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Tag: Barry Minkow

  • RECOMMENDED READING: Fortune Magazine On The Manipulations Of Recidivist Con Man Barry Minkow — And Deseret News On The Sentencing Of Utah Ponzi Schemer Travis Wright In Front Of A ‘Couple Of Rows Of Eagle Scouts’

    EDITOR’S NOTE: This post contains links to recommended reading on Barry Minkow and Travis Wright — the former a classic narcissist and con man doing his second stint in federal prison after having played the redemption circuit for years, the latter a man who used other people’s money to ensconce himself in the lap of luxury, surround himself  with gaudy taxidermy such as a full-body African lion — and once reportedly paid $150,000 to have a swimming pool at his tony digs moved eight feet to make his life more perfect.

    The stories on Minkow in Fortune magazine and Travis Wright in Deseret News are intriguing and, we believe, socially significant. Both provide plenty of fodder for rumination as America continues to confront an epidemic of white-collar fraud . . .

    Barry Minkow first rose to national infamy as a con man who’d managed to dupe investors and Wall Street before he was old enough to sip a cocktail legally in many jurisdictions. The spectacular rise and fall of his ZZZZ Best carpet-cleaning business became one of the great cautionary tales of the 1980s.

    Minkow was sentenced to federal prison for the ZZZZ Best caper, but reportedly embraced Christianity while jailed and later was freed. He became a pastor who doubled as a fraud analyst and television commentator.

    But Minkow, now 45, is back in prison. Fortune magazine explains why in its Jan. 16 issue — and also reports that Minkow appears to have let it slip during the filming of a movie on his life that he was up to no good again. Here is an outtake:

    “Finally, one day in September 2009, recounts Meyers, he was in the production booth with headphones on when Minkow and James Caan were schmoozing between takes. Perhaps forgetting about the open mike in his lapel, Minkow leaned over to Caan and whispered, “I financed this movie by clipping companies,” Minkow said.

    “Clipping,” of course, is a slang word for “swindling.” Minkow says the incident “never happened.” “Not ever,” he wrote Fortune in an e-mail in September. “And have him produce the tape.”

    Fortune reports that the tape was produced and that “Minkow said it.”

    And Fortune reports plenty of other things, including an assertion that some people working on the film were getting paid in strange ways.

    Read the Fortune story.

    Separately, Deseret News is reporting that Utah Ponzi schemer Travis Wright has been sentenced to 10 years in federal prison.

    Here is an outtake from the story in the Deseret News:

    “A couple of rows of Eagle Scouts in court to support a former Scoutmaster-turned-criminal might have backfired against a convicted Ponzi scheme operator Friday.”

    Going to court to observe proceedings as part of a civics lesson is one thing. But should Eagle Scouts assemble in court to show “support” for a man facing sentencing for one of the largest frauds in Utah history?

    In Ponzi schemes — as longtime observers and victims know all too well — the visuals often are incongruous. In the AdSurfDaily case, for instance, some members who openly described themselves as people of faith looked on and said nothing as ASD President Andy Bowdoin claimed the prosecution was the work of “Satan” and compared the U.S. Secret Service to the 9/11 terrorists.

    It’s our hope that the scouts were present at Wright’s sentencing to receive an education on how Ponzis alter lives and futures, not as stage props for Wright. And we also hope that Wright, post-release, shows the scouts that redemption is not just a religious or penal theory and that he doesn’t backslide like Minkow and become a slave to self-absorption.

    Read the full story on Wright’s sentencing in the Deseret News, which notes that “several” victims were crying in the courtroom.

    NOTE ON ADDITIONAL RECOMMENDED READING: “The Salon of Famous Babies,” a classic poem by Irving Feldman, is not about Ponzi schemes. But if a Ponzi schemer or narcissist’s “daydream of glory” has sucked the joy from your life, you very well might find that the poem gives voice to your feelings of anger and provides a measure of comfort.

    Visit the Virginia Quarterly Review to read “The Salon of Famous Babies.”

    “As well teach ducks to drown as teach him not to take it all as owed the world’s own son and heir.” — From “The Salon of Famous Babies” by Irving Feldman, American poet

  • BULLETIN: Barry Minkow, Ponzi Fraudster Turned Pastor And Investigator After 7 Years In Slammer, Charged Criminally In Stock-Manipulation Scheme

    Barry Minkow, who presided over a colossal Ponzi scheme as a young man, spent seven years in federal prison and emerged to become a church pastor and tell the world he no longer was a criminal, has been charged criminally in Florida in a stock-manipulation scheme.

    Minkow, 44, allegedly induced law enforcement to open a probe into Lennar Corp., a homebuilder, by lying and then putting himself into position to profit from his lies by “trading Lennar securities for his own personal benefit,” federal prosecutors said.

    He was charged with conspiracy to commit securities fraud that involved his misuse of “material nonpublic information,” prosecutors said, saying Minkow had advanced a “shared unlawful plan” to hurt Lennar.

    Minkow is expected to plead guilty. He faces a maximum of five years in prison.

    After being convicted of operating the ZZZZ Best Ponzi scheme, one of the most notorious fraud cases of the 1980s, Minkow entered prison. He turned to the ministry after his release, and also founded the Fraud Discovery Institute in San Diego.

    Cultivating relationships with both the media and law enforcement, he told the world he now was wearing the hat of the fraud-busters, not the hucksters.

    Court documents identify him as a confidential FBI informant. But prosecutors now say he orchestrated a slime campaign against Lennar in 2009 with the intent of helping a co-conspirator who claimed he was owed money squeeze cash and stock out of the company.

    “When false statements are disseminated to deceive the investing public, whether they’re designed to prop up a company or tear it down, the FBI will dedicate all available resources to bring disseminators of such falsehoods to justice,” said William J. Maddalena, acting special agent in charge of the FBI’s Miami office

    As part of the plan, Minkow authored “false and misleading statements” about Lennar, creating news releases, emails and YouTube videos to allege “widespread improprieties in Lennar’s financial reporting and business structure,” prosecutors said.

    The false reports artificially depressed Lennar’s stock price, prosecutors said.

    Minkow, according to prosecutors, contacted the FBI, the SEC and the IRS in January 2009 with allegations of Lennar’s purported fraud. His acts induced the government to open an investigation.

    On March 13, 2009, Minkow contacted the FBI and IRS, confirming to agents that he knew he was “precluded . . . from shorting Lennar stock,” according to the federal complaint, which was filed in the form of an information.

    Three days later,  Minkow “misappropriated material nonpublic information” about Lennar and used it to purchase Lennar options through a nominee trading account, prosecutors said.