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Transcript of ZZZZ Best
At the age of 9, Minkow got a job as a telemarketer with the carpet-cleaning business.
At the age of 16, Minkow started ZZZZ Best in his parents’ garage with three employees and four phones.
Minkow struggled to meet basic expenses
Two banks closed his business account
Demands for payment from suppliers At the age of 20, Minkow was a CEO of a 300 million dollar company that cleaned carpets and furniture, ZZZZ Best Company Inc. Fraud Blossomed From age 16 to 18, Minkow was becoming a money-raising machine.
60 Minutes Interview
Barry Minkow Former Businessman, Pastor & Convicted felon Who is this? There was no need to tie his future to the cutthroat carpet cleaning industry. Insurance restoration, rather than carpet cleaning, became the major source of revenue appearing on the ZZZZ Best income statements. FRAUD BLOSSOMED There was no need to tie his future to the cutthroat carpet cleaning industry. Insurance restoration, rather than carpet cleaning, became the major source of revenue appearing on the ZZZZ Best income statements.
Minkow’s "the sky is the limit" philosophy drove him to be even more innovative.
Auditor Change Changing from Greenspan to Ernst & Whinney accounting firm.
GREENSPAN ERNST & WHINNEY ...in order to obtain a Big Eight accounting firm to enhance the credibility of the company’s financial statements. What information was provided from Greenspan to Ernst & Whinney regarding his former client? Bogus Insurance Restoration Contracts Contracts that accounted for 90 percent of ZZZZ Best’s reported profits.
To convince Ernst & Whinney that the insurance restoration contracts were authentic, Minkow and his associates devised a series of sting operations. Bogus Insurance Restoration Building
Minkow’s two associates convinced the supervisor of the construction site to provide the keys to the building.
Placards on the walls at conspicuous locations indicating that ZZZZ Best was the contractor for the building renovation.
Paid the building’s security officer to greet the visitors.
The Fall of ZZZZ Best It's not IF you get caught, it's WHEN! It's not IF you get caught... it's WHEN! Conviction and Prison! A widowmaker who had been bilked out of a few hundred dollars ended it all for Barry Minkow Customer Allegations or maybe he paid someone off? Minkow and eleven other ZZZZ Best insiders were indicted by a LA federal grand jury in Jan 1988 on 54 counts of racketeering, securities fraud, embezzlement, mail fraud, tax evasion, and bank fraud
Estimate cost to investors and creditors: $100 million
Minkow was sentence to 25 years in prison He only served just under 7 1/2 years due to good behavior. racketeering... securities fraud... money laundering... embezzlement... mail fraud... tax evasion... bank fraud... etc... FBI Subcontractor Started Fraud Discovery Institute to help reveal frauds.
Helped Federal Agencies bring down Fraudulent companies by going undercover. A Teacher and A Preacher Became a Preacher While in Prison Taught at Schools & Fraud Seminars Minkow the Movie Executive producer and played himself in the movie
Movie may be delayed... ZZZZ Best Commercial Lessons to be Learned from Minkow Ponzi Scheme... = ...is illegal! QUESTIONS? WHOHOO! Be cautious! A tiger doesn't change it's strips.