Barry Minkow
Barry Minkow (born March 17, 1967) was an American teenage entrepreneur who managed to present the front of a successful businessman for years.
Minkow learned his business manners from his mother's job as a telemarketer. At the age of 15 he started his own carpet cleaning company, ZZZZ Best, in his parent's garage in Roseda, California. In four years it had 1400 employees and had begun to specialize in insurance restoration business.
Minkow worked hard to form dozens of business contacts. His most important contact was Tom Padgett of Interstate Appraisal Services, an insurance claims adjuster who could get large restoration contracts. He was presented as a business success story in magazines and TV shows. Mayor of Los Angeles Tom Bradley declared a Barry Minkow Day. He lectured in business schools and contributed to Narcanon. He had a Ferrari Testarossa and a mansion in Woodland Hills. ZZZZ Best' stock raised to $18 a share on Wall Street for a total of more than $280 million.
However, behind the scenes his company was nothing more than a front to attract investment for a pyramid scheme. ZZZZ Best did not clean any carpets but generated a plausible paper trail to fool potential investors. Interstate Appraisal Services was formed to support this fraud. Minkow raised money by factoring his accounts receivable for work under contract. One of the first contracts he recieved was from the Genovese Mafia family. He hired reputable accountants and lawyers to boost his image. Later he claimed that he had intended to form a legitimate business empire and pay back everything, nobody being the wiser. He hoped to attract public stock offering that he would not have to pay back.
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 to complete the building in twenty days.
He almost got away with it. Magazines and TV shows did not bother to check his background. Investigations by the Securities and Exchange Commission, the FBI, two accounting firms and various individual investigators found nothing. ZZZZ Best was about to buy a rival carpet cleaning company KeyServe when their stock suddenly plunged due to unfavorable press reporting and the FBI investigation of Minkow's link to the Genovese family. Minkow gave himself up in 1987.
The court's approximation of the extent of fraud was $26 million. Eleven ZZZZ Best insiders were convicted of fraud alongside Minkow, who got 25 years in prison. He served just under seven and a half years.
While in prison Barry earned a B.A. degree and a Masters of Arts degree in Church Ministries (with an emphasis on Theology and Apologetics) from Liberty University. In 1996 he earned yet another degree, a Masters of Divinity, also from Liberty. After his early release from prison, he went to work at the Church at Rocky Peak as Director of the Bible Institute and Pastor of Evangelism.
Since 1997 he has been the senior pastor of San Diego, California's Community Bible Church.
Mr. Minkow also is an executive at the Fraud Discovery Institute in San Diego.
