Barry Minkow

Barry Minkow (born March 17, 1967) was an American teenage entrepreneur who managed to present the front of a successful businessman for a number of years during the 1980s. He was convicted of fraud and became a prison inmate for over 7 years subsequent to his misdeeds. During his time in prison Minkow became involved in Christian ministry, which continued upon his probationary release from prison in April, 1995. Today he is senior pastor of a San Diego, California church, having renounced and forsaken his previous misdeeds. Minkow is also a recognized fraud expert, and speaks on the subject to university students and the business community in an effort to prevent fraud.

Zzzzenith

Zzzz Best went public on the stock market in 1986. When accountants wanted to inspect Zzzz Best's operations, Minkow borrowed fake offices for a tour of Interstate Appraisal Services and used an incomplete building to present a fake restoration job. He used $2 million (USD) to complete the building in twenty days.

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There were signs of problems, but investors chose to ignore them. The company's Chief Financial Officer also owned a florist business, and that company was accused by customers of having stolen over $92,000 by charging flowers to their credit cards without authorization. Minkow decided to ignore these allegations, and short-sellers including the Feshbach Brothers, took positions betting that the stock would fall.

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Magazines and TV shows did not bother to check his background. Investigations by the U.S. Securities and Exchange Commission, the FBI, two accounting firms and various individual investigators found nothing. Minkow bribed a security guard to give him access to a newly constructed building in Sacramento, California, so that he could present it to his auditors as a wreck that Zzzz Best had recently finished restoring. Zzzz Best was about to buy rival carpet cleaning company KeyServe when their stock suddenly plunged. Members of the press had been researching the company, and communicating with short-sellers who had done their own research. These investigations indicated that that the company's contracts had been largely fictional. The story ran in the Los Angeles Times, and spurred FBI investigation of Minkow's link to the Genovese crime family and white separatists movements. Minkow gave himself up in 1987.

Related Topics:
U.S. Securities and Exchange Commission - FBI - Sacramento, California - Los Angeles Times - 1987

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