ZZZZ Best Bamboozler Now Preaches Anti-Fraud Gospel
LOS ANGELES (AP) _ Robert Barker reacted predictably when his daughter went sweet on Barry Minkow, the former carpet-cleaning boy wonder whose ZZZZ Best was one of the 1980s’ most celebrated swindles.
``I got a bruised forehead out of it, from bouncing off the ceiling,″ the Phoenix businessman recalls. ``Don’t even mention his name around me!″ he told daughter Teresa, 22, when she asked to visit Minkow at federal prison.
But she was adamant. And Minkow, now an evangelist who says he wants to repay victims $26 million, is singularly persuasive.
How many other 20-year-olds from modest San Fernando Valley backgrounds could have conned talk shows, Wall Street and top accountants into believing ZZZZ Best _ built on lies, embezzling, check kiting and mob money _ was worth $240 million?
Freed last December from Lompoc, Calif., federal prison after 87 months behind bars _ more than financial felons Michael Milken, Ivan Boesky and Leona Helmsley combined _ he holds himself up as a lesson in how small compromises spiral into webs of deceit.
Believers include Barker, some victims and his former prosecutor.
``It takes a strong person to sit and look right at you and not turn his head away when you ask the kind of questions an angry father can ask,″ says Barker, who wound up blessing his daughter’s marriage to Minkow.
``He is a man I have come to respect.″
Minkow, 29 and out of a halfway house since April, is one of the busier ex-cons. He’s billed as the star speaker Thursday at a bank fraud seminar sponsored by the FBI’s Los Angeles office. Four hundred financial executives are expected to attend. Minkow will not be paid.
In conversation, he pours out persuading floods of words, locks eyes, offers a reassuring knee pat. Minkow, who once demanded his parents call him ``mister,″ seems to reveal the effects of prison by saying ``sir″ when answering tough questions.
He says how-to-succeed books teach people the small ethical compromises that fester into corruption.
``I didn’t start out to cheat anyone. I told myself that all I was doing was making my payroll.″
Starting at age 16 in his parents’ garage with his mother as his first employee, Minkow aimed to become the General Motors of carpet cleaning. He was about to buy Sears’ national business when his scams collapsed.
In 1988, he was convicted of 57 counts of defrauding investors and banks in a classic Ponzi scheme, using money from new investors to pay old debts. His biggest scam was persuading everyone he made millions of dollars restoring fire- and water-damaged businesses. There were no such jobs.
Minkow now earns some money running errands for the lawyer who represented him and meets Christian groups while establishing his new business: giving ``Fraudo Dynamics″ seminars and marketing videotapes nationwide to help accountants and corporate directors spot scams.
Earnings go to a trust fund audited by an arm of the big accounting firm Coopers & Lybrand that, you can bet, will be on guard this time.
Minkow and his bride will get enough to live on, with the rest going to his victims. Details have yet to be arranged. But probation officers say Minkow, who once drove a red Ferrari with ZZZZBST plates and owned a $700,000 home, won’t be buying new cars or a house any time soon.
All the profits from a book written over three years in prison, ``Clean Sweep,″ already are going toward his $26 million restitution order.
``Dear Jim,″ wrote Minkow in a copy of the book for James Asperger, former head of federal fraud prosecutions in Los Angeles who won Minkow’s conviction. ``Thanks for pointing me in the right direction.″
He says his goal is becoming a full-time preacher after repaying victims over three to five years. He says he has controlled the ego and craving for attention that once led him to crime and to nearly kill himself by taking steroids to pump up his body. He’s glad he won’t be tempted by touching his earnings himself, he adds.
Not everyone is convinced.
U.S. District Judge Dickran Tevrizian, who accused Minkow of spreading ``toro poo-poo″ when he described his remorse at his 1989 sentencing hearing, laughs at how Asperger and Barker now support him.
``Jim is soft,″ the judge says of the former prosecutor. ``I’ve been doing this too long to expect any change. (Minkow) doesn’t know right from wrong _ he’s an alchemist.″
Whatever the motivation, the anti-fraud presentations have been a hit with such experts as the Association of Certified Fraud Examiners. Fans include top Arthur Andersen accountant Paul Sachs, hired by bankrupt Orange County to help salvage its $1.7 billion loss.
Sachs said Minkow is impressive because ``he knew what the auditors wanted and he made sure they got what they wanted.″
Minkow, who earned three correspondence degrees from Jerry Falwell’s Liberty University while imprisoned, sent a video of himself with the televangelist to Tevrizian and asked to meet with him. The judge declined.
``He wants to get back on the talk programs,″ Tevrizian says. ``He’ll be on Geraldo and Oprah and Donahue and the rest of them because he can’t get that out of his system.″