How ‘Crazy Eddie’ Electronics Chain Scammed America

In 1983 the annual revenue at the electronics chain Crazy Eddie was roughly $134 million (or about $372 million today), remembers The Hustle. The next year they’d sold $44 million just in computers and games — and eventually grew to 43 stores. The company’s stock ticker symbol was CRZY.

“There was just one major problem,” the article notes. “Crazy Eddie had been lying about its numbers since its inception — and the higher the stock soared the further founder Eddie Antar went to maintain the illusion.”

It’s a colorful story from the early days of home PC sales. Antar’s uncle hid up to $3.5 million in cash in a false ceiling at Antar’s father’s house, according to The Hustle. “Eddie Antar kept close tabs, usually calling his uncle twice a day to see how much money they were skimming…. The skimming strategy allowed Antar to not only hoard cash but also evade sales taxes. His employees were also paid off the books so Crazy Eddie could avoid payroll taxes.”

“Money was always in the house,” said Debbie Rosen Antar, Antar’s first wife, to investigators in the late 1980s. “And if I needed it and I asked him, he would say, ‘Go underneath the bed and take what you need….'”

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.
As a public company, Crazy Eddie then made up for its inability to skim cash by initiating new fraud streams.

– The company embellished its inventories by millions of dollars to appear better-stocked and better positioned for profits.

– The Antar family laundered profits it had previously skimmed — and deposited in foreign bank accounts — back into the company to inflate revenues….

In November 1987, a hostile investment group led by Houston entrepreneur Elias Zinn pounced, purchasing Crazy Eddie. As Antar’s cousin later recounted, Antar thought the sale would at least give them an opportunity to pin the fraud on the new owners. But Zinn immediately discovered $45 million of listed inventory was missing. Stores soon closed, and the company went bankrupt in 1989.
Two disgruntled ex-employees then brought fraud allegations to America’s stock-regulating agency, the article reports, while the FBI “started sniffing around, too.” Crazy Eddie fled the country, using forged passports to escape to Tel Aviv, Zurich, São Paulo, and the Cayman Islands. But he was eventually arrested in Israel, sentenced to 12.5 years in prison, and ordered to repay investors $121 million (though he apparently served only seven).

But Crazy Eddie also became a cultural phenomenon — sort of. In the 1984 movie Splash, Darryl Hannah’s character even watches a Crazy Eddie TV ad. The Hustle’s article also includes photos of a Crazy Eddie stock certificate — and an actual “Wanted” poster issued the next year by the U.S. Marshalls office.

Yet just four years before his death in 2016, Antar — a high school dropout — was telling an interviewer from The Record that “I changed the business….”

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Amateur Detectives are Now Crowdfunding DNA Sequencing to Solve Murders

In 2018 police arrested “the Golden State Killer” — now a 72-year-old man who had committed 13 murders between 1974 and 1986, the New York Times remembers:
What made the investigation possible was GEDmatch, a low-frills, online gathering place for people to upload DNA test results from popular direct-to-consumer services such as Ancestry or 23andMe, in hopes of connecting with unknown relatives. The authorities’ decision to mine the genealogical enthusiasts’ data for investigative leads was shocking at the time, and led the site to warn users. But the practice has continued, and has since been used in hundreds of cases.
But now using similar techniques, a wellness coach born in Mississippi (through a Facebook group called DNA Detectives) has helped over 200 strangers identify their unknown parents, the Times reports.

And she’s recently donated more than $100,000 to a genetics lab called Othram — to fund the sequencing of DNA to solve cold cases back in her home state. “These families have waited so long for answers,” she told the New York Times, which calls her “part of a growing cohort of amateur DNA detectives…”
[Othram] created a site called DNASolves to tell the stories of horrific crimes and tragic John and Jane Does — with catchy names like “Christmas tree lady” and “angel baby” — to encourage people to fund budget-crunched police departments, so that they can hire Othram. A competitor, Parabon NanoLabs, had created a similar site called JusticeDrive, which has raised around $30,000.

In addition to money, Othram encouraged supporters to donate their DNA, a request that some critics called unseemly, saying donors should contribute to databases easily available to all investigators. “Some people are too nervous to put their DNA in a general database,” said Mr. Mittelman, who declined to say how large his database is. “Ours is purpose-built for law enforcement.”
Another group raising money for genetic investigations are the producers of true-crime podcasts — and their listeners. According to the article, the podcast-producing company Audiochuck has donated roughly $800,000 to organizations doing investigative genealogical research (including Othram), though the majority went to a nonprofit started by the host of the “Crime Junkie” podcast. (And that nonprofit raised another $250,000, some through crowdfunding.)

“Why just listen to a murder podcast when you can help police comb through genealogical databases for the second cousins of suspected killers and their unidentified victims?” the Times asks?

So far donors around the country have given at least a million dollars to the cause. They could usher in a world where few crimes go unsolved — but only if society is willing to accept, and fund, DNA dragnets…. A group of well-off friends calling themselves the Vegas Justice League has given Othram $45,000, resulting in the solving of three murder-rape cases in Las Vegas, including those of two teenage girls killed in 1979 and in 1989…. [T]he perpetrators were dead….

Natalie Ram, a law professor at the University of Maryland, expressed concern about “the public picking and choosing between cases,” saying investigative priorities could be determined by who can donate the most. Ms. Ram said the “largest share” of cases solved so far with the method “tend to involve white female victims….”
Ms. Ram is also concerned about the constitutional privacy issues raised by the searches, particularly for those people who haven’t taken DNA tests or uploaded their results to the public internet. Even if you resolve never to put your DNA on a site accessible to law enforcement authorities, you share DNA with many other people so could still be discoverable. All it takes is your sibling, aunt or even a distant cousin deciding differently.

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Surveillance Firm Says Apple Is ‘Phenomenal’ For Law Enforcement

Secret recordings of a surveillance firm’s presentation show how much iCloud data Apple surrenders to law enforcement with a warrant — though it’s Google and Facebook that can track a suspect to within three feet. Apple Insider reports: PenLink is a little-known firm from Nebraska which earns $20 million annually from helping the US government track criminal suspects. PenLink also sells its services to local law enforcement — and it’s from such a sales presentation that details of iCloud warrants has emerged. According to Forbes, Jack Poulson of the Tech Inquiry watchdog attended the National Sheriff’s Association winter conference. While there, he secretly recorded the event.

During the presentation, PenLink’s Scott Tuma described how the company works with law enforcement to track users through multiple services, including the “phenomenal” Apple with iCloud. Apple is open about what it does in the event of a suboena from law enforcement. It’s specific about how it will not unlock iPhones, for instance, but it will surrender information from iCloud backups that are stored on its servers. “If you did something bad,” said Tuma, “I bet you I could find it on that backup.” Tuma also says that in his experience, it’s been possible to find people’s locations through different services, although not through iCloud. “[Google] can get me within three feet of a precise location,” he said. “I cannot tell you how many cold cases I’ve helped work on where this is five, six, seven years old and people need to put [the suspect] at a hit-and-run or it was a sexual assault that took place.” It’s also possible for law enforcement and firms like PenLink which help them, to get location data from Facebook and Snapchat. […]

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New Policing System Will Send Drones To the Source of Gunshots

A new policing system is being developed that will send autonomous drones equipped with shot-locating technology to the source of gunshots. “By analyzing the live video from its onboard camera, police officers can then gain a better sense of the situation they’re heading into,” reports New Atlas. From the report: Already in use in over 120 cities in the US, South Africa and the Caribbean, the American ShotSpotter system utilizes a network of microphones within a neighborhood to detect “loud, impulsive sounds.” Whenever such a sound is detected, its geographical originating point can be triangulated by analyzing the millisecond differences in the times at which it was picked up by the different microphones — the closer a mic was to the gun, the earlier it will have detected the sound of that gun firing. That said, a combination of AI software and human staff (at a control center) is used to determine if the sound is indeed gunfire.

In the existing version of the system, police are quickly dispatched to the location. If they’re using ground transportation, however, it may take a while for them to get there. And even if the police department has a helicopter, performing pre-flight checks, etc will still take some time — assuming the aircraft isn’t already in the air on patrol, that is. With these potential limitations in mind, Israeli drone manufacturer Airobotics has teamed up with ShotSpotter to add autonomous drones to the mix. In the new version of the setup, police will still be dispatched, but so will the closest system-specific drone. That aircraft will be in the air within seconds, immediately flying to the source of the gunshots. By analyzing the live video from its onboard camera, police officers can then gain a better sense of the situation they’re heading into.

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2021 Had Six Different Cryptocurrency Heists Over $100 Million

More than 20 different times in the last 12 months, at least $10 million was stolen from a cryptocurrency exchange or project, reports NBC News.

“In at least six cases, hackers stole more than $100 million…”

By comparison, bank robberies netted perpetrators an average of less than $5,000 per heist last year, according to the FBI’s annual crime statistics… “If you hack a Fortune 500 company today, you might steal some usernames and passwords,” said Esteban Castaño, the CEO and co-founder of TRM Labs, a company that builds tools for companies to track digital assets. “If you hack a cryptocurrency exchange, you may have millions of dollars in cryptocurrency….”

[W]hile a handful of countries have strict regulations in place, it’s relatively easy for tech entrepreneurs to set up an exchange nearly anywhere in the world and run it however they like. Cryptocurrencies generally offer a certain amount of security — taking their name, in part, from “encryption.” But the exchanges that manage them, especially new ones building their businesses from scratch, often start with a tiny staff, which means few if any full-time cybersecurity professionals. Their developers may work frantically to make the code work, sometimes accidentally leaving flaws that give hackers a foothold. Combined with the fact that a volatile market often leaves them suddenly holding a fortune, exchanges are a particularly ripe target for criminal hackers….

The problem is exacerbated because many cryptocurrency projects, intent on avoiding government regulations, set up in countries whose law enforcement agencies don’t have much power to go after transnational hackers. Or if they are hacked, they tend to be less likely to call for government help on ideological grounds, said Beth Bisbee, head of U.S. investigations at Chainalysis, a company that tracks cryptocurrency transactions for both private companies and government agencies. Some developers “want to be anti-bank and anti-oversight,” Bisbee said. “So when something like that happens, they’re not necessarily wanting to work with law enforcement, even though they’d be considered to be a victim and it’d be valuable for them to.”
Ultimately the article points out that “Most exchange hackers are not caught.” (Although in at least one case part of the stolen money was voluntarily returned.)

But what happens after the breach, NBC News asked Dave Jevans, the founder of CipherTrace, a company that tracks theft and fraud in cryptocurrencies.

If an exchange is wealthy enough and plans ahead to have an emergency fund, it can compensate its customers if its operation is hacked, Jevans said. If not, they often goes out of business. “Not every exchange is so wealthy or has so much foresight. It just goes, pop, ‘We’re out of business. Sorry, you’re all screwed,'” he said.

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Judges Read Capitol Riots’ Social Media Posts, Give Them Stricter Sentences

After sentencing one of the “Capitol Hill rioters” to 41 months in prison, a judge added that anyone with Facebook and Instagram posts like his would be “well advised” to just plead guilty right away. “You couldn’t have beat this if you went to trial on the evidence that I saw.”

And other rioters are now learning the same thing, reports the Associated Press:

Earlier this month, U.S. District Judge Amy Jackson read aloud some of Russell Peterson’s posts about the riot before she sentenced the Pennsylvania man to 30 days imprisonment. “Overall I had fun lol,” Peterson posted on Facebook. The judge told Peterson that his posts made it “extraordinarily difficult” for her to show him leniency….

Among the biggest takeaways so far from the Justice Department’s prosecution of the insurrection is how large a role social media has played, with much of the most damning evidence coming from rioters’ own words and videos. FBI agents have identified scores of rioters from public posts and records subpoenaed from social media platforms. Prosecutors use the posts to build cases. Judge now are citing defendants’ words and images as factors weighing in favor of tougher sentences.

As of Friday, more than 50 people have been sentenced for federal crimes related to the insurrection. In at least 28 of those cases, prosecutors factored a defendant’s social media posts into their requests for stricter sentences, according to an Associated Press review of court records….

Prosecutors also have accused a few defendants of trying to destroy evidence by deleting posts.

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