By Derek Berezdivin
April 21, 2015: For a Baruch student and future auditor, the Crazy Eddie case is infamous. Over a decade, auditors, Wall Street and millions more were fooled by cousins Eddie and Sam Antar who ran Crazy Eddie from 1971-1987. As students, we learned about Crazy Eddie in multiple accounting classes; documentaries and innumerable case studies have been made about it as it was one of the greatest embarrassments to the accounting profession.
I have the distinct good fortune of being in the Zicklin Graduate Accounting Society – the ones that invited Sam Antar to Baruch College. As I was waiting for Mr. Antar to arrive and the event to begin in the campus’ main conference room, the ex-president of my club suddenly rushed by with a short, unfriendly and unassuming man. Though it seemed very hard to believe, this had to be the man that had perpetrated one of the largest frauds in American history.
After we spent some time awkwardly introducing ourselves and fumbling for cables to hook up his computer to the projector, we took him into a smaller room where a private lunch had been set up for members of ZGAS. Unabashedly, he sat down at the front of the room and declared that he would answer all our questions. Of the club members, I sat closest to him to help him feel welcome as well as to be able to engage him in conversation. From my angle, I felt he looked decidedly untrustworthy.
As soon as he opened his mouth, however, it was clear he was one of the most engaging, interesting and charming speakers I had ever encountered during my time at Baruch. Ethics don’t help at all, Mr. Antar told us. “I don’t subscribe to a code of ethics. A code of ethics only makes it easier for people like me to take advantage of you.”
Throughout the lunch and presentation, Mr. Antar was unrestrained about how he cheated millions. The crowd was enraptured. “Disarm with charm,” he repeated multiple times. “Appeal to vanity: flattery and compliments will get you everywhere.” One female student asked him how to he got people to like him. He responded, “you’re sexy” – demonstrating for us.
So how did Crazy Eddie fool the auditors for so many years? Simply put, they were experts on human behavior. “I have no problems lying,” he told us. “But distraction is better than a lie.” The demographics of the audit profession used to be made up of mostly single men. All they had to do was distract the auditors with attractive female employees. Mr. Antar took auditors to strip clubs and parties for the majority of their audit. Then, they would find themselves with lots of work to do and little time, rushing their decision-making. It wasn’t that the auditors were stupid, he told us. The auditors simply did not want to believe they were bad people.
Mr. Antar was adamant that he was not reformed. “The Feds don’t know I’m sleeping on a million dollars in my bedroom every night” he told me. I laughed, though a part of me is still unsure whether he was joking. “Don’t trust me? I might be cheating you all right now.” he said as we laughed.
Despite his warnings and reputation, I had a very difficult time believing such a charming man could be so malicious. I could identify with him. After all, why go through the effort of sharing how fraudsters take advantage of others? Why teach us the tricks of his trade? I started wondering if maybe this was just his character, his shtick, his way of showing us what a villain was like. Perhaps deep down he was actually a good guy that had gotten himself into a bad situation. Thinking I might catch him in this apparent paradox, I asked him why he bothered explaining himself. “I like to brag about my accomplishments,” he said. “Is this true?” I pushed. “Yes,” he replied without a second thought.
Crazy Eddie managed to fool auditors for more than a decade. They fooled Wall Street and many investors as well, managing to take their company public and making millions. The cause of their undoing? A hedge fund manager, believing in the integrity of Crazy Eddie’s financial statements, thought he could acquire the company cheaply. Within two months of having acquired it, the manager realized the millions of claimed inventory were nonexistent; Crazy Eddie came crashing down.
“Who here can claim that they have not lied today?” he asked us. Uncertain, I did not raise my hand, but neither did anybody else. I was shocked; these were the accounting hopefuls of the future. It was only noon. Had everybody really lied? How could nobody be willing to hold themselves as an honest person in front of their peers? Was I so naïve to not realize that people lie so often?
It’s human nature, he said. According to Mr. Antar, 80% of people are situationally ethical, whereas only 10% are always either ethical or unethical. Clearly, none of us are really as good as we like to believe. The way Mr. Antar worked the room quickly exposed all of our attraction to power. Are these grim forebodings for those pursuing careers in the field of accounting?
Surprisingly, it was Mr. Antar himself with an answer to this question. We need to increase whistleblower protections and bounties. Nearly 40% of frauds are discovered from tips, as opposed to external or internal audits (as common sense might have you believe). “The state of education is fantasy-land,” says Mr. Antar. “An audit shouldn’t be called an audit, it’s really just a review.” We should be more realistic about accepting human nature and realizing that the AICPA’s, and even society’s, code of ethics is often bent or broken. According to Mr. Antar, it takes a villain like him to expose these issues and give us all a reality-check.
At the end of the event, my accounting club took a picture with Mr. Antar. As we took it, he joked how one of the benefits of these pictures was being able to take them near young, attractive women – causing them to giggle. I continued to refuse to believe he was really so bad, despite his warnings and the evidence to the contrary. I left the event believing I just witnessed something incredible. Two weeks later, though, the only question on my mind is: is he the perfect criminal?
The Zicklin Graduate Accounting Society (ZGAS) hosted “Breaking into Public Accounting” with PricewaterhouseCoopers LLP (PwC) on Thursday, March 26, 2015. This event enabled students to learn more about the firm and gain valuable insights into the accounting field as career changers or simply as students seeking more information.
PwC Campus Recruiting Associate, Whitney R. Green, led the discussion with a brief presentation and then moved on to a panel discussion. The two panelists were David Shifrin and Esther Jung, Associates at PwC.
Whitney began the presentation with an overview of the firm, stating that PwC is part of a huge global conglomerate that participates in not only financial services, but also non-financial services. A valuable resource available to employees within the company is the Integrated Leadership Development Experience, where there are a number of level coaches and technical tools to assess how an employee is performing. Specifically, it offers the PwC Snapshot where one can view how strong he/she is performing and receive real-time feedback from coaches to work towards immediate improvements.
As a PwC Professional, there are five main qualities and skills one would need to embody: whole leadership, business acumen, technical capabilities, global acumen, and relationships. Some important tips mentioned were:
1 ) Self-exploration—you need to think how your technical skills can be used and about where do you want to be. The latter involves not only location, but also position (e.g. partner).
2) Education—what do you need to complete in terms of degrees and certifications?
3) Conduct research (e.g. will the industry that you want to work in be relevant in the next 15-20 years?)
4) Develop a plan—be flexible because not everything will go according to plan.
The discussion ended with a Q&A session with the panelists. A few students asked questions about networking. In response, David and Esther shared their personal networking stories while they were in school and also provided students with valuable suggestions on how to develop their networking skills and become successful career changers. Whitney also shared her stories about how she leads and works with her team.
Ultimately, the event was a success and attendees found it beneficial. The panelists not only provided insight for career changers, but also shared their own stories and provided students with good suggestions for their future careers.
By Lixing Xu and Shimin Hao
On April 14, 2015, the Zicklin Graduate Accounting Society (ZGAS) hosted “On Campus Recruiting (OCR) Declassified.” As many of us know, OCR is the best opportunity for a student to gain a foothold on their dream job. Since many students do not understand the OCR process and how to take advantage of this opportunity, we invited five current Baruch students to share their stories on how they successfully received offers during the previous OCR season. The main agenda of this event was to share OCR experiences and insights with the students, and ultimately, give them ideas on how to build their own strategies during the upcoming recruiting season.
During the event, the moderator, Nikki Gao, asked our panelists common questions, such as how they prepared for OCR, their networking strategies, and “dos and don’ts” for the OCR process. Many panelists expressed that we should fully exploit the services offered at the Graduate Career Management Center (GCMC). For example, we can find our strengths and weaknesses through mock interviews, and have our resumes and cover letters reviewed at the Resume Clinic.
Undoubtedly, building a strong personal network is a crucial element of landing a job; however, the networking process could be difficult, if not frustrating, for many of us. Fortunately, our panelists gave us helpful advice on how to standout during networking sessions:
After the panel, through a roundtable discussion, students had the opportunity to interact closely with panelists to ask them questions and attain tips. Many students enjoyed the conversations in this collegial atmosphere, and in the end, we were glad to see that everyone had key takeaways from this event.
Again, OCR is the best way to land internships and full-time jobs, but the competition is high. How to stand out amongst hundreds of peers can be difficult. Through our event, students can now better prepare themselves for the coming fall recruiting season. We wish all students a lucky and successful OCR season this fall.
Hello ZGAS Members,