Sam Antar on Green Mountain: Inventory Changes Signal Trouble

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Sam Antar Crazy Eddie CFOSam Antar, former CFO of Crazy Eddie, a massive fraud in the 1980s, has been following Green Mountain Coffee Roasters (GMCR) for a long time. He has pointed out red flags of fraud over and over, and the current problem is with the level of inventory. Sam has noted that the inventory of Green Mountain has grown to “toxic levels,” even when the company was beating revenue and earnings targets.

Here’s a recent interview in which Sam details the inventory issue at Green Mountain, along with a few other criticisms of management. Continue reading

Implied Credibility Given to White Collar Criminals (and Others!)

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Yesterday Reuters Insider published a video of an interview with Sam Antar, former CFO of fraudulent Crazy Eddie, talking about the efforts of the FBI to profile white collar criminals. The starting point for the interview was this article about the FBI applying techniques which were successful in profiling serial killers to profiling white collar criminals.

It’s a good idea, and it is true that there are some distinctive characteristics that white collar criminals exhibit, especially upper management defrauders. I discuss “People Who Commit Fraud” in my book Essentials of Corporate Fraud, and you can see a few examples on this webpage. Continue reading

Overstock.com: The Circus Continues

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Sam Antar has often referred to Overstock.com and CEO Patrick Byrne as the gifts that keep on giving. And he sure is right! There is never a dull moment when it comes to wacky conspiracy theories and accounting woes that never end.

Last week, Overstock (NASDAQ:OSTK) announced that it wouldn’t be filing its 10-Q for the third quarter on time. The reason? Patrick Byrne had created another clever (but completely wrong) accounting treatment for another accounting error recently discovered, and the auditors wouldn’t sign off on it. Continue reading

Conservatism is no excuse for false financial statements, Overstock.com

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I’ve written extensively in the past about the train wreck that is Overstock.com (NASDAQ:OSTK) and its nutty CEO, Patrick Byrne.  Just when I think there couldn’t possibly be more to write about the horrible company and Byrne’s crazy antics, I’m proven wrong.

For those that have been following Overstock.com for the past few years, it came as a great surprise that the Securities and Exchange Commission decided to investigate the company and its financial reporting. It came as a surprise because for three years, Sam Antar (former CFO of Crazy Eddie and convicted felon) has been exposing their financial reporting misdeeds on his blog. Yet the SEC didn’t seem willing to take any action. Continue reading

The Journal of Accountancy recommends Sam Antar’s blog

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For the Journal of Accountancy’s “Smart Stops on the Web” column:

IT TAKES ONE TO KNOW ONE
www.whitecollarfraud.blogspot.com

Who knows fraud better than a fraudster? Sam E. Antar, former Crazy Eddie Inc. CFO and convicted felon, shares his views and advice on white collar crime, securities fraud, internal controls, Sarbanes-Oxley and more on his blog. The introduction states, “The well-educated, skilled, and experienced accountant is the first line of defense for the capitalist system.” And, toward that end, Antar points out inconsistencies in companies, organizations and governments, offers how-tos on detecting fraud, and muses on wrongdoings. You can browse by the most popular posts, learn more about the Crazy Eddie fraud scheme, check out fraud facts, and find related blogs in his list of links.

When Money Talks, Mark Shurtleff Listens

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How much does it cost to get Mark Shurtleff, Utah’s Attorney General, to lie for you? Apparently only $5,000. What a bargain!

Today Sam Antar has an enlightening piece on his blog, entitled “Overstock.com (NASDAQ: OSTK) CEO Patrick Byrne Pays Utah Attorney General Mark Shurtleff to Defame a Blogger.” It details a situation in which a $5,000 Overstock.com campaign contribution to Shurtleff was followed immediately by public lies by Shurtleff. And there’s plenty of evidence to support the claim that Shurtleff blatantly lied. Continue reading

Overstock.com Materially Overstates EBITDA

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Sam Antar has a great article today on Overstock.com (NASDAQ:OSTK) continuing to overstate EBITDA. Specifically, Sam says:

In Overstock.com’s Q1 2008 earnings release and 10-Q report the company continued to improperly remove from its EBITDA calculation, certain stock-based expenses in violation of Regulation G. As a result, Overstock.com’s reported Q1 2008 EBITDA of $3.524 million was materially overstated by $1.339 million or about 61%.

And of course, that overstatement is in addition to the overstatement that results from Overstock.com calculating EBITDA by starting with operating income, instead of net income, as required by the SEC rules. Some people erroneously believe it’s okay to start with a different figure when calculating EBITDA. That’s not true.

The SEC does not permit companies to do that because of the confusion it could cause: Continue reading

About the SEC “sprinkling holy water” on Overstock.com

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Wacky Patty ByrneLast week in the Overstock.com (NASDAQ:OSTK) earnings conference call, the company’s executives had the following to say about the SEC’s investigation of the company:

Patrick Byrne

So, is it fair to say that all these other issues that the knuckleheads keep on raising as issues, the SEC examiners, looked at and sprinkled holy water on?

David Chidester

Yeah, I mean they took a deep dive they do that every three years or so. And again they are very good to work with. It is not adversarial at all and we’ve got all the issues resolved and it’s nice to know that we could move forward.

Those statements by Patrick Byrne and David Chidester were a big no-no, for two main reasons. Continue reading

Overstock.com: What are you hiding?

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The “Black Ops” train at Overstock.com (NASDAQ:OSTK) has been chugging full steam ahead over the last month, so that can only mean one thing… Patrick Byrne and his minions have something to hide.

And indeed, the fourth quarter financial results were not so good. So in order to deflect your attention from the numbers and the facts, the so-called “executives” spend their time smearing those who criticize the company. Executives take pot shots at writers who question the company and its management… writers like Herb Greenberg, Gary Weiss, Floyd Norris, Zac Bissonnette, and others. And then there’s Sam Antar.

Sure, Sam Antar is an easy target for Bryne and his lead stalker, Judd Bagley. After all, he is a convicted felon because of his role in the fraudulent family business, Crazy Eddie, which caused over a hundred million dollars in losses. But even when doing the right thing, Sam’s still a target… he decided to give law enforcement the goods on the Crazy Eddie business. Of course, instead of portraying this as an individual who took responsibility for his actions and did the right thing by confessing, Sam is vilified as a rat. He can’t win! Continue reading