Archive for June, 2007
Mon 25 June 07 · Filed under Fraud Detection & Prevention
Sam Antar says the following about his crimes: “What I did was pure evil. I am going to probably fry in hell for many years before I get upstairs. We were nothing but cold hearted and soulless criminals. We were two bit thugs.”
Sam and his cousin Crazy Eddie Antar were partners in crime for many years with the Crazy Eddie company. Eddie was once the darling of Wall Street. Then the false financial statements got in the way. The Antar family cashed out almost $100 million in stock…
Maybe the craziest part about the fraud was that at one point, Eddie was seen as a hero to consumers. He was seen as someone will to buck the system and ignore fair trade laws to give consumers lower prices. The truth was that those low, low prices were merely part of Eddie’s bait and switch. Get the customer in with an advertised price, and switch them to a different products with a higher margin (they called them house brands) and sell an inflated warranty. Then if the customer paid cash for an item, the sale was not reported and the sales tax was kept by the Antars. [Read more...]
Mon 25 June 07 · Filed under Fraud News Stories
The case of the pants lost by the drycleaners and the ensuing $54 million lawsuit has been decided. District of Columbia Superior Court Judge Judith Bartnoff ruled that Custom Cleaners did not violate the Consumer Protection Act with its “Satisfaction Guaranteed” sign.
Administrative law judge Roy L. Pearson accused the business of fraud under the Consumer Protection Act when they lost his pants and gave him a pair that was not his.
A two-day trial was heard earlier this month, the judge has just ruled. The judge has awarded Pearson no damages, and he has been ordered to pay the costs of the defendants, Soo Chung, Jin Nam Chung and Ki Y. Chung.
Mon 25 June 07 · Filed under Fraud News Stories
Wow! A two-year-old with an IQ of 152 is being admitted to Mensa in Britain. Her recent IQ test results indicate she’s at the level of a five or six-year-old.
Mensa is the “High IQ Society,” or the international society for highly-intelligent people. Members are said to be in the top two percent of the population in intelligence. The organization has about 100,000 members worldwide, but reports that there are only 30 members under the age of 10. Normally, only people 10 years and older are tested by Mensa, but younger children are accepted if they qualify.
Mon 25 June 07 · Filed under Fraud News Stories
Welcome to the Carnival of Fraud, which is curiously not about career advice, or good customer service, or getting publicity for your company, or starting a home-based business, or how fast a cellular phone retailer should greet customers. Amazingly…. it’s about fraud and scams! So the submissions that related to the topic at hand include:
Steven Silvers features a post on the inflation of corporate titles.
SOX First talks about securities fraud by the folks who do the “pump and dump” on the internet. Leon’s also got a good post about fraud and Sarbanes-Oxley.
Matt Paulson offers a very good perspective on mutual funds, and why they are still a great investment for people.
Wenchypoo offers an entertaining commentary on why we ought to have fewer people on this earth.
And I provide a fascinating question for Patrick Byrne, CEO of Overstock.com. I’m wondering when he lied and when he told the truth?
Next week’s Carnival of Fraud submissions can be sent here.
Sun 24 June 07 · Filed under Fraud News Stories
Did you know that I’m a graduate of the Criminal Investigator Training Program (CIT) at the Federal Law Enforcement Training Center (FLETC) in Glynco, Georgia?
This site gets lots of hits from people searching for information on FLETC, so I thought it was a good time to highlight this topic!
A summary of the program can be found here. The best part of the program was becoming firearms certified. I was trained with a 9mm Sig Sauer, and have enjoyed shooting at the range with my own Sig since then.
The training program includes plenty of classroom work, but some of the more interesting training exercises included scenes that were acted out by members of the Glynco community. FLETC actually paid people to come to the training grounds and be actors in crime scenes. We did mock search warrants and arrests, among many other practical exercises.
One of the most exhilerating exercises was a shootout in a dark trailer. We had paintball handguns, and the most important part of the exercise was to come out unscathed by any paint balls. We also had a cool shoot/don’t shoot exercise. You passed if you only shot people who had guns, and if you shot them before they shot you. Shooting someone who looked like they had a gun, but really didn’t, gave you a failing grade. I passed both of these exercises on the first try.
I got the highest score in our class on testifying in court. We were witnesses in a pretend courtroom, complete with actors playing the judge, jury, and attorneys. We had to testify as if we had investigated a case and were presenting the evidence to the jury. That was easily my strongest test performance.
Sun 24 June 07 · Filed under Fraud News Stories
Several people have questioned whether Usana Health Sciences must file a Form 8-K with the SEC to notify them of the recent distributor class action suit. It seems to be the common belief that the lawsuit is a “material event” requiring the filing of an 8-K.
So here it is, straight from the Securities and Exchange Commission. Yes, the suit may be considered a material event, but the 8-K only needs to be filed if the material even falls under one of the below categories: [Read more...]
Sun 24 June 07 · Filed under Fraud News Stories
On August 7, TLC rolls out a new show… L.A. Ink. The show features Kat Von D, the tattoo artist who recently left Miami Ink. She went back home to L.A. and will now have her own show!
From TLC’s website:
Kat Von D has come home to Los Angeles to fulfill her dream of opening up her own tattoo shop. The news has spread and celebrities, rising starlets, punk rockers, musicians and tattoo collectors alike are lining up for some of Kat’s famous black and grey ink. In a city known for its tattoo culture, LA Ink is sure to stand out — drawing clients from all over the world and from all walks of life. But with popularity comes headaches, drama and a lot of hard work.
Playing by her own rules, Kat lives a fast-paced, rebel lifestyle. Hers is a life of freedom: she sets her own schedule, picks her clients, sleeps late,and parties all night. For her shop to be a success, Kat will need to learn how to balance her lifestyle and her business while managing a colorful staff of renowned artists. LA Ink will offer a rare glimpse into an LA that is seldom seen, through the eyes of a true insider.
Cool! Can’t wait to see it!
Sat 23 June 07 · Filed under Fraud Detection & Prevention
Sam Antar has uncovered some interesting information. I would love for Patrick Byrne, Overstock CEO to respond to Sam’s questions about this (and now the questions are mine too!).
Patrick is involved with an organization called National Coalition Against Naked Shorting (NCANS). Naked short selling, as defined by Wikipedia:
Short selling is the practice of borrowing stock, then selling it in hopes that the price will go down and it can be bought back at a lower price with shares to replace the borrowed ones. “Naked shorting” refers to short selling a stock for sale without first borrowing the shares or making an “affirmative determination” that the shares can be borrowed. The U.S Securities and Exchange Commission has issued a regulation, known as Reg SHO, seeking to curb abusive naked shorting.
On the NCANS message board, Patrick Byrne (aka Hannibal) posted the following : [Read more...]
Sat 23 June 07 · Filed under Fraud News Stories
Jessie Davis, the missing pregnant woman from Canton, Ohio, was found dead today. Investigators found a body in a lake, and believe it is Jessie. Her married boyfriend, police officer Bobby Cutts Jr., is being charged with 2 counts of murder.
The two-year-old son of Jessie and Bobby, Blake, was found home alone on June 15. Jessie’s bedroom was torn apart, and bleach was found on the floor. Investigators say the boy told them, “Mommy was crying. Mommy broke the table. Mommy’s in rug.”
Bobby Cutts was the father of Jessie’s baby, and he has been considered a prime suspect from the beginning. His home was searched on Wedensday for the second time, and he was read his Miranda rights at that time. The police have been looking for Jessie’s, two items things that were missing from her home. The FBI allegedly took at least two dozen boxes from his house.
Jessie was scheduled to give birth to a little girl due on July 3, and she was planning on naming her Chloe. My prayers are with the family, especially with little Blake.
Sat 23 June 07 · Filed under Fraud Detection & Prevention
Herb Greenbergs thinks the former CEO of Comverse Technology, Jacob “Kobi” Alexander can learn a thing or two from Eddie Antar. Alexandar fled the United States with his family, going to Namibia, allegedly with over $57 million transferred out of the country before he left. He is currently awaiting an extradition trial, and faces U.S. charges of conspiracy to commit mail, wire and securities fraud.
Eddie was the founder and CEO of Crazy Eddie, a chain of electronics stores that was discovered to be in the midst of a $100 million fraud in the 1980s. The store was famous for its slogan “Our prices are INSANE,” and the case against Eddie and his cousin Sam Antar was equally as crazy. The fraud included document shredding, inflated inventory, inflated earning, skimming, and money laundering.
He went on the run for over two years before he was arrested in Israel in 1992. Eddie dodged the law by running through United Kingdom, France, Canada, Switzerland and Israel with fake passports. He was in an Israeli prison for 8 months before being extradited to the United States. Here, he spent over seven years in federal prison after his guilty plea to conspiracy charges, and was released in 1999.
Now, Eddie Antar says people don’t want to have anything to do with him. He spends a quiet life as a grandfather in New York, and says that he deserved the punishment. The company had a 22 year run, so at least some of the operations were legitimate. Herb quotes Eddie:
Mr. Antar’s advice to others: “All the money in the world is not worth a day in prison — ain’t worth one day.” If he hadn’t broken the law, he says, “I’d be a Best Buy today, or I would have been sought to be bought out by many companies. I’d be a billionaire today. I had around $100 million that [the government] took from me. That was cash in the bank. It was everything I had. Can you imagine what that would be worth today? I blew it big time.”
Mr. Alexander, are you listening?
More on Eddie Antar and his cousin Sam on CNBC on Wednesday night at 10pm EDT.
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