The ties that bind Sam Antar and Barry Minkow

3 min read

What seems to bother critics of more than anything else is their inability to disprove the things written here.

That’s because deals in facts. Period.

Often, having made my case, I’ll take the additional step of drawing conclusions based on the facts. It’s never easy leaving the comfort of what I know to be true for what I suspect is true — particularly when reputations are involved. Yet, with a single (quickly rectified) exception, every conclusion extrapolated here has proven accurate.

And, in at least one case, my conclusions have proven much more accurate than even I could have anticipated.
To learn more about that case, let us return to June of 2007.

At that time, I concluded that convicted stock manipulator Sam Antar and securities class action litigator Howard Sirota were working in concert with convicted stock manipulator Barry Minkow’s Fraud Discovery Institute (FDI) to manipulate the share price of USANA, a public company.

You can review my reasoning (which, I urge you to keep in mind, Sam Antar characterized as being “filled with deception, innuendo, deflection, insensitivity, and arrogance”) here.

Many things have happened since the post was published, most notably the deposition of Minkow, whom USANA is suing for reasons that I expect will soon appear obvious. You may access the deposition transcript, in two parts, here and here.

In his deposition, Minkow confirms that to say he and Sam Antar were “doing business together” was the understatement of the fiscal year.

Minkow states, under oath, the following:
At some point in the past two or three years, Sam Antar came to be a “spiritual advisor” to Minkow. But unlike a traditional spiritual advisor, Antar didn’t ask for money…he was handing it out.

According to Minkow, in mid-2006, Antar sent him, unsolicited and with no strings attached: $100,000. This was Antar’s way of saying: “Thank you…you’ve been an example for me that you can come back from failure.”

Shortly thereafter, and by pure coincidence, Minkow decided to use Antar’s money to finance FDI’s attack on USANA, which was published and delivered to the SEC on February 20, 2007 (precisely the same day as Minkow’s second book was published), but not before Minkow established a short position in USANA stock, as well as investing in put options (both of which gain value as a stock loses value).

Minkow says that in total, Antar’s support for FDI has exceeded $250,000.

Additionally, Minkow disclosed two payments totaling $40,000 by hedge fund manager (and frequent Herb Greenberg advisor) Whitney Tilson, and $10,000 by Anthony Bruan, owner of Cactus Capital.

Remember Howard Sirota? Bruan is a long-time Sirota law client, dating back to some high-profile scrapes with the securities laws in 2001.

Sam Antar is also a long-time client of Howard Sirota’s law practice.

For those of you keeping score at home, that means at least $260,000 – nearly 90% – of the disclosed $300,000 used to finance FDI’s attack on USANA, came from associates of Howard Sirota, who makes a living leading shareholder lawsuits against public companies, à la Milberg Weiss.

Here’s where things get strange…
Consulting public records, I discovered that on February 27, 2007 (seven days after FDI’s USANA report was released), the New York State Department of Taxation and Finance issued a warrant for unpaid taxes against Sam E. Antar, in the amount of $473.15.

A bankruptcy attorney I consulted with on this issue cautioned that from time to time these warrants are filed erroneously. Hoping to rule out that possibility, I conducted a deeper search and discovered that unpaid taxes are nothing new to Sam Antar. Indeed, between 1987 and 2007, Antar amassed over $333,000 in tax liens, warrants and judgments on the city, state and federal levels, in addition to just under $60,000 in judgments and liens by private creditors in 1992 and 1993.

None of these debts was discharged by Antar’s Chapter 7 bankruptcy filing in 1998.

My point being, Sam’s history suggests this most recent – and nearly one year later, unsatisfied – tax warrant was not the result of an error.

And yet, from Minkow’s deposition, we’re supposed to believe that someone who can’t pay a $500 tax bill is in a position to give Minkow gifts totaling at least $250,000 – motivated by nothing more than the spirit of fraud fighting?

As noted in my earlier post on this topic, Howard Sirota was caught bashing (though in an unusually civil manner, to his credit) USANA stock on Yahoo Finance under the screen name StanleySargoy. In his first such post, dated April 14, 2007, Sirota declares (and Minkow’s deposition later confirms) that Sirota was shorting USANA stock, in addition to being long USANA put options.

Interestingly, five trading days later, USANA appeared on the Reg SHO Threshold Securities list for the first time.

Whether or not Sirota’s short position was a legitimate one, this post to Yahoo Finance by StanleySargoy in 2003 shows Sirota’s clear understanding of the relationship between public perception of a company and its share price, and of the value of using the media and other venues to spread negative information specifically for the purpose of lowering share price.

Based on these facts, I am led to conclude:

  1. Sam Antar’s $250,000 “gift” wasn’t a gift, but the cost of a commissioned, negative report on USANA, intended to adversely impact USANA’s share price.
  2. The money Antar gave Minkow wasn’t Antar’s at all. I suspect it belonged to someone else using Antar as an intermediary.
  3. In addition to shorting USANA, Sirota likely intended to lead one of the (several) class action suits brought against the company in the months following release of Minkow’s report. That he did not do so just might be a consequence of his having been identified as StanleySargoy in this blog.
  4. Finally, but likely most importantly, is my belief that this is a clear case of illegal stock manipulation.

If this sounds implausible, please remember that it is precisely the sort of activity Sirota’s counterparts at the law firm of Milberg Weiss are accused of engaging in. To learn more, you may either read this 105 page indictment of Milberg Weiss, or (as I would recommend) invest a few minutes watching an excellent presentation explaining how this sort of thing is happening on a broader scale than you could possibly imagine.

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8 Replies to “The ties that bind Sam Antar and Barry Minkow”

  1. Learn to read a deposition….
    [i] “Minkow states, under oath, the following:
    At some point in the past two or three years, Sam Antar came to be a “spiritual advisor” to Minkow. But unlike a traditional spiritual advisor, Antar didn’t ask for money…he was handing it out.”[/i]

    The deposition clearly states that Barry Minkow serves as a Senior Pastor in a San Diego Church and that he served as Antar’s “spiritual advisor”, not the other way around.

    [i]”Sam Antar’s $250,000 “gift” wasn’t a gift, but the cost of a commissioned, negative report on USANA, intended to adversely impact USANA’s share price. [/i]

    Again the deposition identifies that there was an initial $100K gift prior to (and acording to Minkow unrelated to) the USANA investigation. The follow on support by Antar (in the $125K-$150K range) was only after the lawsuit against Minkow was filed and was used towards the costs of Minkow’s defense.

  2. Barry Minkow is definitely corrupt. He’s been on the wrong side in the past and now he’s back to good old Barry. Thanks, for the great information.

  3. Weird, I always saw Tilson posting a lot of housing bubble skepticism even when folks didn’t want to hear it.. Was he sold a bill of goods or is he really a part of this? twould be a shame indeed…

  4. …Coenen said she knew three years ago when she linked up with Minkow that she was putting her reputation, and that of her one-person company, Sequence Inc., at risk. She is one of the targets of a $270 million lawsuit filed in February against Minkow, Lobdell and others by Medifast Inc., which the institute investigated….
    above quote from “Ex-con now walks a financial tightrope”
    By Cary Spivak of the Journal Sentinel Posted: April 3, 2010 |
    another quote from the same article:
    …Lobdell, the former L.A. Times reporter hired by Minkow, edits the fraud institute’s iBusinessReporting. Lobdell notes on that Web site’s home page that his site is funded by the institute, which gets its money “in part, by short selling the stock of companies that it thoroughly investigates and deems fraudulent and/or lacking a sustainable business model.”

    Lobdell said he personally shorted the stock of InterOil Corp., a Houston company that iBusinessReporting has examined. InterOil said in a statement that Lobdell’s reports, including one about a bankruptcy case involving a company controlled by Inter-Oil’s CEO, “was timed to benefit recent short selling activities.”

    Lobdell said he shorted the stock in part because of the criticism he’s received since going to work for Minkow. “I’m getting hammered anyway,” Lobdell said. “I don’t think it makes any difference  . . . whether it’s Barry shorting the stock and paying me or me just doing it myself.”

    Bob SteeleiBusinessReporting, an expert on media ethics now at DePauw University in Indiana, was stunned that an editor on a reporting Web site would not see the ethical issue.

    Lobdell is a “person with a financial stake in the company, so it raises real questions about fairness,” Steele said. “I’m astonished that he would not see it as a problem.”…

  5. Medifast, Inc. et al v. Minkow et al
    Plaintiffs: Medifast, Inc. and Bradley MacDonald
    Defendants: Barry Minkow, Fraud Discovery Institute, Inc., Robert L. Fitzpatrick, Tracy Coenen, Sequence, Inc., William Lobdell, iBuisness Reporting and Zeeyourself

    Case Number: 3:2010cv00382
    Filed: February 17, 2010

    Court: California Southern District Court
    Office: San Diego Office [ Court Info ]
    County: XX US, Outside State
    Presiding Judge: Judge Janis L. Sammartino
    Referring Judge: Magistrate Judge William McCurine Jr.

    Nature of Suit: Torts – Injury – Assault, Libel, and Slander
    Cause: 28:1331 Fed. Question: Personal Injury
    Jurisdiction: Diversity
    Jury Demanded By: Plaintiff

  6. I was questioning should you ever regarded as changing the layout of your blog? Its extremely effectively created; I love what youve received to say. But possibly you may a small significantly more within the way of subject matter material so people could connect with it much much better. Youve got an terrible great deal of text for only getting one or two pictures. Maybe you could room it out better?

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