EARLY next year an Israeli court is expected to decide whether to extradite Eddie Antar, better known as the founder of the now-defunct electronics store, "Crazy Eddie," and best known for the advertising line, "Our prices are insane."
According to the United States government, there was more than insanity involved. The US wants to try Mr. Antar for racketeering, conspiracy, filing false statements with the Securities and Exchange Commission (SEC), and fraud in the sale of securities. Antar fined $85 million
The SEC has already won a default judgment against Antar who will be forced to pay about $85 million including interest and penalties. The charges stem from 1988 when the company withdrew its past financial statements after the disclosure that there were major irregularities.
Antar, who became an Israeli citizen after he allegedly committed the crimes, is currently in jail in Israel. The US government has identified and frozen $60-$70 million in his assets which were deposited in Swiss banks and various hiding places.
Antar is fighting the extradition attempt. Even if the Israeli court rules against him, his lawyer says Antar will appeal, which could take up to a year.
"We think he will be extradited but we want full protection under Israeli law until he is ordered back," says Antar's lawyer, Jack Arsenault of the Chatham, N.J., firm of Arsenault, Donohue, Sorrentino & Faffett. Mr. Arsenault says Antar maintains his innocence.
Antar is claiming that the US charges are not crimes in Israel and that he was an Israeli citizen prior to the charges being brought. An Israeli law, known as the Begin amendment, protects Israeli citizens from extradition for crimes committed outside of Israel.
"Generally speaking the crimes were committed when Antar was a US citizen," replies Paul Weissman, the federal prosecutor in the case which is filed in Newark, N.J. If Antar eventually goes to trial, he could potentially face 100 years in prison.
At least one lawyer says Antar is intentionally stalling. "He hopes to drag out the process so hopefully the Likud [Party] will return to power," says Howard Sirota, a lawyer with Sirota & Sirota, who is representing shareholders in a RICO (Racketeer, Influence and Corrupt Organizations) suit against Antar. When the conservative Likud Party was in power, Antar avoided jail in Israel. As soon as the Likud fell, Antar was arrested. "If the Likud is back in power, Eddie is out and disappearing the next day, " Mr. Sirota says. Some Jews back extradition
At least one influential Jewish organization is backing extradition. Jeffrey Sinenski, civil rights director for the Anti-Defamation League in New York, says "without making a determination if the charges are true, the charges clearly lend themselves to an extradition situation."
If Antar is ordered to leave Israel, he will be the most famous personality asked to leave the country since Meyer Lansky, a mobster, was refused entry in 1972. If the Israeli court rules against extradition, Sirota predicts, "It will encourage more Jews to commit fraud and run away to Israel."
Antar is likely to lose most of his personal wealth, which Sirota estimates at about $100 million. Most of the frozen assets are expected to be returned to the US and eventually distributed to those who were defrauded. Antar's lawyer estimates there have been default judgments rendered against Antar for about $260 million.
In 1989, Sirota filed a civil suit against Antar who was still in the US. After Antar fled, Sirota obtained a judgment against Antar. "Anyone who can show they bought the stock during the fraud and suffered losses, can make application for the funds," says Sirota, who estimates about 10,000 investors could be eligible.
Sirota is also trying to bring a RICO suit against the four joint underwriters of Crazy Eddie stock, the officers and directors of the company, and the accounting firm of KPMG Peat Marwick. Sirota is asking for $300 million in compensatory damages for shareholders from when the company went public in 1984 to January 1988 when the company announced a $65 million inventory shortfall and withdrew its previous financial statements. Under the RICO statutes, the penalty could be trebled to nearly $1 billion. T he case is still in an early stage.
Barbara Kraft, a spokeswoman for KPMG Peat Marwick, says: "We feel there is no basis for this claim by Sirota. Other management has admitted to committing fraud and perjury and purposely lying to our firm." A lawyer for Weil, Gotshal & Manges, who represents the underwriters, declined to comment for this article.