Scott Patterson, CFE
ACFE Senior Media Specialist
Barry Minkow has been sentenced to prison for five years for committing fraud. Again. The former entrepreneurial whiz kid is no stranger to running afoul of the law, using financial trickery to make money under false pretenses. He did it during his reign as a teenage business owner with ZZZZ Best Carpet Cleaning in Southern California. Years later, after being “reformed” in prison, Minkow fell again when he lied about Lennar Corp. in investigative reports he produced through his Fraud Discovery Institute. His latest conviction, however, is not related to those noteworthy cases.
This time, it’s different.
This time, the victims of Minkow’s schemes welcomed him into their homes, into their family circles. They trusted Minkow with more than just money – they prayed and worshiped with him, following him as members of San Diego Community Bible Church. Minkow served as the church’s head pastor, claiming to have found redemption while in prison and becoming a self-avowed man of God. Through his new vocation, he also found another way to ingratiate himself to people who would willingly give him money for all sorts of important causes, such as a nonexistent hospital in Africa.
When all was said and done, according to prosecutors, Minkow had enriched himself to the tune of $1.6 million. Read more about this discouraging story on ABC News, or in one of the many other news articles covering Minkow’s latest fall from grace.
Did I mention there is a movie in the works about him? The film is being created as a feature piece starring none other than Minkow (playing himself, naturally), along with other names from Hollywood including James Caan and Ving Rames. See the movie’s trailer – it appears to be a rather ambitious telling of Minkow’s story, and it will now need some major revisions, obviously. His latest conviction should see the tale take a winding, perhaps unexpected turn to reveal the falseness of Minkow’s redemption.
For some fraudsters, prison becomes a familiar place. In September 2012, The Fraud Examiner e-newsletter included a video feature “Hard Time for Fraud.” The video above showcases excerpts from interviews with several repeat offenders, Minkow among them (along with Kenneth Kemp, Steve Comisar and Barry Webne).
Minkow was interviewed in prison by ACFE founder and Chairman Dr. Joseph T. Wells, CFE, CPA, for “Cooking the Books: What Every Accountant Should Know About Fraud,” a video/workbook course published in 1991. At the time of the interview, Minkow was serving his first sentence for the ZZZZ Best scandal. In the video, Minkow explains that he had problems “being an egomaniac.” He discusses learning accountability in prison, and his plans for righting the wrongs he has committed “as long as I keep the ego out of it, can learn from my past mistakes, can be involved in helping future people (who) make my mistakes, and run perhaps some kind of entity where I could earn money legitimately, help society and pay back those people that I hurt…”
So much for that plan.