "I lied, I lied, I lied, I lied, I lied, I lied. But then I rescinded the lies and told them the truth. That is all I did."
As New Year’s 1990 approached, Bob Marmon was throwing out the last boxes from the chain’s warehouse and the SEC was charging Eddie with fraud, specifically for falsifying financial reports and insider trading. A federal judgment demanded that Eddie bring back $50 million he was keeping in Israeli banks until an official inquiry could determine what had happened to his investors’ money. After several months of fruitless haggling with this inveterate haggler, U.S. Attorney Dan Gibbons ordered Eddie to appear in court on February 10, 1990 and explain why he shouldn’t be charged with contempt.
Eddie didn’t show up for the court date, so a warrant was issued for his arrest. after a couple of days he surrendered to the federal marshal and was brought before the court. But the judge assigned to his case was away on vacation, so Eddie was released—on his own recognizance —until after the judge’s holiday. The judge returned promptly but Eddie never did.
Eddie shaved the dense black beard he’d worn virtually his entire adult life and picked up a passport in the name of David Jacob Levi Cohen. He’d been using an alias passport for several years, under the name Alexander Stewart, but the alias wasn’t enough. An Israeli passport by law lists every known identity of the holder. So the name "Eddie Antar" was right there on the document. In planning for his rainy day, Eddie had traveled to Brazil a few years before and picked up a black market passport in the name of David Cohen. Next, he’d obtained his Israeli passport, with David Cohen as his "real" name. So when the time came, David Cohen casually boarded a plane to Israel while federal agents scoured New York and the Jersey coast for Eddie Antar.
In the town of Yavne, near Tel Aviv, Eddie set himself up in a luxury townhouse. Thanks to several decades of seeding, Mr. David Cohen had plenty of money to draw on. Besides Israeli banks, there were funds in shell companies around the world, and the requisite numbered accounts in Switzerland. Eddie could access more than 20 sources for cash: through coded accounts, business accounts registered in Liberia or Gibraltar, personal accounts in the names of his several aliases, including those in other (real) people’s names, like his uncle Murray Tawil, and his friend Harry Shalom. Prosecutors later observed that while on the run, "Eddie Antar played bank accounts the way Heifitz plays the violin." Besides David Cohen, Eddie impersonated an army of alter-egos, including Alexander Stewart Israel, Shalom Harry Page, David Boris Levy, Carl M. Kabbani, Eddie Sam, and Jake Levi.
Eddie wasn’t exactly partying during his run. He was angry, depressed, scared. For the first time ever, the swaggerer couldn’t hide that he was scared to death. He slouched around a dirty apartment, stepping over soiled clothes and crumpled bags of takeout food, drinking a quart of vodka a day. An old friend who ran into Eddie in Jerusalem said, "He was presenting himself like the Pitiful One, like a character from the Yiddish theater, the slumped, round-shouldered lost little man. He was looking for sympathy, but as far as I’m concerned, he was just playing a role."
When Eddie disappeared, Sammy panicked. He told his lawyer, Anthony Mautone, "I cannot go to jail." Mautone approached U.S. Attorney Dan Gibbons and offered Sammy’s cooperation in exchange for immunity. Gibbons, a harsh, unbending prosecutor, said no way. He had little use for a witness who wanted to recant two years worth of lying and join the good guys, expecting a free ride. Gibbons said Arnie Spindler, the first Antar insider to jump ship, was telling him a completely different story. Arnie said Sammy and Eddie were running the fraud on their own, keeping the rest of the family in the dark.
"He didn’t believe me," Sammy says, "and besides, he still thought he was gonna make the case with no deals, take down the whole dirty bunch of us."
On June 21, 1991, Sam M. Antar received a fax at his home. The text, all caps, read:
TO SAM M. ANTAR, FAMILY PATRIARCH, BULLSHIT PHILOSOPHER, RELIGIOUS HYPOCRITE, FRAUD, CHEAT, CO-FOUNDER, EXECUTIVE VICE-PRESIDENT, MEMBER OF THE BOARD, MAJOR
STOCKHOLDER, DEFENDANT, PRIME TARGET OF FEDERAL INVESTIGATION, AND GENERALLY ALL-AROUND SCUMBAG.
Salutations aside, the writer got to the point, still ranting in capital letters.
YOU OLD GOAT! YOU TRIED TO DESTROY OTHERS TO COVER UP YOUR OWN FRAUD! BUT YOUR CORRUPTION TURNED RIGHT AROUND AND BIT YOU IN THE ASS. THE BIGGEST SURPRISES ARE YET TO COME. YOU ARE ALL ABOUT TO GET YOUR "EQUITABLE DISTRIBUTION." A NEW PITCHER IS COMING TO THE MOUND. SO, ALL GET READY FOR YOUR THIRD STRIKE. HAVE A HAPPY SUMMER. THE FORECAST IS THAT THERE WILL BE PLENTY OF HEAT, SO BE PREPARED TO SWEAT A LOT.
There was no signature. A phone number showed the message was transmitted from a store in the capital city of Panama, where the Bank Leumi held several cash accounts in various Antar names.
Shortly after the old goat received his fax, Dan Gibbons was replaced by Paul Weissman as the Crazy Eddie prosecutor. The Mad Faxer obviously knew what he was talking about when he said a new pitcher was stepping to the mound. Weissman was ready to talk. No promises, Weissman said to Sammy, just a talk. After an hour’s bantering in the U.S. Attorney’s office, Weissman liked what he heard. Their meetings went on for two years—Sammy explaining the frauds, Weissman and FBI Agent Paul Hayes shaking their heads.
Thanks to this beautiful friendship,Weissman had a few documents and plenty of expert accounting analysis, but he hadn’t achieved legal proof yet. Because Sammy had shred large holes in the paper trail, he did penance by filling in those holes with convincing testimony. Gesticulating wildly, careening from one thread to another in his tale, the Antar nerd let loose on his crooked family during hours of testimony and cross-examination.
For his official punishment, Weissman offered Sammy six months house arrest. For his 1200 hours of community service, Sammy decided to work as a tutor for children with attention deficit disorder (ADD). He still does the tutoring nearly ten years after fulfilling his sentence. "I have a son with ADD. It’s some good I can do. After 30 years of being a son of a bitch."
He sounds impressively remorseful, but even so, squealing wasn’t Sammy’s first choice. He says he could’ve easily been swayed if his uncle had not behaved so cluelessly. "With all that money he was sitting on, why didn’t he take care of me? It would’ve been simple. And cheap, relatively speaking. A couple million dollars. But he never did. The only time I heard from him was after I’d made my deal to testify. He called me up at two in the morning, and said he had a bone to pick with me. I told him to get fucked, because I was having a fight with my wife. I had better things to do."
Sam M. thought his ratting nephew was the Mad Faxer. It was keeping him up nights, so he’d called for a confrontation. As Sammy recounts, "The phone rang again, and he said, ‘Do you want to keep on living?’ I told him, ‘You’re pathetic. Find something better to do with your time.’ The third time he called back, I said, ‘Take these threats to the FBI. I got no time for you.’"
Two years after Eddie jumped bail, Israeli police waited for him at his favorite convenience store in Yavne. When he drove up to get his morning paper, three men surrounded him and put him in cuffs. He was taken to a jail in Tel Aviv to await extradition. As Eddie was ushered to his quarters, inmates craned their necks to get a look at the infamous American criminal. Someone who’d spent time in New York began clapping his hands and singing the old doo-wop commercial:
When you think you’re ready,Come to Crazy Eddie. . .
Rounding up Eddie didn’t qualify as Mosaad-worthy detective work. He’d moved freely about Tel Aviv and made several trips to Europe during his time on the lam. The lease for his apartment was signed in the name of Alexander Stewart, whose passport listed "Eddie Antar" as his given name. Perhaps Eddie hadn’t been so hard to find after all. The U.S. government was only waiting for Sammy Antar to build their case.
Sam M., meanwhile, was becoming more cooperative with Weissman’s team. But only to a point. The old man now admitted that, yes, he and Eddie had skimmed money from the Crazy Eddie stores and smuggled that money to Israel. "But only until 1976," he swore. "After that we never took a penny, because we wanted to be straight so we could take the company public." All of his nephew’s stories of skimming less each year to build up the IPO were "malarkey," Sam M. complained, wincing. He even produced an amended 1040, showing that he’d declared the skimmed income and paid taxes on it. "The IRS can’t touch me!"
The Mad Faxer soon rang Sam M.’s number again:
I JUST READ THE GOAT’S AFFIDAVIT AND NEARLY FELL OFF MY CHAIR. YOU STUPID MORON. EVERYBODY KNOWS THE HYPOCRITE YOU REALLY ARE. YOU’VE GRADUATED FROM RELIGIS HIPOCRATE TO ALLROUND HYPOCRITE. HOW DOES IT FEEL TO EAT YOUR OWN SHIT AFTER YOU GAVE IT TO EVERYONE ELSE FOR SO LONG TO EAT? . . .
YOU WERE SO FUCKING ARROGANT THAT YOU LET A DROOLING CHERA RETARD STOCKBOY FORCE YOU OUT OF YOUR FOXHOLE.
"Chera," according to a family member, "is a person with no class, kind of trashy. It wouldn’t be a very nice thing to put in a book." It’s an Egyptian surname, like Smith, or Jones, or Snopes. It’s usually spelled Chira
Sammy wasn’t the Mad Faxer. Who then? Eddie? The charming dispatch, awash in images of excrement and vomit, continued with references to the divorce suit which Debbie 1 was pressing against Eddie:
EACH AND EVERY ONE OF YOU WHO OPENED YOUR MOUTHS AND TESTIFIED AGAINST ME TO HURT ME WENT RIGHT DOWN THE TUBES OUT OF YOUR OWN MOUTHS. YES, RIGHT OUT OF THE BIBLE JUST LIKE PHAROAH. THEY CALL IT LOSHON HORAH [the evil tongue], RIGHT? IF ANYONE SHOULD KNOW ITS YOU.
MOVE OVER LEONA [Helmsley] AND MAKE ROOM FOR SAM. SO YOU’VE FINALLY DECIDED TO TRY TO BULLSHIT YOUR WAY OUT. WHAT A JOKE. I’D GIVE ANYTHING TO WATCH THIS FARCE. WELL MISTER WAKE UP AND LET ME TELL YOU SOMETHING, NOBODY IS GOING TO BELIEVE WHATEVER YOU HAVE TO SAY.
I JUST READ A GOOD STORY BY FRANZ KAFKA. IT’S CALLED THE PENAL COLONY. FOR THERE TO BE ANY JUSTICE AT ALL IN THE WORLD YOU MUST REALIZE WHY YOU ARE SUFFERING.
Eddie most definitely wasn’t a reader. Or a moral philosopher. So, Sam decided, Eddie isn’t the Mad Faxer. Nevertheless, somebody had a hold on the old goat’s harness and was yanking hard.
At trial in 1993, defense attorney Jack Arsenault explained to the jury that Eddie Antar’s family took advantage of a troubled man’s alcoholism and depression and turned the company criminal. "A family business became a corporate battlefield with boardroom intrigues, duplicity, hostility and distrust among family members," Arsenault said.The courtroom was packed with spectators and with an appropriately bizarre cast of litigants striding the stage. U.S. Attorney Michael Chertoff, assigned to prosecute the case alongside Paul Weissman, was known in the Antar corner as "The Wraith" and "Count Chertoff," for the way his long arms raked the floor and for the bruise-colored hollows in his cheeks.
"Obviously the Antars have fought internecinely for decades," Chertoff argued, but that hadn’t stopped them from opening businesses together, loaning each other money, and defending one another from outside attacks. When Eddie was returned from Israel in shackles, Sam M. sent a message: "He is my son. . . . All he has to do is pick up the phone and say, ‘Ma, Pa, help me.’" In time, and lacking money badly, Eddie did pick up that phone. Sam M. paid at least $5 million for Eddie’s defense.
Chertoff said once Eddie started inflating his earnings, he couldn’t stop. The Antar fiscal year always began in the red because of the previous year’s defalcations. "It’s like the high jump. Each year they had to raise the bar a little higher." Chertoff hauled in charts, graphs and family trees, anything to help the jury track the diverse cast and their devious turns in this soap opera of a scam. Bob Marmon, who ran the Crazy Eddie turnaround on Palmieri’s behalf, told the court what he didn’t
find when he arrived—namely $80 million in missing inventory—and what he did
find—a firebombed set of business records. The prosecution compensated for its documentary handicap with first-hand testimony from co-conspirators. A slew of former Crazy Eddie employees—Arnie Spindler, Abe Grienberg, David Neiderbach, Isaac Kairey, and of course, batting cleanup, Sammy Antar—told how they had personally altered documents and shifted inventories. The key point, Chertoff stressed with each witness, is that these people were operating at Eddie’s behest. Maybe the boss’s pen never smudged a 1 into a 4 on the audit reports, but Eddie directed and approved.
From his raised seat overlooking the litigants sat Judge Nicholas Politan, infamous in the New Jersey district for his unbending rule of the courtroom. Politan struck an imposing figure, with his heavy jowls and hard-bitten demeanor. He waded into Eddie with a vengeance. Several times, frustrated by the defendant’s belligerence and his lawyers’ legal sidestepping, Politan shouted down objections from the defendant’s table.
In June of 1993, the jury retired and spent six days reviewing what they’d seen. When they came back, they pronounced Eddie guilty of 17 counts of fraud. Mitchell was found guilty of three counts, and acquitted on two. Allen, always the most distanced from the Crazy Eddie mess, was acquitted of all the counts against him.
Arsenault said they’d immediately file an appeal, targeting Judge Politan for the belligerent way he’d governed the proceedings. At the sentencing hearing, Politan played into Arsenault’s hands. Crowning his trial-long impersonation of Judge Roy Bean, Politan took a final swipe at the Antar Complex:
My object in this case from day one has always been to get back to the public that which was taken from it as a result of the fraudulent activities of this defendant and others. We will work the best possible formula we can to be as fair as possible to the public. If we can get the 120 million back [the estimated losses to investors], we would have accomplished a great deal in this case.
Eddie’s defense team pounced. They chose to take the judge’s statements literally. "From day one
," they argued in their briefs, underlining Politan’s remarks for the appellate court. "He admits here that he had decided the defendant’s guilt at the outset."
The appeal, as promised, revisited day one
to show Politan’s tendentious state of mind. In early 1993 Eddie had appeared before Politan requesting that he be allowed to post bail. Never mind that Eddie had been hopping nations the last two years; never mind his several contempt of court citations. He wanted out. But Politan was hell-bent on one issue: $60 million he knew Eddie had bundled in offshore accounts. Politan told defense attorney Jack Arsenault straight up, "I want your client’s money."
As if tearing a page from Dickens, the defense revealed not only Politan’s mammonism, but his utter lack of compassion. While Eddie was on the run, Eddie’s middle daughter—Danielle, just short of her 19th birthday—was stricken with cancer. Eddie didn’t learn about the disease until he was already jailed. Politan had agreed to let Eddie visit Danielle in the hospital during pre-trial motions, but only for 30 minutes at a time. For transport to the hospital Eddie was shackled and led by deputies to his daughter’s bedside; the deputies unlocked the cuffs but stayed with him in the room. The visits were tense. Eddie tried to speak reassuringly. He told her he loved her, and tried not to cry until after the deputy led him from the room. Danielle replied in monosyllables, because of the pain and because she was furious at her father.
"We’d always been so close," Eddie said later. "When we’d go on trips as a family, to Europe several times, and to Israel, Danielle always wanted to stay in the room I stayed in. To her, my being in jail was an abandonment." Eddie wiped his eyes, and sobbed at the memory. "Here she was dying of cancer, and I was in jail. I couldn’t do anything about it. I couldn’t help her to die. That’s the worst part of it."
On the second day of her father’s trial, Danielle died. Dropping his pugilistic regard for once, Eddie pleaded with Judge Politan to be allowed to attend the girl’s last rites. The Antars were observing a traditional period of mourning called shivah
("the seven days") and Eddie wanted to be with the family at this most intense, private time. By custom the family retreats from social exchanges during the week of shivah
Eddie appeared before Judge Politan, asking for a week’s recess of the trial and permission to stay in his father’s house during that time. Judge Politan replied that "certain members" of the Antar family were suggesting Eddie’s presence might disrupt the proceedings. "Besides," Politan announced, "I still want to see that $60 million. Putting up the money as a sign of good faith
might sway an old judge’s heart. There is $60 million laying out there. . . . I won’t have any hondling
in my courtroom," Politan said, using a Yiddish word for bargaining. "There is $60 million out there that I’m aware of that your client has refused to sign over to the trustee. So we’re not talking about surety. Come on. Does he want to sign the 60 million over?"
"The price of my daughter is 60 million dollars?" Eddie shouted at Politan.
"Please sir," Politan urged.
"Please sir nothing," Eddie shot back.
"Please, sir," Politan repeated, "You’re out of order. It’s not a question of the price of your daughter. It is a question of the price of your flight, sir." Eddie refused to pay, so Politan denied his request. However, Eddie was allowed to attend Danielle’s funeral, where Debbie 1 met him with a hug and offered him a chair beside her and the four girls.
Eddie marked shivah
alone in his cell. His rabbi arrived the day after the funeral to perform the ritual Qerriah.
Eddie bowed his head while the rabbi ripped a piece of fabric from the sleeve of his prison coveralls. Together the men uttered, Barukh Dayan ha-emmet
("Blessed is He, the Judge of Truth"). Truly now Eddie looked like the Pitiful One, his eyes swollen and ashamed, his face taut, suffering. His beard bloomed thick and nappy from intentional neglect.
Meanwhile, the proceedings veered into absurdities. During the prosecution’s closing, Michael Chertoff interrupted his own remarks and asked for a sidebar with Judge Politan. At the bench, Chertoff complained that Jack Arsenault, seated at the defendant’s table, was "mugging for the jury." While Chertoff was making his case, he said, Arsenault "conducted a kind of pantomime of eye-rolling, head shaking, grimacing, et cetera. . . . I would ask the court to tell Mr. Arsenault not to eye-roll, head shake or otherwise gesture. . . . just to keep a poker face and—"
"Judge—," Arsenault interrupted.
"Liar’s poker," Judge Politan muttered under his breath.
All mugging for the jury aside, the appeals court bought defense counsel’s argument. Judge Politan’s remarks had given "the appearance of impartiality," the court ruled. In April 1995 the Third U.S. Appeals Court in Philadelphia overturned Eddie and Mitchell’s convictions. After tracking Eddie Antar across the world, spending years and thousands on his prosecution, the U.S. government was losing its man.
Both Eddie and Mitchell felt they had the wind behind them. They might actually see this through. One of Judge Politan’s last acts in the case was to forbid the Crazy Eddie jurors from talking to reporters. When the gag ruling was appealed and struck down, court records revealed that the Antar jury room had not been a warm, cuddly place to spend a week. In their first days of deliberation, the jury’s foreman sent a message to Judge Politan asking him to rebuke a member of their group, who’d become "nasty and screaming," refusing to cooperate with the others. After returning the guilty verdict, two jurors seemed to regret their decision. A woman called Politan’s office to say she hadn’t really been clear on the federal racketeering law and the judge’s instructions in that regard.
The Antar brothers told themselves they’d surely go free. But Weissman and Chertoff said, no way, we’re going back to trial. Eddie needed to realize that he had snubbed New York Money, he’d jumped bail on the U.S. government, he’d harassed Swiss banking authorities, and he’d held shouting matches with a federal judge. Michael Chertoff told reporters Eddie was "the Darth Vader of capitalism." The Count promised he’d haul Eddie and Mitchell back into court, and win, unless their lawyers anted up. Eddie would get credit for the time he’d served since his return from Israel. Mitchell would probably draw about 10 months, the same amount of time he’d spent in jail since the first trial.
Finally, in the closing days of summer 1996, ten years after he resigned from his company and consigned it to a tailspin from which it never recovered, Eddie admitted he defrauded his investors. He was led from the courtroom owing $150 million in fines and restitution, not counting the judgments mounting against him in civil decisions, which would eventually exceed $1 billion. In February of 1997, Judge Harold A. Ackerman of the New Jersey District Court sentenced Eddie to six years and 10 months in the federal penitentiary. At the Otisville prison, Eddie often worked 11 hours a day, helping to prepare kosher meals for the facility’s Muslim and Jewish inmates.
BOARD CHARTER Board of Directors Cochlear aims to have a Board of an effective composition, size and commitment to adequately discharge its responsibilities and duties. The Board of Directors currently comprises six independent Non-Executive Directors, including the Chairperson and one Executive Director, the Chief Executive Officer/President. A majority of the Board must be inde
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