Barry Minkow

Does anyone know Barry Minkow? I am not sure anyone will remember him but I know his story very well. In fact when his story first came to light back in the 1980's I remember being drawn to it. Was I drawn to it because of what would happen almost 20 years later? Who knows but I remember him well. I was reading the local newspaper and his name was mentioned. I wondered what had happened to Barry Minkow so I looked him up on the internet. Before I go into his story I will say this story has nothing to do to with compulsive gambling it has to do with fraud.

At the age of 16 Mr. Minkow started a carpet cleaning business ZZZZ Best in his family's garage. By the age of 20 this carpet cleaning business was pulling down $240 million a year. The only problem was Barry wasn't happy with just cleaning carpets he wanted more. He swindled many "Wall Street" type investors out of a great deal of money. These people were highly educated and bought into Mr. Minkow's scheme to the tune of $26 million. At the age of 23 this scheme came to an end and he was sentenced to 25 years in federal prison along with a restitution amount of $26 million. Remember this is well before Enron, WorldCom and Arthur Andersen. At the time the sentence was the harshest handed down for such a crime.

Mr. Minkow served 7 years of his 25 year sentence and while he was in prison he earned his B.A. and Master of Arts degree in Church Ministries from Liberty University. He decided to turn his life over to Jesus. Mr. Minkow is now Senior Pastor Minkow at the Community Bible Church in San Diego, California. He gives seminars on fraud prevention and has helped both the FBI and Securities and Exchange Commission (SEC) on fraud cases. The article I read this morning was about Mr. Minkow and how he helped the SEC solve a ponzi scheme. In fact one of my old bosses in Las Vegas went to a seminar and Mr. Minkow was the guest speaker and he said his speech was fascinating.

Here is an excerpt from an interview with Barry Minkow he was talking about WorldCom, Enron, Arthur Andersen, Global Crossing, Xerox, Merck and any other business that had been perpetrated by fraud; I find this fascinating; "Everyone I met in prison had one thing in common - they never planned on being there," he says, talking loud and fast and expansively, still with a salesman's charm, using my name at every possible opportunity. "And not one of those companies went into business to defraud. Not one. Neither did I. What people don't realize is that fraud is always a means to an end, never an end in itself. There is always a rationalization: I'm going to do this now, and it's tough, but next week we're gonna get some big carpet-cleaning jobs, whatever, and we're gonna make it back, pay everyone back, nobody's gonna be hurt - and that will be the cure." You can insert the big gambling win for me where appropriate.

He now resides in San Diego with his wife and 1 year old twin adopted Guatemalan boys. His consulting firm has exposed an estimated $1 billion in fraud and he still has to pay back the $26 million in restitution to a bank. He know the $26 million is a life sentence but he has committed his life to a positive purpose. Most people thought Mr. Minkow was putting on front with his religious conviction and thought once he got out of prison he would resort to his old ways. He has been out of prison for 9 years and is the Senior Pastor for his congregation and gives speeches to CEO's and CFO's on how to suspect fraud. I would say he has turned his life around in a positive manner.