Can a conman ever be redeemed? Americans believed it of Barry Minkow, the 'boy wonder' jailed for 25 years in 1987 after ZZZZ Best the carpet-cleaning company he'd started as a teenager and floated on Wall Street was revealed to be a $300m Ponzi fraud.
In prison, Jewish-born Minkow converted, emerging (after a reduced term) as a born-again Christian fraud-buster, combining duties as a pastor with FBI work. For over a decade, Minkow was a media hero, "fighting crime and saving souls", says Forbes. Alas, this redemption tale was just the cover for another stupendous scam.
Minkow has been sentenced to another seven-years for conspiring to manipulate the stock of the Fortune-500 house-builder Lennar Corp, whose shares tanked 26% in one day after he falsely accused executives of fraud, enabling him to profit by shorting the shares.
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Prosecutors claim Lennar was one of several firms targeted by Minkow via his Fraud Discovery Institute, the accusations of which seemed credible because of its FBI connection. At the time, Minkow was a popular "poacher turned gamekeeper" speaker at the FBI Academy in Quantico, Virginia.
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Meanwhile, Minkow was also fleecing his flock at the San Diego Community Bible Church siphoning off church funds, stealing identities and tapping members for millions to finance a forthcoming film of his life (he planned to play himself).
Despite it all, Minkow was "beloved at the church". Even those who "got stung" testified to his kindness in helping congregants through crises, and the power of his sermons (see below). "From a Christian point of view, he was fabulous," says one.
Minkow started out from his parents' garage in Reseda, California. His first move, says LA Weekly, was to ring the local TV station, posing as a customer, to rave about a 16-year-old business prodigy who cleaned carpets between high-school classes.
Financed by loan sharks, he expanded partly by stealing jewellery from his grandmother, forging cheques, fabricating invoices, and staging insurance burglaries. In 1986, having hoodwinked a big eight' accounting firm and a Wall Street law firm into service, he became, at 20, "the youngest person ever to take a company public", pocketing $100m.
In 1987, after appearing on The Oprah Winfrey Show, the scam fell apart. Minkow promised hefty returns on
multi-million-dollar deals, but had none on his books. Investors were repaid with money from new investors. But that's history now for Minkow, who's planning his next comeback, says Fortune.
"The point is, I'm back," he says. "You know when I perform best? In custody. I work good under structure. It's freedom I struggle with. The Bureau of Prisons saved my life, and I hate to bother them again, but it looks like they're going to do it twice."
A philosopher of lies, a master theologian of fraud
Several judges have concluded that Minkow is "a remorseless liar and thief". But it's not that simple, says Roger Parloff in Fortune. The story of his life is "comic, tragic and psychologically perplexing". Blessed with intelligence, boundless energy, an ability to inspire others, and "an apparent desire to do good", his failing is "his inability to exercise these gifts responsibly".
Minkow's four autobiographies are rich with self-beration and mea culpas. He explains that, having initially "converted" in hopes of getting a lighter sentence, "God took my wrong motives and accepted me despite my manipulative personality". He inspired many in his flock as the optimum Christian:the sinner who repenteth.
Still,"the kid who swindled Wall Street" has never shaken off his "penchant for rococo lying". A master at devising shifting, inventive defences (he blames his latest transgressions on prescribed drug addiction), Minkow's crimes are far from victimless.
He's "a reverse billionaire", says Al Lewis on MarketWatch.com. "The felon-turned-pastor-turned-felon-again now owes more money than he ever dreamed of bagging in a Ponzi scheme." Lennar alone won a $584m judgement against him for defamation and interest is accruing.
The complicity of the American media is partly to blame, says Beth Barrett in LA Weekly. Lazy reporting and the love of a "colour" story propelled his rise. And when he re-emerged as Pastor Minkow, scourge of fraudsters, "they were all too eager" to focus on his redemption.
For journalists in his thrall, the truth is "maddening". Indeed so, says Colin Brandan on Barryminkow.blogspot.com. Surely even the most gullible aren't taken in by Minkow's "crocodile tears of repentance". We should see him for what he is: "a philosopher of lies, a master theologian of fraud too malevolent to be expected to reform in this lifetime".
