Eddie and Sam Antar will be names that no one will ever forget along with their electronic store, Crazy Eddie. Crazy Eddie first started out as Sights and Sounds but thanks to Eddie Antar’s strong and aggressive sale tactics, the name was changed. The name came from a nickname customers called Eddie for all his crazy low prices and tactics (S. Antar, “Crazy Eddie Early”). Thus Crazy Eddie was created. At the time Crazy Eddie’s was known for their crazy low prices and in your face advertising. But what Crazy Eddie is really known for now is pulling off a huge scam as well as fraud.
Before I start to talk about the scams and fraud throughout the company I think it’s important to talk about the culture. A company’s culture will really give you …show more content…
But Eddie and Sam had a plan to get them through this. After the company went public Eddie and Sam focused their time on tricking the auditors and inflating profits anyway possible. The first thing Sam thought to do was to distract the auditors in a very casual way so it wouldn’t seem as though he was inferring. The auditors on sight were inexperienced young men, so Sam encouraged female employees to flirt with them and talk about audit issues at lunches. Sam took higher level employees out to bars where beautiful women were usually found. Sam played a huge game of distraction with the auditors. He created a friendship with the auditors and this ruined the auditor’s professional skepticism. Because of the Sam showing them a good time and building a friendship with auditors. Things the company told the auditors was usually and quickly accepted as fact. This also caused the auditors to slack off causing them to rush to finish the audit (S. Antar, “Crazy Eddie Fraud”). This is crazy how easy it is to gains someone’s trust. I am shocked that at how easy it was to pull the auditors from their jobs. I believe there is a time for work and a time for play and those two usually do not mingle. So it’s interesting how easily the auditors were distracted. This caused the auditors to miss a big red flag. Money from previous frauds totaling $2 million were deposited into the company’s bank account a day after year end. Because of this “Crazy Eddie raised at least an extra $5.143 million selling 195,000 additional shares. Eddie and his father pocketed an extra $3.2 million in stock sales” (S. Antar, “Crazy Eddie Fraud”). Usually a cut off test would be done but the lack of time caused this test to be put on the back burners. This over sight caused millions to be falsely earned, it is messing with the stock market. It’s unbelievable how a small series of events snowballs into such a mess.
Before I start to talk about the scams and fraud throughout the company I think it’s important to talk about the culture. A company’s culture will really give you …show more content…
But Eddie and Sam had a plan to get them through this. After the company went public Eddie and Sam focused their time on tricking the auditors and inflating profits anyway possible. The first thing Sam thought to do was to distract the auditors in a very casual way so it wouldn’t seem as though he was inferring. The auditors on sight were inexperienced young men, so Sam encouraged female employees to flirt with them and talk about audit issues at lunches. Sam took higher level employees out to bars where beautiful women were usually found. Sam played a huge game of distraction with the auditors. He created a friendship with the auditors and this ruined the auditor’s professional skepticism. Because of the Sam showing them a good time and building a friendship with auditors. Things the company told the auditors was usually and quickly accepted as fact. This also caused the auditors to slack off causing them to rush to finish the audit (S. Antar, “Crazy Eddie Fraud”). This is crazy how easy it is to gains someone’s trust. I am shocked that at how easy it was to pull the auditors from their jobs. I believe there is a time for work and a time for play and those two usually do not mingle. So it’s interesting how easily the auditors were distracted. This caused the auditors to miss a big red flag. Money from previous frauds totaling $2 million were deposited into the company’s bank account a day after year end. Because of this “Crazy Eddie raised at least an extra $5.143 million selling 195,000 additional shares. Eddie and his father pocketed an extra $3.2 million in stock sales” (S. Antar, “Crazy Eddie Fraud”). Usually a cut off test would be done but the lack of time caused this test to be put on the back burners. This over sight caused millions to be falsely earned, it is messing with the stock market. It’s unbelievable how a small series of events snowballs into such a mess.