I’m mostly a West Coast guy, but decades ago when I was in my teens my family lived in the Philadelphia area for a few years. I watched a lot of TV as a teenager, and even years after leaving the area there were a number of obnoxious commercials that stuck in my mind. They were for an electronics store called Crazy Eddie which featured a very loud and obnoxious pitch man shouting the store’s tag line: “Our prices are insane!” I also recall a lot of Christmas-themed commercials where the announcer was being bombarded with fake snowballs and usually began throwing them back. Although the Crazy Eddie chain was mostly New York City area, their commercials did have some reach into Philadelphia and they may have had a store there. Our family never shopped there; my father in particular was annoyed by the commercials and vowed he would never buy anything from them, regardless of the “sanity” of their prices.

Years later, while browsing Wikipedia in researching scams and confidence tricks (which fascinate me; see here, here and here for previous articles I’ve done on famous frauds), I happened to see a reference to Crazy Eddie, which had apparently been the subject of various criminal investigations and lawsuits. When I began reading I was amazed. Crazy Eddie was much more than a single crime or an isolated incident of financial fraud. It was a sprawling, multi-generational empire of highly organized deception, involving years of scams, millions of dollars, and a lot of interpersonal and international intrigue that was worthy of a spy novel. Both the boldness of the Antar family, who owned the chain in its heyday, and the gullibility of the rest of the world–particularly accountants and investors–are remarkable in their magnitude. The Crazy Eddie saga should be made into a movie. It would be billed as a true story, but probably no one would believe it.

 

 

Crazy Eddie’s “Christmas in August” events from the mid-1980s were among the most obnoxious of an already annoying ad campaign. Here are some famous examples from 1985 and 1986.

The incredible story of Crazy Eddie began in 1969 in Brooklyn, New York. Sam M. Antar and his son Eddie, together with a cousin, opened a small retail shop at 1117 King’s Highway, called Sights and Sounds, that sold electronics. The Antars–descendants of Syrian Jews who had fled persecution in Aleppo decades before–had been in the retail trade since the family first came to America. At first it was tough going. Laws in place at the time mandated that stores had to sell consumer electronics at the same prices, making competition on price impossible. This had the effect of favoring large retailers and driving smaller ones, like Sights and Sounds, out of business, because the big retailers could get breaks from manufacturers on bulk buying that the little ones couldn’t. The Antars, frustrated with the rules, began flaunting them. They started quietly undercutting the big retailers on electronics prices. A flood of loyal customers, eager to get TVs and stereos just a bit cheaper than at Sears or Monkey Ward’s, began to lift Sights and Sounds’s fortunes. In 1971 Eddie Antar changed the name of the store to Crazy Eddie.

By 1972 the “fair trade” rules that prohibited price competition were repealed at precisely the right time–leaving Crazy Eddie, the outlet that sold the cheapest, on the top of the heap. Sam began sinking his ever-increasing profits into an aggressive advertising campaign. The obnoxious announcer who so annoyed my father was Jerry Carroll, a former radio DJ who made a virtual career out of mugging in Crazy Eddie commercials. The aggressive ad campaign ensured that, among New York area consumers, the Crazy Eddie brand was as recognizable as Coca-Cola. The commercials even began to seep into popular culture in the 1970s and particularly 1980s. A Crazy Eddie commercial, for example, appears on a TV in the movie Splash.

What ultimately became an empire of fraud and crime had its humble beginnings in this unassuming building in Brooklyn. Once the Sights and Sounds store, it is now a bank.

But fraud and corruption were rampant in the company, even in these early days. Eddie Antar, now the company’s guiding light, was obsessed with earning profits at almost any cost. He began paying employees in cash, off the books, to be able to avoid payroll taxes. Considering that Crazy Eddie would not hire anyone who wasn’t either a member of the Antar family or “a friend of the family,” Eddie could ensure through familial connections that no one squawked. And, despite how low the prices were, Crazy Eddie was out to fleece its own customers as well as Uncle Sam. Salespeople were forbidden to allow customers to set foot outside the store without buying something. Sometimes salesmen literally chased customers into the parking lot. Repackaged or damaged electronics were wrapped up in fresh boxes to make them appear new and unopened. Though Crazy Eddie’s “we’ll beat any price” guarantee got feet into the door, pushy upselling usually resulted in the customer spending a lot more than they originally intended when they walked into the store. The company also cheated its suppliers and insurers in a myriad of ways.

But, for several glorious years, the fraud was working–and working big. The Antar family was rolling in cash. Members of the family cavorted in limos, the women sporting furs and flashy jewelry. The temptations to steal more became larger, and more of a headache. As Crazy Eddie’s diversified into outright tax evasion (concealing income), the family had to do something with all the cash. They started diverting it to overseas bank accounts, especially in Israel. Then in 1979 Sam and Eddie set their sight on a really big score. Why not take the company public? That way, instead of merely gorging themselves on receipts from customers and various cheats of manufacturers and wholesalers, they could add a hefty cash flow from investors as well.

 

Here is an earlier Crazy Eddie commercial, dating from 1978. This was the era when the company was “skimming,” but before the Antars embarked on their grand scheme to take the company public.

Going public, though, meant several years of preparation. The era of “petty” skimming was over, and in order to interest investors in buying stock, the company would have to post bumper profits over the next few years to show the market it was a growing concern. Eddie now began to sharpen what would become his secret weapon for big-stakes fraud: a savvy insider. Eddie approached his cousin, Sam E. “Sammy” Antar, who had worked for the company since 1971. The Crazy Eddie company paid for all of Sammy’s college tuition to earn a degree in accounting from Bernard Baruch College. The idea was to train Sammy, literally from the beginning, both to develop more sophisticated means of financial fraud, and also to position him as a liaison to legitimate accounting firms that could be used to vouch for Crazy Eddie’s financial health in advance of the IPO. The scheme was almost like something out of Scorsese’s The Departed: planting a mole under deep cover.

It worked. Sammy, who later wrote extensively on the Crazy Eddie saga (his stories, collected here, are the main source material for this article), graduated from accounting school in 1980 and scored in the top 1% in the country on the CPA exam. He began to apprentice at Penn & Horowitz–who happened to be Crazy Eddie’s accountants. It was against accounting industry rules to maintain employment at a firm that you’re accounting, but Crazy Eddie concealed this by paying Sammy off the books. By the early 1980s, he was hard at work prepping the company to appear to “go legit,” while helping his family plan the biggest scam of all: selling shares of an outright fraud on the New York Stock Exchange.

In the next installment, we’ll explore how the Antar family began to fracture at precisely the wrong moment–and how Crazy Eddie’s IPO sowed the seeds for its ultimate downfall. Stay tuned!
The header illustration is a courtroom drawing, from the Crazy Eddie trial of 1989, licensed CC BY Image courtesy of The Courtroom Sketches of Ida Libby Dengrove, University of Virginia Law Library. I am not the uploader of any video clips embedded here.
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