Barry Minkow
| Barry Jay Minkow | |
|---|---|
| Born |
March 22, 1966 Inglewood, California |
| Occupation | Carpet-cleaning company owner, fraud investigator, pastor |
| Criminal charge | 1988: Racketeering, securities fraud, embezzlement, money laundering, mail fraud, tax evasion, bank fraud, credit card fraud 2011: conspiracy to commit securities fraud 2014: Conspiracy to commit bank fraud, wire fraud, mail fraud and to defraud the United States |
| Criminal penalty | 1988: 25 years in federal prison, five years' probation, $26 million in restitution 2011: Five years in federal prison, $583.5 million in restitution 2014: Five years in federal prison, $3.4 million in restitution |
| Criminal status | 1988: Released in 1995 2011: Incarcerated at Federal Medical Center, Lexington; Federal Bureau of Prisons Register #87560-012; earliest release date June 6, 2019 |
| Conviction(s) | December 14, 1988 2011: Pled guilty on March 30 2014: Pled guilty on January 22 |
Barry Jay Minkow (born March 22, 1966) is an American former businessman, pastor, and convicted felon. While still in high school, he founded ZZZZ Best (pronounced "Zee Best"), which appeared to be an immensely successful carpet-cleaning and restoration company. However, it was actually a front to attract investment for a massive Ponzi scheme. It collapsed in 1987, costing investors and lenders $100 million—one of the largest investment frauds ever perpetrated by a single person, as well as one of the largest accounting frauds in history. The scheme is often used as a case study of accounting fraud.
After being released from jail, Minkow became a pastor and fraud investigator in San Diego, and spoke at schools about ethics. This all came to an end in 2011, when he admitted to helping deliberately drive down the stock price of homebuilder Lennar and was ordered back to prison for five years. Three years later he admitted to defrauding his own church and was sentenced to an additional five years in prison. As a result of his crimes, he faces having to pay a total of $612 million in restitution—an amount that he will likely spend the rest of his life repaying.
Minkow was born in Inglewood, California to a Jewish family, and was raised in Reseda, Los Angeles. When he was nine years old, his mother got him a job as a telemarketer with the carpet-cleaning business where she worked. At the age of 15, while a sophomore at Cleveland High School, Minkow started ZZZZ Best in his parents' garage with three employees and four phones. In the early years, he had to rely on friends to drive him to jobs since he did not have a driver's license.
At first, Minkow struggled to meet basic expenses. Two banks closed his business account because California law did not allow minors to sign binding contracts, including checks. He was also plagued by customer complaints and demands for payment from suppliers. At times, he found it difficult even to meet payroll. Faced with a shortage of operating capital, he financed his business via check kiting, stealing and selling his grandmother's jewelry, staging break-ins at his offices, and running up fraudulent credit card charges.
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