Remembering Crazy Eddie, the electronics store chain that was run like Studio 54

I'd never heard about Crazy Eddie, an electronics chain that was also a straight-up scam. Eddie Antar ran his 43-store, $500m retail empire like it was a Manhattan nightclub: cash stuffed in briefcases, under the bed, over the ceiling tiles…

[Eddie] Antar's uncle … started bringing the money to Antar's father's house, where he hid as much as $3.5m — ~$11m today — in a false ceiling. Eddie Antar kept close tabs, usually calling his uncle twice a day to see how much money they were skimming. A family member later said Eddie Antar received ⅔ of the skimmed cash and Sam M. Antar, his father, the other third. 

And then what did they do? They went public!

Why would a company built on a family fraud go public?  Somebody told Antar he could keep making millions skimming cash, but he could make tens of millions if the company traded on the stock market. Strangely, Crazy Eddie's fraudulent history gave it an advantage. To provide the illusion of quickly increasing profits ahead of the IPO, the Antars simply reduced the amount of cash they were skimming. With millions more on the ledger instead of in the family's pockets, the company's profits looked more impressive. 

The scam only fell apart when competition tightened and he had to sell class a stock to a big investor who realized what was going on because of missing inventory. The IRS (which then as now targets the poor, not the rich) was clueless.

P.S. In the store's unforgettable earfucking TV ads, Eddie was played by an actor who looked nothing like him and could give Big Bill Hell a run for his money: a weirdly effective act of media legerdemain when you're a scammer.

The popular electronics chain that scammed America [The Hustle]