You must have seen the ads (like this). Even if you didn’t live in or around New York, they were infamous. They featured radioman Jerry Carroll—I was disappointed to learn he was not Crazy Eddie himself—who played it loud and just-this-side-of-reality.
Annoying but effective. Turns out, though, as detailed by Gary Weiss in his patient detailing of the rise and fall of Eddie Antar in Retail Gangster: The INSANE, Real-Life Story of Crazy Eddie, that however obnoxious (and funny!) Carroll was in the ads, he was a shy guy in real life.
He couldn’t have been as crazy as the real Eddie anyway. Crazy in the crooked sense. For Eddie Antar, the man behind the stores, was one our greatest con-men. Not in a nice way, either, like in The Sting (read this fascinating review of the train card game cheating scene). This guy and his personal financial tricks was so nasty he could give even the government a bad name.
And city government back then was just as corrupt as it’s now again becoming. Weiss reminds us of sewer-like business practices of the then politicians, the city’s inevitable bankruptcy, and the sad truth that nobody ever paid the price for their destructive actions. This is relevant because Eddie, and everybody else then, was saturated in the routine shiftiness and questionable dealing in the city.
This was surely a tough book to write because of all the details Weiss had to track. It gives us a fresh appreciation for what accountants have to do (which I never could: no patience). He also does a good job with Eddie Antar’s and his family’s sordid details, which I don’t want to emphasize here because I’m keen to get to the scams.
Briefly, Eddit was part of a habitually close group that emigrated from Allepo and settled in the New York Area. Taking care of family was paramount, and because of marriage practices practically everybody was family. They called themselves the “S-Ys”, for Syrian Jewish Community in America.
It was by long habit and custom that many merchants in that group thrived by sharp practices. Like in taking nehkdi, an off-the-books skim off the top, in cash and stuffed in mattresses (yes, actual mattresses, and other hideaways). Eddie himself started out in the family around the Port Authority bus terminal working in clip joints, selling over-priced cameras and cheesy souvenirs. There’s still a few of these places left, now selling Statue-of-Liberty pencil sharpeners and Chinese-made I-heart-NYC t-shirts.
The life of Crazy Eddie is just as depressing as you can imagine, but I’ll leave those details to the book. Weiss telling phrase is “Eddie’s conscience was on a permanent leave of absence.” My interest is in magic, particularly mental magic, which brings me to the scams.
Eddie, like many from the S-Y “community”, ran two sets of books. The one for the government reported fewer sales, which allowed him to pocket sales tax, which was not insubstantial for big-ticket electronics. Margins were thin on many items, so this trick allowed him a small profit, even when selling at cost. Business was usually in cash in those days, too. So he followed family tradition and stuffed the unreported nehkdi into suitcases. Then he’d fly off to Israel and deposit it.
Here’s my favorite, which must still be in play. Watch for it. Customers would come in to Crazy Eddie’s looking for the new top-quality Sony. Salesmen would tell the customers why not save a bunch of money by buying Brand X, which was just as good as Sony, but a lot cheaper? People trusted the salesmen, because he was trying to save the customer money. Only the margins on the Sony were next to nothing, but were huge on Brand X.
“Going to lunch” was a good one. Customer wanted the new stereo system, but they were all sold out, except for the display. That could be sold, but had to have a discount. Yet the customer wanted new, which was promised by the salesman. The salesman would take his time writing up the ticket, telling an associate to “go to lunch”.
Meaning he was to go in the back where the packing of the display models was carefully saved. They had tape and whatnot that resembled the original seals. They even kept the staples for the boxes, which they bent back into shape. Voilà! A “new” stereo.
Eddie bought casualty insurance for the full retail price. And, though Weiss says Eddie never caused any “accidents”, they happened frequently enough in those old buildings in New York. Pipes would break, sewers would back up, and so on.
One night a pipe burst in a store, and the team sprang into action, going to other stores taking from them returns and defective merchandise and bringing it to pipe-burst store, so it could be added to the claim. If the broken pipe wasn’t doing an adequate job, somebody would open the fire hose and wet the merchandise down.
The insurance company would pay, working with Eddie’s hired adjuster, who was also, in a conflict of interest, an employee of an insurer. Eddie’s adjuster would make sure the claims guys at the insurers got a little something, too. Technically, Weiss tells us, the insurer would own the damaged goods, but they never bothered to collect it or see to it that it was destroyed. So Eddie carefully stored it in a warehouse to be ready for the next accident.
One of his relatives had some business sense and suggested an IPO. Then, as now, what affected stock price was sales growth. That was easy to generate, at first, even with flat sales. They just stopped, gradually, stealing the sales tax. They begin to report, for real, off-the-books sales. The nehkdi was less, but the stock price allowed Eddie to cash out, most often obviously to the detriment of the company.
Although some alarms were raised over Eddie’s stock sales, analysts (or rather their companies) had to sell stock. Reviews then were like how critics rate movies now: not daring to pan anything lest the critic lose social stock. This inbreeding allowed Eddie’s scams to escalate to magnificent heights.
For instance, a way to fake the P/E was to swell year-end stock by accounting tricks, like bamboozling the auditors during inventory. Eddie used the old-fashioned way of having pretty girls distract the auditors, who were usually young single men just starting out in accounting. Problem with this is that the fake inventory had to be faked again the next year, and then some, which swelled the inventory on paper.
They sent out faked debit memos to friendly suppliers. These “were essentially bills claiming that the company was owed money.” No money changed hands, but the these were added to the sales.
They scammed manufacturers in ad-comp dollars. And in sending fictional warranty claims. Sharp Electronics became suspicious when they saw Eddie’s submitted claims for “units that they didn’t make.”
The scams, like a pyramid-scheme, became too many to sustain, and Eddie at last fled to Israel. Under real and fictitious names. Where he once again started scamming people.
As far as Eddie’s fate goes, and his family members, well, that is a rich and terrible story I’ll leave for Weiss to tell. Suffice to say that Eddie’s fall begins in being extradited from an Israeli prison (they didn’t want him either), prosecuted in the States, jailed, set free on a technicality, re-tried and re-jailed and then dead at 68 from some unknown illness. Crazy.
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Categories: Book review