As expected former conman turned pastor turned corporate whistle-blower Barry Minkow has pleaded guilty to commit securities fraud. He was accused of purposefully trying to harm the business of Lennar, a home builder that is one of the largest companies head-quartered in Miami-Dade, by reporting that were operating "like a Ponzi scheme." Minkow has agreed to help federal investigators, but still could face five years in prison.
The report from Minkow's supposed whistle-blowing "Fraud Discovery Institute" caused Lennar's stock to crash by twenty percent in one day. Minkow was apparently hired to release the report by another development company. Minkow is now required to assist in the investigation of the company.
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"We appreciate the good work of the Justice Department in protecting our public securities markets," said Stuart Miller of Lennar Corp. in a statement. "Many innocent people were hurt as a result of the criminal activity by Mr. Minkow and his conspirators, as detailed in the factual statement. We will continue to cooperate with the authorities in their ongoing investigation.''
Minkow's attorneys claim that he believed the allegations to be true when he reported them.
"My client was deluded and taken advantage of; that he acted recklessly, we don't dispute at all," said his lawyer, Alvin Entin, at the plea hearing.