Conspiracy to commit bank fraud, wire fraud, mail fraud and to defraud the United States Conviction: Pleaded guilty on March 30 Pleaded guilty on January 22 Conviction Penalty: Released in
It's the stuff of fairy tales, but for one man, it was the beginning of an odyssey that would lead to prison, redemption, and a new life as a sort of accounting super-hero. Over the next several years, he franchised Barry minkow s fraudulent activities chain and took it public.
And at 22, he was convicted of 57 counts of fraud and headed to federal prison where he spent nearly seven and a half years. Minkow's harrowing tale is hardly an isolated case.
Each year, the total amount lost to con games and financial fraud is simply staggering. And employers are among the biggest losers. The Federal Trade Commission estimates that more than one in 10 Americans lose money in financial scams each year.
Most victims are between the ages of 25 and 44, with baby boomers running a close second. Astoundingly, those with higher incomes and financial education are actually more likely to fall for investment scams, according to the National Association of Securities Dealers.
Minkow's case was a textbook example of what forensic accountants refer to as the fraud triangle -- pressure, opportunity, and rationalization.
Pressure typically comes in the form of financial hardship, including lack of operating funds, unrealistic performance goals, and untenable lifestyles on the part of company executives. And Minow's case certainly fit the bill.
The second ingredient, opportunity, typically stems from lack of financial supervision. When ZZZZ Best's cash reserves were running out, Minkow borrowed money from mob-affiliated loan sharks and cooked the books to create the appearance that the money was coming from insurance contracts on damaged buildings.
When independent auditors asked to see one of the buildings under repair, Minkow bribed a security guard at an unrelated facility, and guided auditors on a tour of the building he claimed was under repair. In total, investigators estimate that Minkow and his associates forged more than 22, documents to prop up his failing company.
And finally, there's rationalization. Minkow was sentenced to federal prison and emerged a changed man. Following his release, he embarked on a personal crusade to fight financial fraud.
He founded the Fraud Discovery Institute with the mission of educating students, law enforcement agents and executives on financial crime. And he became a sort of Clark Kent of accounting, running his company by day and investigating con artists by night.
Working on personal tips, he's helped unveil 11 suspected scams, the largest of which was Financial Advisory Consultants. According to Lorraine Horton, owner of L. These are the individuals, he says, that will likely yield the needed information.
As for Minkow, he's done enough to vindicate his past life. So much so that Judge Dikran Tevrizian released Minkow from the terms of his probation.Barry Minkow was a fraud as an entrepreneurial, he managed to fool his auditors and the liquidation report that he had done back then in his company as well as the media.
His artistry in fraud had made him go to jail for at least five years, and finally was released. When ZZZZ Best con man-turned-scam fighter Barry Minkow agreed to plead guilty to a new federal fraud charge, he quit as head minister of San Diego’s Community Bible Church.
Feb 25, · Barry Minkow - The Kid Who Swindled Wall Street.
By Daniel Akst. pp. New York: Charles Scribner's Sons. $ The true tale of Barry Minkow, the .
Barry Jay Minkow (born March 22, )  is a former American 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.
arteensevilla.com Opportunities in smallcaps. Home; Background Material. Forums; Free capital flows not always the best; NQ Mobile is oversold. Securities fraud is a type of serious white-collar crime that can be committed in a variety of forms, but primarily involves misrepresenting information investors use to make decisions.