Story Archive

Con Pro

In 1986 at age 18, Barry Minkow was the youngest person ever to take a company public in the stock market. But his ZZZZ Best Carpet cleaning company in Los Angeles, Calif., was mostly funded by a $100 million Ponzi fraud scheme, and the company collapsed in 1987; Minkow was sentenced to 25 years in prison. In 1995 he was released after a jailhouse conversion to Christianity, and he became a pastor at the San Diego Community Bible Church. On the side, Minkow helped the FBI investigate fraud schemes — and profited by shorting the stock of the companies being investigated just before the reports came out. He has been sentenced to five years in prison for that scheme. Meanwhile, Minkow has also pleaded guilty to embezzling $3 million from his church, at least some of which went to fund his fraud investigations. Minkow, now 46, has not fully paid the ordered restitution for his original scam; he has been ordered to pay $580 million more in the stock fraud. (RC/AP) ...So next time he’s out, he’s going to really go for it.
Story Update: Minkow was sentenced to five years in prison in this case, the maximum possible under his plea bargain, to be served after Minkow completes his sentence for securities fraud. Minkow also reached an agreement with federal prosecutors that called for him to pay $3.4 million in restitution, though it’s unlikely the victims will get it: Minkow had said earlier that the $26 million restitution for the ZZZZ Best scam alone was large enough that he would be writing restitution checks to the victims for the rest of his life. Minkow was released from prison in June 2019.
Original Publication Date: 09 February 2014
This story is in True’s book collections, in Volume 20.

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