Barry Minkow, Ex-Ponzi Schemer and Minister, To Plead Guilty To Insider Trading
Barry Minkow's life could have been an American archetype: A seemingly successful young entrepreneur goes to prison for in fact running a Ponzi scheme, and then finds Jesus and dedicates his life to helping the feds sniff out other frauds.
But like any good crook, Minkow just couldn't keep his hands out of the cookie jar. Now Minkow is set to plead guilty in Miami's federal courthouse to insider trading against local homebuilders Lennar Corp.
Minkow's incredible story is well told in a feature story in our sister paper, LA Weekly, from October.
When he was still in high school, Minkow founded a carpet cleaning business called ZZZZ Best. He was hailed by everyone from local papers to the Oprah Winfrey Show for building millions in revenues -- at least until 1987, when the fraud collapsed and investors realized the whole firm was a front for a Ponzi scheme.
Minkow spent seven years in federal prison. When he was released, he claimed to be a changed man and soon landed at an evangelical church in California.
Soon Minkow had crafted a new image for himself -- the minister and ex-fraudster helping the feds catch bad guys. 60 Minutes did a segment on him. Fox News loved him.
But that wasn't enough, apparently. As LA Weekly lays out, Minkow started scheming to cash in on stock in the same companies he was trashing in stories as frauds.
That's exactly the charge that brought him to federal court in Miami. In 2009, he wrote a rambling report on Lennar accusing them of being a "financial crime in progress," and dozens of national media picked up on his claims. Lennar's stock plunged more than 20 percent almost overnight.
The problem: Around the same time, the Wall Street Journal reports, Minkow bought $20,000 in Lennar stock, betting his report would kill its value.
Alvin Entin, Minkow's Fort Lauderdale-based attorney, now says Minkow will plead guilty to the insider trading clause. He faces another five years in prison.
We can't wait to see who he'll claim to be when he gets out.
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