Crazy Eddie's Insanely Successful Criminal Enterprise

Jsmilla via YouTube
Jsmilla via YouTube

For anyone living in the New York metropolitan area throughout the 1970s and 1980s, Crazy Eddie was inescapable. A chain of electronics stores that eventually spread to 43 locations across four states, the business bombarded consumers with print, television, and radio ads that guaranteed name brand products at major discounts. Disc jockey Jerry Carroll taped more than 7500 of the radio and television spots as a hyper salesman who promised that Crazy Eddie’s prices were “insaaaaane.” At one point, the stores had greater name recognition among New Yorkers than Ed Koch.

Koch was the mayor of New York at the time.

“Crazy Eddie” was Eddie Antar, the grandson of Syrian immigrants, who started a modest stereo shop in Brooklyn and parlayed it into a retail empire grossing $350 million annually. In addition to changing how electronics retailers advertised—pushing price above all else—Antar also paid his employees off the books, failed to report cash purchases, kept the sales tax, and later migrated to $145 million in securities fraud when his cousin, Sam Antar, graduated from college as a Certified Public Accountant (CPA).

“The whole purpose of the business was to commit premeditated fraud,” Sam tells mental_floss. “My family put me through college to help them commit more sophisticated fraud in the future. I was trained to be a criminal.  

“People have a certain idea of Crazy Eddie. In reality, it was a dark criminal enterprise.”

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A high school dropout at the age of 16, Eddie Antar wasted no time in exploiting the burgeoning world of consumer electronics. It was the late 1960s, and smaller, more portable transistors were about to usher in a new wave of products that would make Japanese brands like Sony and Panasonic household names. Before long, video game systems, VCRs, and camcorders would expand the market.

Initially, Antar sold televisions from a small stand at the Port Authority, grabbing attention by talking fast and eventually wearing customers down. “He was like Fonzie,” Sam says. “Very charismatic and very smart. You steal more with a smile than you do with a gun.”

By 1970, Eddie had learned from the failure of his first store, a tiny spot near Coney Island Avenue in Brooklyn dubbed Sights & Sounds ERS, and secured a better location for an outlet that he owned with his father, Sam Antar, and cousin Ronnie Gindi. The “crazy” adjective came from a customer who took note of Eddie’s salesmanship practices: He’d playfully bar patrons from leaving empty-handed and take their shoes as deposits for stereos; he even promised discounts to people who braved winter blizzards. Word spread of Eddie’s theatrical approach. More importantly, people began to realize he was gleefully ignoring federal guidelines concerning pricing.

Fair trade laws meant that manufacturers could insist on one standard retail price for all retailers. In theory, this meant consumers would always get the “best” deal no matter where they shopped—but Eddie marked his merchandise down anyway. It was the only way he could compete with larger chains that had huge ad budgets. When manufacturers refused to sell him inventory, he’d get it from grey-market suppliers with items intended for overseas sales or other businesses that had excess stock. (Stolen goods were a rare source. “Too risky,” Sam says.)

How could he afford to do it? By stealing. “As a corrupt private company, we had the advantage,” says Sam, who began his career in the family business as a stock boy at the age of 14. “Back then, most customers paid in cash. If we don’t disclose the sale, we keep the sales tax. That’s a good cushion to be able to afford to beat the competition.” Cash revenue was kept under beds, in floorboards, or deposited into Israeli banks.

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Despite Eddie’s covert criminality, his opposition to fair trade practices made him a hero in the eyes of consumers. In 1976, the remaining holdout states repealed the law, forcing manufacturers to sell to any retailer who could afford to pay their invoices.

While that may have leveled the playing field a bit, Eddie had another form of ammunition: advertising. Though his budget was small, the ad campaign cooked up by advertising director Larry Weiss featuring Carroll as a manic discounter was so memorable that Crazy Eddie’s name recognition began to surpass that of Coca-Cola in the tri-state area. Some local stations stayed on the air overnight simply because Antar had bought all the ad time. (According to Weiss, Eddie’s first spot on the radio cost $5. He never paid the bill.)

Between 1975 and 1984, Crazy Eddie recorded profits in the millions by using register skimming to under-report income; repair services were billed to manufacturers at three times their actual cost; and customers would often be flipped by one, two, or three salesmen trained in the Crazy Eddie method of coercion.

“You had one person with the customer, the Switch Over, or SO,” Sam explains. “The second would be the Take Over, or TO. If he failed, you’d call in the third, the NAD—the Nail ‘Em At the Door guy. It wasn’t just discounting. We tried to switch the customer to higher-margin items.” Sony, for example, might be a break-even sale; Crazy Eddie employees would try to convince customers buying a Sony receiver that they needed house-brand speakers or a subwoofer.

Some of this was plotted in a language unique to Eddie’s work culture. “We spoke a kind of Arabic pig Latin,” Sam says. “We had a dictionary that would be passed around. We wanted [employees] to feel like part of the family culture.” That culture that would soon grow to include securities fraud on a level never before seen in retail.

In 1980, Sam Antar graduated Baruch College of the City University of New York as a CPA and returned to Crazy Eddie full-time as its chief financial officer. By design, his education was to help the Antar family perpetuate fraud above and beyond skimming the register or selling inflated extended warranties.

In order to do that, they’d first have to go straight—even if it meant overpaying their income taxes. “We needed to report a higher profit before getting a higher public valuation,” Sam says. “So from 1980 to 1984, when we went public, that was my job. You legitimize the business in order to commit bigger fraud.”

By reporting sales previously conducted under the counter, Crazy Eddie was able to demonstrate growth even when sales were steady. They were also able to increase valuation by paying taxes well in excess of what they might have actually owed. “As an example, say we claim to sell $1 million with a 50 percent tax rate,” Sam says. “We pay $500,000 in taxes. If the company is trading at 30 times earnings, we’ve inflated the value—and it’s worth spending that $500,000.”

Crazy Eddie had another bit of misdirection prepared. At one point, Sam was able to secure a job with the company’s auditors without them knowing he still worked for the retailer. It helped to know auditor habits, like only looking at certain stores when conducting inventory checks. By boosting stock in those stores and claiming it was across the board, Crazy Eddie could claim $65 million in product they didn’t actually possess.

The amorality of the family business made for handsome profits. When Crazy Eddie went public in 1984, the stock shot from $8 a share to $79—and the Antars held much of it. More than $145 million was raised from investors who had no idea Crazy Eddie was misrepresenting its financial profile.

“We never spoke about right or wrong,” Sam says. “It was just the way we did things.”

Before long, some in the Antar family would speak up about their business practices. And when the finger-pointing was over, Crazy Eddie would find himself both in exile and owing $120 million in restitution.

Eddie Antar (R) after being arrested in Israel in 1992. Courtesy of Getty.

If it had been up to the auditors, Sam says, Crazy Eddie would probably still be in business. “They do the equivalent of finding typos in a Word document. They take a small sample and project it onto the financial situation as a whole. The companies they audit are called ‘clients.’ That language is important. It should be ‘target.’” Most fraud, Sam believes, is discovered by whistleblowers, not accounting firms, who he says employ young and inexperienced employees to navigate complicated financial inspections.  

That lackadaisical approach is what kept Crazy Eddie cooking books for nearly two decades. In 1987, after a steady decline in sales owing to other mass-discount retailers and overeager expansion, the company's stock price dipped, and the Antars found themselves subject to new majority shareholders who were puzzled by the imaginary inventory. Once the U.S. Securities and Exchange Commission got involved, it was a matter of time before Sam, Eddie, and Eddie’s father began vying for the best government deal possible while their franchise began to close its doors.

“There’s no better motivator than a 20-year prison term,” Sam says. He told the government the entire story, from the skimming to the stock fraud. “I didn’t cooperate because I found God. I cooperated to save my ass.”

Eddie Antar, who had fled to Israel for two years following the investigation, was extradited in 1992 and sentenced to 12-and-a-half years in prison in 1994; when his judge was criticized for bias that led to an overturned conviction in 17 counts including conspiracy and racketeering, he got eight years as part of a plea to avoid a retrial in 1996. Officials were able to retrieve more than $120 million in offshore accounts, which was repaid to investors. Because of his cooperation, Sam received six months of house arrest and the loss of his CPA license.

“It was really just the next business step,” he says. “I sold information to the government and got my freedom.”

After being released from his “vacation,” Sam began to get invitations to lecture at universities and private businesses about white-collar fraud. “My rap sheet became more important than my resume.”

He has since become a forensic accountant, advising businesses, law firms, and the FBI on the tricks used to perpetuate fraud on investors, all while stressing that he's not offering himself up as a “redemption” story. “It helps my credibility by not being apologetic for my crimes. Call me the criminal I was and probably still am. I might tell you I won’t commit another crime, but is it true? Or does it just help you sleep better at night?”

Sam hasn’t spoken to his cousin in years. (In 1994, Eddie told the Philadelphia Inquirer the skimming went toward a pension fund for workers and that his cousins were the “true masterminds” of the stock scam.) Jerry Carroll, who became famous for the television ads, has since adopted the habit of starting interviews by telling people he had nothing to do with the scheme. Citing “brand equity,” a licensee briefly tried reviving the brand in 2009, which Sam compared to resurrecting Enron. It never got off the ground.

In the end, Sam believes Crazy Eddie’s legacy comes down to two words: discount and fraud. For the Antars, no amount of legitimate success could equal the rush of beating the system.

“There’s a line in the Wall Street sequel about it not being about the money,” he says. And that was true. It was never about the money. It was about the game. And we enjoyed the game.”

10 of the Best True Crime Documentaries You Can Stream Right Now

HBO
HBO

Is the true crime genre going anywhere? Probably not. Since Errol Morris’s The Thin Blue Line premiered in 1988 and helped free an innocent man accused of murder, filmmakers and viewers have developed a bottomless appetite for movies based on true stories that shed light on some of the darker sides of the human condition. Check out 10 of the best true crime documentaries you can stream right now on Netflix, Amazon Prime, Hulu, and other platforms.

1. The Seven Five (2014)

Crooked New York Police Department cops get a filmed perp walk in this examination of the city’s infamous 75th precinct, which was a hive of corruption in the 1980s. Ringleader Michael Dowd talks about how taking money from drug dealers to offset his salary woes led to an increasingly complex and dangerous web of deceit.

Where to watch it: Netflix

2. Amanda Knox (2016)

College student Amanda Knox grabbed headlines in 2007 and beyond when her roommate, Meredith Kercher, was found dead in the apartment the two shared in Italy. What follows is a grueling path through an often-impenetrable Italian justice system.

Find It: Netflix

3. The Central Park Five (2013)

Director Ava DuVernay’s When They See Us limited series on Netflix has brought renewed attention to the Central Park Five case, which saw five minors wrongly convicted of attacking a jogger in New York’s Central Park in 1989. This feature documentary co-directed by Ken Burns, his daughter Sarah Burns, and her husband David McMahon examines the case, from the coerced confessions of the boys to their attempts to clear their names.

Find It: Amazon Prime

4. Long Shot (2017)

Though it’s more of a short film than a feature, this examination of Juan Catalan’s fight to be recognized as innocent of committing murder is notable for his attorney’s methodology: Catalan couldn’t have done it because he was at a baseball game. How they go about proving that turns into one of the biggest left-field twists you’re ever likely to see.

Find It: Netflix

5. Killing for Love (2016)

When married couple Derek and Nancy Haysom are found dead in their Virginia home in 1985, suspicion falls on their daughter, Elizabeth, and Elizabeth’s boyfriend, Jens Söring. Was Jens a co-conspirator, or just a pawn in Elizabeth’s game? Watch and find out.

Find It: Hulu

6. Brother’s Keeper (1992)

Before garnering acclaim for their Paradise Lost documentaries, filmmakers Bruce Sinofsky and Joe Berlinger captured this portrait of four elderly brothers living in rural Munnsville, New York. When one of them turns up dead, police believe it could have been murder. As one brother goes on trial, the others close ranks and try to keep family secrets from leaking out.

Find It: Netflix

7. Without Charity (2013)

In 2000, police discover a trio of construction workers have been murdered at an expensive home in Indiana. As police dig deeper, they discover the puzzling presence of Charity Payne, a woman who might have helped a group of robbers to break in and commit the murders.

Find It: Amazon Prime

8. Gringo: The Dangerous Life of John McAfee (2016)

Antivirus pioneer John McAfee reinvents himself in Belize, becoming an armed leader of a makeshift militia before later being implicated in the death of his neighbor.

Find It: Netflix

9. I Love You, Now Die (2019)

Teenagers in love Michelle Carter and Conrad Roy nourished their long-distance relationship via text messaging. But as Conrad’s mood grew darker, Michelle believed the best way to help her boyfriend would be to encourage him to take his own life. That dynamic sets the stage for a dramatic trial in Massachusetts that ponders the question of whether it's possible to be responsible for taking someone’s life via text.

Find It: HBO

10. Out of Thin Air (2017)

In 1974, two men in Iceland disappeared. A police investigation led to six men, who were all eventually sent to prison after confessing to murder. Decades later, new evidence casts doubt on their version of events—and whether they killed anyone at all. 

Find It: Netflix

10 Facts About Alcatraz

Robyn Beck, AFP/Getty Images
Robyn Beck, AFP/Getty Images

At 9:40 a.m. on the morning of August 11, 1934, Alcatraz's first group of prisoners—137 in all—arrived at the soon-to-be-infamous prison. For decades, it was known as the site of one of the most unforgiving federal prisons in the country. “Break the rules and you go to prison,” went one anonymous quote. “Break the prison rules and you go to Alcatraz.” But San Francisco Bay’s Alcatraz Island has a history that goes far beyond its infamy as a criminal commune. Check out some facts about its origins, its history-making protest, and signing up for a tour.

1. Alcatraz was a military outpost in the 1850s.

Described by Spanish explorer Juan Manuel de Ayala in 1775, Alcatraz Island is the Americanized name of Isla de los Alcatraces (Island of the Pelicans). Following the end of the Mexican-American War in 1848, California became property of the United States. In the 1850s, the island was earmarked by U.S. forces for a military citadel. Outfitted with more than 100 cannons, it monitored activity in San Francisco Bay to thwart foreign invaders looking to cash in on California's gold rush. (Later, it was used to discourage Confederates from trying to seize control of San Francisco in the Civil War.) That presence led to some federal prisoners being housed on site—a foreshadowing of the general-population prison it would one day become.

2. Alcatraz inmates were forced to build their own prison.

An aerial view of Alcatraz circa the 1930s
OFF/AFP/Getty Images

When the need for armed monitoring of the bay ended, the U.S. Army deconstructed the fortress, leaving only the basement foundation intact. From 1909 to 1911, the military prisoners were put to work building a new structure that would house disciplinary barracks for the West Coast. (That building is the one standing today.) The military transferred ownership of the island to the Department of Justice in 1933, which is when Alcatraz became synonymous with the worst of the worst, housing notorious criminals like Al Capone and George “Machine Gun” Kelly.

3. Life at Alcatraz wasn't always so bad.

Known as the “Rock,” Alcatraz developed a reputation for segregating America’s incorrigibles from the rest of the population. Sometimes, rules dictated that prisoners couldn’t even speak to one another. But conditions inside the prison weren’t as harsh as movies and television would later portray. Inmates often got their own cell, and some even asked to be transferred there because the potential for violent trouble was low. The reason some of the more notorious criminals of the era were sent there was usually due to the facility’s strict routine. Prisoners had little leeway or privileges outside of the four basics: food, shelter, clothing, and medical care. One perk? Hot showers. Inmates got warm water to use for bathing, although it wasn’t for altruistic reasons. A theory has it that if prisoners got used to warm water, they’d freeze up if they ever made an escape attempt in the bay’s frigid conditions.

4. Odds of escaping Alcatraz were slim.

Swimmers run across the water near Alcatraz Island
Donald Miralle/Getty Images

Many know the story of Frank Morris, John Anglin, and Clarence Anglin, who famously attempted to escape the prison island in 1962 using a raft made out of raincoats. No one knows whether the men made it, but the odds were stacked against them. Of the 36 men who fled from the site in the 29 years it was open (1934 to 1963), 23 were recaptured, six were killed by guards, and two drowned. The remaining five—including Morris and the Anglin brothers—made it to the water and disappeared.

5. Softball was a popular pastime.

Though Alcatraz would never be confused for a country club, inmates still had outlets to pursue physical activities. Softball was the most popular pastime, with prisoners using a diamond in the recreation area. Organized teams played using shorter innings; balls going over the barricades were outs, not home runs. But not every game went smoothly. The teams were integrated, and that occasionally to racial tensions. During one May 20, 1956 game, tempers flared and makeshift knives were pulled before guards could restore order.

6. Alcatraz's prison guards lived on the island with their families.

A camera peers through a chain-link fence inside Alcatraz
Justin Sullivan/Getty Images

Life at Alcatraz wasn’t isolated just for the prisoners. Guards and other prison employees lived on the island in separate housing that was once Civil War barracks. Their kids fished in the bay and passed time in social halls that had pool and bowling. Families often took weekend boat trips to nearby Marin to stock up on groceries and other essentials. While they were forbidden to make contact with inmates, a few made a spectator sport of watching new arrivals come in wearing shackles.

7. Alcatraz was closed in 1963 because it was too expensive to maintain.

Alcatraz didn’t get shuttered over human rights issues or because the prison was too hardcore even for society’s worst. It closed in 1963 for the same reason it was so distinctive: the location. Saltwater continued to erode structures, making the cost of maintaining the buildings excessive. On a day-to-day basis, Alcatraz cost $10.10 per person to maintain in 1950s dollars, three times as much as most other federal prisons. It also needed freshwater brought in by boat at the rate of a million gallons a week.

8. In 1969, a group of college students occupied Alcatraz in protest.

A man stands on Alcatraz Island during a Native American occupation
Hulton Archive/Getty Images

In 1969, a group of college students stormed the abandoned prison. Their cause: to draw attention to the United States government's policy of terminating tribal sovereignty and relocating Native American residents to cities. Richard Oakes, a student at San Francisco State College, led the occupation, which lasted a total of 19 months. Authorities moved in 1971 when the group—which was 400 strong at its height—had dwindled to just 15 people. During their protest, Richard Nixon reversed the policy in 1970, effectively ending government seizure of Indian lands.

9. Alcatraz is now one of San Francisco's most popular tourist attractions.

Alcatraz Island was converted into a park and made part of the U.S. national park system in 1972. If you want a tour, you can make advance reservations and book a ferry. Once there, an audio tour will take you through the grounds, including the cells of luminaries like Al Capone. More than 1.5 million people visit annually.

10. Alcatraz has literally gone to the birds.

Alcatraz sits in the background of two birds flocking nearby
Justin Sullivan/Getty Images

Without a permanent human infrastructure, Alcatraz Island has slowly been engulfed by nature’s squatters. One of the first sights visitors see is a surplus of Western gulls taking up residence on almost every surface. The park service even offers a tour of the avian life, which includes 5000 birds across nine different species. The population is fitting, since the prison’s most famous inmate is widely considered to the “Birdman of Alcatraz,” Robert Stroud. After being sentenced for murder, Stroud took up ornithology and was considered to be an expert by the time he arrived on the island in 1942.

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