From criminal to credible?

Crain's New York Business 10-04-09Yes, it can happen. And that’s exactly what happened to Sam Antar, former CFO of Crazy Eddie… a massive fraud for which he’s now a convicted felon. He’s had his eye on Overstock.com (NASDAQ:OSTK) for a couple of years, and despite stalking and harassment paid for by Overstock’s wacky CEO Patrick Byrne, Sam keeps on investigating.

This week Crain’s New York Business had Sam’s mug on the cover, along with a story about his forensic accounting skills.

And Patrick Byrne can rant and rave all he wants and pretend Sam is wrong in his assessment of Overstock.com’s accounting shenanigans, but the Feds seem to think Sam is doing a marvelous job:

Despite his felonious past, Sam Antar has earned credibility with law enforcement officials. He’sspent much of the past decade talking to the FBI, the Justice Department, the IRS, accounting students and business groups, explaining how Crazy Eddie fooled auditors for so long.The former CPA says he feels bad about what he did and wants to help overmatched investigators
as they try to root out savvy fraudsters.

“He knows accounting backwards and forwards,” says Richard Simpson, an SEC attorney who helped lead the government’s probe into Crazy Eddie.

Mr. Simpson wouldn’t say if Mr. Antar’s research into Overstock triggered the latest SEC investigation. An agency spokesman didn’t return a call

.Former SEC attorney Thomas Newkirk says he came to trust Mr. Antar as the government dug through Crazy Eddie’s books in the early 1990s. “When he decided to cooperate, he cooperated completely,” Mr.Newkirk says.

And what credibility does Patrick Byrne have? None, really. Crain’s reports that Byrne said the following:

Mr. Byrne says there’s nothing improper about his company’s accounting.
He acknowledges that Overstock twice restated previously reported results, in 2006 and 2008, but says that much of that was because the accounting was deemed “too conservative.”

The real truth is that Overstock.com hasn’t produced an accurate financial statement the first time around in the entire time the company has been public. And of course, he doesn’t mention the fact that some of those financial statements have had to be restated twice.

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