Only in New York (Part 4)

Money don’t get everything it’s true, but what it don’t get, I can’t use ... The best things in life are free, but you can give them to the birds and bees ... Gimme money, that’s what I want; a lot of money, that's what I want...

So go the lyrics to the song “Money” by the rock group The Flying Lizards, a song that most of us would easily call funny, but few of us ever would admit to as honest.

For example, if you were posed the question “would you rather be rich, smart or beautiful?”, let’s be honest: even though we might be ashamed to admit it, most of us would choose rich.
Need convincing?

People will line up around the block to buy a lottery ticket for that big payoff, but lately I haven’t seen too many lines to get into libraries, or even bookstores unless, of course, Jennifer Lopez happened to be in there, signing autographs.

Not too many lines at health or fitness spas, either.

Yes, it’s all about dollars, euros, yen, pesos and pounds. It’s about gold and silver, stocks and bonds, CDs and mutual funds, 401Ks and IRAs, too. It’s property values, the Dow, NASDAQ and the S&P 500. It’s artwork and antiques, income, interest rates and inheritances. It’s dividends, discounts, royalties, rents, capital gains, commissions, trusts, depreciation, cash, coins, credits, tips and tax breaks. Whew...did I miss anything?

All coveted, just so we can buy stuff—more and more stuff. As Wall Street insider-trading scandal poster boy Ivan Boesky once remarked: “He who owns most [stuff] when he dies, wins.”

Some make money the old-fashioned way—they earn it. Some are in the lucky sperm club—they’re born with it. Some are the beneficiaries of the Grim Reaper—they inherit it. Some are lucky stiffs—they win it. And some are crooks—they steal it.
But to those who say money is over-rated… well, you’re also right.

Our health is certainly the most important thing in our lives. Lose your health and you’ve lost everything. And those who say money can’t buy happiness are also correct. Princess Diana was the epitome of this contention. Marilyn Monroe, too, was beautiful, rich and famous, but alas, a poster girl for misery.

Our families, especially our children, are priceless. Howard Hughes once remarked “everyone has a price,” but many of us would be hard-pressed to put a price tag on our friends—or even our pets, for that matter.
And how about your American citizenship?

Perhaps you’re a liberal to the left of Mahatma Gandhi, or a conservative to the right of Attila the Hun. Maybe you’re a red-stater or a blue-stater. A Republican or a Democrat. You love President Bush; maybe you hate him. You’re straight; you’re gay. Maybe you’re an atheist or an evangelical. You’re Black, White, Asian or Hispanic. You’re Catholic, Protestant, Jewish or Muslim. First and foremost, though, we’re all Americans, and most, if not all of us, would never forfeit our citizenship—our passports, if you will—for any amount of money.

How much money would you really need to live on? How much stuff do you really need to buy? How much better can you eat?
Is a million dollars enough? No? Well, how about 10 million? All right, then, 100 million. Surely that’s enough... OK, that’s enough—but please don’t call me “Surely” (ha ha).

Let’s fantasize just a wee bit longer...

You have your health, a loving wife and five wonderful children. You’re so famous that you’re a household name. You’re a genius who started with a dream and turned it into a reality. You’re a physically fit body-builder, thirty-nine years old, and have beautiful women falling over you. Despite not being all that good-looking, you are worth about 100 million dollars, which is enough to wipe the ugliness off an orangutan, if you ask me... and you have 80 cars, to boot.

But this is no fantasy character: this was Eddie Antar, the founder of the Crazy Eddie electronics chain, whose obnoxious but effective TV commercials in the ’70s and ’80s were a staple of life in New York and who, almost single-handedly, pulled off the biggest fraud ever in the consumer electronics industry.

The Crazy Eddie chain of electronic stores started modestly, with a single store in Brooklyn, New York (Part 1). Through a brilliant advertising campaign, well-run and well-stocked stores, the chain quickly grew into one of the largest retailers in the northeast, but also one of the largest in the US (Part 2). The chain was so successful that it went public in 1984, and the price of the stock skyrocketed (Part 3).

Looking back, though, and having dealt with the chain as Maxell’s Regional Manager at that time, this was not really a case of fraud, from my perspective, but a case of overwhelming greed that ultimately metastasized into an addiction.

After the company went public in September of 1984, Eddie sold nearly 6.5 million shares of Crazy Eddie stock, acquiring more than 74 million dollars in gains. If you were one of the lucky shareholders to have ridden the crest and got out, you also would have done well. But for those who stayed to the bitter end, the value of the stock eventually plummeted into the single digits.

By the late ’80s, Eddie had achieve a combined net worth that some estimate to be as high as 100 million dollars. A lot of money then, and a lot of money now. But for him it wasn't quite enough.

Having a wife and five children at that time—all girls—he once told me an unforgettable line: “If I ever go home and find the toilet seat up, it’s time to get a divorce.”

It was not the toilet seat that was up—it was the jig. And the music was stopped by a relative, who was also an employee, by the name of Arnie. It was Arnie who was threatening to sing like a canary to the SEC, unless Eddie “wet the beak” of this stool pigeon with a “severance package” of a mere hundred thousand dollars to keep from him squawking.

One hundred thousand dollars was chicken feed for fabulously wealthy Antar, but nonetheless, Eddie was sure “Arnie ain't never gonna rat us out.”

But Arnie would soon make a Dodo Bird out of Eddie, and perhaps Eddie should have paid Arnie his severance package—and his COBRA, too—for Arnie did “rat” to the SEC that the Crazy Eddie books were being grossly manipulated.

It only took a few weeks before the preliminary audit team came back with word that the company’s books were not manipulated, they were mangled. Past abuses were so flagrant that they discovered they bordered on the absurd (see Part 2).

At first the auditors guessed that the inventory was short by 40 million to 50 million dollars. When the official numbers were tallied, though, it was more like 65 million dollars. The final number, it was soon discovered, was more like 80 million dollars.

Victor Palmieri, the new chairman of Crazy Eddie’s after Eddie Antar resigned, called it “the worst-managed company in the US, due to both incompetence and corruption within the organization. All of the old management’s figures are suspect,” he cautioned.

Corporate headquarters, which had recently relocated from Brooklyn to Edison, New Jersey, were downsized to a smaller facility; 2,500 workers were laid off and salespeople were placed strictly on commission.

When the Crazy Eddie buyer mailed us (Maxell) a one-million-dollar purchase order for audio and videotape, I chuckled as I watched Mike Golacinski—my boss at the time and now President of Memorex—ceremonially tear it up in frustration and amusement that it wasn’t even worth the paper it was written on.

The Crazy Eddie employees were not frustrated or amused, however: they were mad as hell. Many of them were shareholders and were not only losing their savings, but they were also losing their jobs.

Their lawyer, Howard Sirota, who actually grew up in the same neighborhood as Eddie, led the fight to obtain a 42-million-dollar settlement in a class-action suit. Sirota said that Eddie, as usual, had 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 remarked. "It was already a 200 million dollar fraud and they [the Antars] also took some poor schnook’s five thousand dollars."

The SEC formally charged Eddie with fraud, specifically for falsifying financial reports and for insider trading. A federal judgment demanded that Eddie repatriate the 50 million dollars he was alleged to be keeping in Israeli banks. After months of stalling, Eddie was ordered to appear in court on February 10, 1990, and show cause as to why he shouldn’t be charged with contempt.

Eddie was a no-show that day, and immediately a warrant was issued for his arrest. He soon surrendered to federal marshals and was brought back 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 returned. The judge did return, relaxed and tanned, but Eddie… well, he decided to take a permanent vacation in Israel.

Eddie had traveled to Brazil a few years before and picked up a black-market passport in the name of David Jacob Levi Cohen. He’d been traveling with an Israeli passport for several years, under the name Alexander Stewart, but that alias wasn’t kosher with Israeli security. The government of Israel is very security conscious, so passports, by law, list every known identity of the holder. The name Eddie Antar was right there on his Israeli passport, along with the name Alex Stewart. Now traveling as the “newborn” David Cohen, Eddie simply shaved his thick black beard, left his wife, five children, friends, relatives and his country, casually bought a one-way ticket on El-Al Airlines, and took off for Tel Aviv.

David Cohen then set himself up in a luxury townhouse in the town of Yavne, just outside Tel Aviv, and never lived so well.

With an alleged 50 million dollars in Israeli bank accounts, not to mention the Swiss banks ones , Cohen had plenty of shekels to maintain a quality lifestyle. Eddie—I mean, David—it was alleged, also had funds in Liberia and Gibraltar, where he held personal accounts in the names of his several aliases.

Prosecutors later observed that while on the run, Eddie Antar had more identities than Sybil. David Cohen would occasionally still go by the name Alexander Stewart, as well as Israel Shalom, Harry Page, David Boris Levy, Carl M. Kabbani, Eddie Sam, and Jake Levi.

Eddie wasn’t exactly partying during his run, however. He was lonely, angry, depressed, scared and self-pitying. He would lounge around his unkempt townhouse, eating fast foods and drinking heavily. 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."

But Eddie, alias David Cohen et al, wasn’t fooling anyone, especially Israeli law enforcement. It wasn’t a case of Catch Me If You Can, with the FBI and Israeli Mossad in hot pursuit. Quite the contrary. It was more like Catch Me When You Want. The Israelis let him move freely about Tel Aviv and stood by and just watched as David Cohen made several trips to visit his bank accounts in Switzerland. The US Justice Department simply asked the government of Israel to wait for them to build their case.

They didn’t have to wait too long. On June 11, 1992, a federal grand jury returned a 19-count indictment against Eddie Antar, Mitchell Antar, Allen Antar and “Uncle Eddie” Gindi.

Almost two years after Eddie had skipped town, Israeli police greeted him at his favorite convenience store in Yavne, where he would go to get his morning paper. But Eddie never would get to see his mug shot in the afternoon edition. Three policemen arrested him without incident, put him in cuffs, and he was taken to a jail in Tel Aviv to await extradition back to the US.

As Eddie was led to his jail cell, word quickly spread among the prisoners that a big-shot American celebrity was in their company. One prisoner, who had once lived in New York, began clapping his hands and singing the lyrics of the Crazy Eddie old doo-wop commercial:

“When you think you’re ready, come down to Crazy Eddie…”

Not sure if he was singing it in English or Hebrew, but it was now Eddie who was singing the blues. After several proceedings in Israeli courts, Eddie finally waived extradition and returned voluntarily to the US to stand trial. This time, though, he wasn’t traveling first-class with thousands of dollars hidden under his clothes (see Part 2), he was shackled at the ankles and waist and frog-marched into the hands of US Marshals.

All four defendants—Eddie, his two brothers and an uncle—initially pleaded not guilty, but Uncle Eddie’s case was severed and he became a government witness at trial. The trial of Eddie, Mitchell and Allen Antar began on June 15, 1993.

The case against Eddie was thought to be a slam-dunk, and none other than our now-Secretary of Homeland Security, Michael Chertoff, was to be the lead prosecutor.

Eddie’s prices may have been insane, his fraud unrestrained, a guilty verdict ultimately obtained, but his conviction would not be sustained.

(To be continued)