The “Panama Pump” Money Laundering Scheme - Cash skimmed from Crazy Eddie before its initial public offering was laundered back into the company after it went public to inflate revenues and reported profits.(3) 1984-1987: As a public company, Crazy Eddie overstated income to help insiders dump stock at inflated prices using a variety of fraudulent tricks: (2) 1980-1984: Gradually reducing skimming to increase profit growth in preparation for the initial public offering, i.e., committing securities fraud by “going legit” (1) 1969-1979: Skimming and under-reporting income (tax fraud) prior to the big plan to go public. Our Crazy Eddie crime spree evolved in three phases: Three Easy Steps from Skimming Profits to Accounting Fraud, Securities Fraud, and Conspiracy Morality, ethics and justice are for the other guys – the victims. The evolution of the Crazy Eddie crime drama illustrates how petty, easily rationalized criminal infractions can escalate into serious and complex frauds and conspiracies, without so much as a thought given to concepts such as morality, ethics and justice. However, our 18-year crime spree conducted in the light of day serves as a fascinating case study of the multiple methods of deceit that white-collar criminals routinely engage in. The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoff’s Ponzi scheme, frauds in the subprime mortgage market, the AIG bailout, and Goldman Sachs’ failure to disclose.
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