Crazy Eddie

Crazy Eddie, Inc. financial fraud case Crazy Eddie was an American retail store chain run by the Antar family, which was established as a private company in 1969 in Brooklyn, New York by businessmen Eddie and Sam M. Antar. The fraud at Crazy Eddie was one of the longest running in modern times, lasting from 1969 to 1987. Crazy Eddie became a known symbol for corporate fraud in its time, but has since been eclipsed by the Enron, Worldcom and Bernie Madoff accounting scandals. Commencement of fraud

The case study analyzes Crazy Eddie. Crazy Eddie was convicted of white collar crime through fraud triangle. Crazy Eddie involved in fraud through incentives, opportunity and rationalization. Crazy Eddie reported lacking rationalization but confirmed that incentives and opportunity were working. The company also reported lacking morality and excuses. Crazy Eddie executed its business without taking into account moral implications of doing business. Crazy Eddie illegally adjusted returns to avoid

Crazy Eddie, Inc. Common Size Balance Sheets March 1, 1987 March 1, 1986 March 1, 1985 May 31, 1984 Cash 3.17% 10.47% 33.99% 3.76% Short-term investments 41.36% 21.14% 0.00% 0.00% Receivables 3.68% 1.77% 4.18% 7.12% Merchandise inventories 36.99% 47.16% 40.51% 63.83% Prepaid expenses 3.61% 1.86% 0.98% 1.41% Total current assets 88.81% 82.40% 79.66% 76.12% Restricted cash 0.00% 2.64% 10.77% 0.00% Due from affiliates 0.00% 0.00% 0.00% 15.69% Property, plant and equipment

Crazy Eddie Tables of Contents Issues…………………………………………………………………………………………………………….III-V Facts..…………………………………………………………………………………………………………….VI-IX Analysis…………………………………………………………………………………………………………X Recommendations………………….…………………………………………………..………………….XI References.…………………………………………………………………………………………………….XII Issue 1) Red flags were the increase on short-term investment receivables why would an electronic company

Crazy Eddie 1. 2 . If better, more complete audit procedures were performed, it is likely that many of the major accounting irregularities and fraudulent practices could have been uncovered. a) The falsification of inventory count sheets: The auditors could have conducted full physical inventory counts, or performed random inventory counts at warehouses or stores undisclosed to the management at Crazy Eddie prior to the tests. This would have prevented the management from strategically

2009 Crazy Eddie, Inc. Crazy Eddie Inc. was a retail consumer electronics store in New York City. By 1987, Crazy Eddie Inc. had 43 retail outlets, sales exceeding $350million, and outstanding stock with a collective market value of $600 million. Doubling in the four-year period from 1981 to 1984, sales in the consumer electronics industry exploded. Eddie Antar, the owner of the Crazy Eddie, Inc. converted his stores into consumer electronics supermarkets. Antar stocked the shelves of Crazy Eddie's

crazy eddiCase 1.8 Crazy Eddie, Inc. Term A2/Spring 2013 March 19, 2013 Table of Contents Issues…………………………………………………………………………………………...3 Facts…………………………………………………………………………………………….4 Analysis and Conclusions…………………………………………………………………….6 Conclusions…………………………………………………………………………………….9 Issues 1. Compute key ratios and other financial measures for Crazy Eddie during the period 1984-1987. Identify and briefly explain the red flags in Crazy Eddie’s financial statements that suggested the firm possess a higher-than-normal

Shani Davis 11/4/16 Crazy Eddie Crazy Eddie was the name of what appeared to be a very successful retail electronic chain. It was a front for a $100 million-dollar scam masterminded by its owner, Eddie Antar, and his cousin, Sam Antar. When the Feds came calling, Sam spilled the beans and his testimony sent Eddie to prison. Sam and Eddie grew up together in Brooklyn and Eddie offered Same a job at his electronic store. The store became known as Crazy Eddie, a place where people went to buy everything

inflating revenues, evading taxes, or showing misleading information on their financial statements. Although Crazy Eddie, an electronic retail business in the 70-80’s, did employ many of these tactics as a cover-up, their fraud started almost from the beginning, just because they could. Crazy Eddie started out as ERS Electronics. Its namesake (ERS) was from the three equal partners, Eddie Antar, cousin Ronnie Gindi, and father, Sam Antar. They founded it together in Brooklyn 1969, under the original

Crazy Eddie, Inc. Question 1 Key ratios and other financial measures: |Pro Forma Balance Sheet Ratio |1984 |1985 |1986 |1987 | | |Account Receivable |7.12% |4.18% |1.77% |3.68% | | |Merchandise Inventories |63.83% |40.51% |47.16% |36.99% | | |Account Payable