Zackariya: Travel Is Key to Growth & The billions on the travel Industry

Now that Christmas is just around the corner and on the intense search of 1 Million Euros in less than 5 years, welcome to my journey,  I find myself packing for a weekend retreat on the Finnish forest. I ´m  pleased to announce a guest post article By: Sacha Zackariya, CEO, ChangeGroup and CNBC-YPO Chief Executive Network Member.

The United States of America – which has the world's biggest economy with a GDP of about $15 trillion - is now showing tentative signs of a turnaround. This is reflected in the growth of the labor market with stabilizing house prices and increasing consumer confidence. Hopefully, the green shoots of recovery are finally sprouting. 

Not surprisingly, overseas investment bodies are moving back after retreating during the financial crisis. A large proportion of U.S. foreign direct investment (FDI) comes from European countries - which can partially be attributed to the flight of capital from the debt ridden, shaky economies of Europe. Despite competition from rising emerging economies such as China, there is a strong belief among investors that the worsening Eurozone crisis could make the U.S. a safe haven, thus adding further fuel to U.S. recovery.

One of the sectors showing remarkable growth in the U.S. is the tourism industry. My company, ChangeGroup, is a provider of financial services to the international traveler and is thus strongly linked to the growth of the travel and tourism industry. During recent years, we have supported a big success factor in the U.S. economy: International inward tourism. We have opened a range of new ultra-prime, currency exchange shops in Manhattan, committing several million dollars and recruiting many new employees. Most importantly, our branches allow international tourists and visitors to change their holiday money, worth tens of millions U.S. dollars, into currency to be spent in local stores.

Our U.K based travel money online service has seen a dramatic surge in the demand to exchange pounds to dollars. In order to cater to the increased number of tourists, the hotel industry is rapidly expanding with 50 new hotels set to open in New York City alone by 2013. The Australian mall operator, Westfield, has signed a $ 1.25 billion deal to lease retail space at the new World Trade Center in 2015. The U.S. government has also taken many initiatives to promote tourism, creating "Brand USA" – a public-private partnership - to market the U.S. as a leading global tourist destination.

Brand USA reports travel to the U.S. from emerging economies, such as Brazil, China and India, is up 110% during the 10-year period leading up to 2010, resulting in nearly $15 billion in export revenue. Initiatives proposed by the U.S. government to relax visa rules and streamline the process for tourists would further positively impact this growth.

According to the U.S. Travel Association, the United States travel and tourism industry was one of the largest employers in 2011, supporting 14.4 million jobs and generating $194.6 billion in payroll. Job growth in the travel industry was 84% faster than in the rest of the economy between March 2010 and July 2011. One out of every eight jobs depends on this sector. And it has been estimated that each U.S. household would need to pay $1,055 more in taxes without the tax revenue generated by tourism and travel.

If fully exploited, the travel sector could efficiently power the economic recovery of the United States and further strengthen its position as a global economic powerhouse.

Sacha Zackariya is CEO of the travel money and international payments companyChangeGroup.

Crazy Eddie & The 100 Million

Now that we are entering the Christmas season, just few more days and December is here, the wind rises electric, the snow is about to fall and the temperature is about to drop under. 

This season makes me wonder about my intense pursue of the Million euros in less than 5 years, all is set a great season of accomplishments is just waiting, this season also reminds me of the intense shopping spree that we all will be witness, it also reminds me of Con Artist Crazy Eddie  he built a family business that grew into a huge chain of electronics stores with rock-bottom prices.  It was also a criminal operation driven by lies and phony inventory.

In New York City in the 1980s, you almost couldn’t escape from Crazy Eddie.  The discount electronics stores were all over the Northeast; flip on a TV, and you’d inevitably catch an ad.  The wild-eyed character in those Crazy Eddie ads, who ranted about the “insaaaaaaane” deals, was hard to ignore.  But it wasn’t just aggressive marketing behind the company’s success.  From phony inventory to fictitious earnings, nothing about Crazy Eddie was as it appeared.




Eddie Antar opened his first electronics store in 1969 with his father, Sam.  From the start, he stocked the shelves of his Brooklyn store with the lowest priced electronics.  With those prices, Antar broke the fair trade laws that forced retailers to sell their goods at prices set by the manufacturers.  The deals, and the store’s loose atmosphere, attracted consumers.  Why shop at a stuffy department store when you could listen to a stereo at top volume and get it for a better price at Crazy Eddie? 

By 1973, the store was recording sales of more than $100 million.  Beyond that boom, Antar had little tricks for creating profit.  He hired nearly every member of his family and paid them off the books. He declined to report cash sales to the IRS and collected insurance claims for fires and floods that never happened.  His cousin, Sam Antar, handled the company’s crooked finances; he estimated they skimmed about $1 for every $5 that came in.

As the dollars piled up, the Antars expanded their empire.  By 1984, there were 39 Crazy Eddie stores across the Northeast.  Even people who didn’t shop for bargain electronics knew about the chain; endless commercials with an actor talking fast and frantic created a memorable brand for Crazy Eddie and carved out its place in the popular culture.

Antar also relied on his shrewd intuition to assess consumer interest in the latest technology.  When VCR’s and compact disk players hit the market, he made sure people knew to come to Crazy Eddie for the best deals.  Annual sales climbed to $350 million in 1984, but Antar wanted more.  He wanted to take Crazy Eddie public.  

Before the initial public offering, an auditor came in to take stock of the company.  The auditor didn’t realize that many of the boxes of inventory he saw piled to the ceiling were empty – or that the attractive saleswoman who climbed a stepladder to assist in the tally was calling down fictitious numbers.  The ploy to overstate the company’s assets worked and, in 1984, Crazy Eddie went public and sold two million shares at $8 apiece.  

This wild overstating of inventory became a profitable pattern for the Antars.  At the end of 1985, the family nudged the numbers $2 million above what actually existed in their warehouse.  Crazy Eddie stock looked terrific and rose to as much as $21 per share.

Antar made about $68 million by selling his stock.  Between that windfall, the brisk sales and all that was skimmed off the top, cash poured in quickly and at a tremendous volume.  To avoid paying taxes, the Antars took monthly trips to Israel – with huge amounts of cash literally strapped to their bodies.  The courier would land in Tel Aviv and deposit the funds into a bank; those funds were then wired to an account in one of a handful of countries where the family had dummy companies.  Slowly, the money was pulled out of Panama and deposited – at specific moments timed around an audit – into several Crazy Eddie bank accounts.  Of course, those deposits were booked as revenue.

The scam, and the Antar family, came apart in 1987.  Antar’s father and his two brothers, who held important positions at the company, were fired or resigned.  On top of a bitter family feud, the cash flow necessary to sustain the fraud dried up.  As other retail outlets adopted Crazy Eddie’s low prices, the market became saturated with cheap electronics.  At the end of the first quarter of 1987, Crazy Eddie profits dropped 93 percent. 

Antar sold his stake in the business in 1987.  It didn’t take the new owners long to discover that only half the amount of inventory listed on the books actually existed.  Within two years, Crazy Eddie declared bankruptcy.  When the SEC filed an action against Eddie Antar in late 1989, he fled the country.  He hid in Israel for two and a half years before being captured and extradited.  While on the lam, his cousin Sam Antar pleaded guilty to fraud and agreed to testify against his family for a more lenient sentence.  

During Eddie Antar’s trial, he said he disappeared to avoid his ex-wife's play for alimony.  His defense attorney argued that the mastermind of the con was actually Sam Antar – who received house arrest in exchange for his testimony.  The jury was not convinced.  Eddie Antar was convicted in 1993 of conspiracy, racketeering and securities and mail fraud.  He served eight years of his 12 ½ year sentence.  



Today, Sam Antar has a website where he maintains a blog, and calendar of speaking engagements.  Eddie Antar lives a quiet life in his native Brooklyn.