Jury Convicts Minkow in ZZZZ Best Case
LOS ANGELES (AP) _ Barry Minkow, who once convinced Wall Street and talk show hosts that he was a teen-age business genius, was convicted Wednesday on all counts in the ZZZZ Best carpet-cleaning securities fraud case.
The 22-year-old Minkow, who was just 16 when he started his business, was convicted on 57 federal counts of swindling investors in a phony restoration business. He had contended he was the terrified puppet of mobsters, but the jury believed prosecutors who said he was a canny youthful con man.
Minkow was calm as the word ″guilty″ was pronounced in the courtroom 57 times. Once during the 40-minute reading of the verdict, he reached over and clutched the hand of his attorney, David Kenner.
The panelists came to their decision shortly after they concluded hearing a reading of the testimony of Minkow’s co-defendant, Norman Rothberg, an accountant who was charged with taking a bribe to cover up the ZZZZ Best frauds.
The jurors, who have been deliberating for five days, said they had not yet reached a verdict on charges against Minkow’s co-defendant, accountant Norman Rothberg. After telling the judge they were too emotionally drained to continue discussions Wednesday, they recessed for the day and were to resume deliberations on Rothberg on Thursday.
The Minkow case was among the most bizarre developments to rock the volatile money markets in recent years. The ZZZZ Best carpet cleaning company had been one of the hottest items on Wall Street before scandal erupted and the business collapsed.
Large banks and brokerages lost millions along with small investors, and it became clear that Minkow, once hailed as a business ″whiz kid,″ was not the boy wonder he seemed.
True, he was only 16 when he started a carpet cleaning business in his parents’ garage in the San Fernando Valley. But he admitted during the four- month trial that his claim that ZZZZ Best made a fortune on restoring fire and water damaged buildings was a lie.
″He sold investors on a business that for the most part did not exist,″ Assistant U.S. Attorney James Asperger told jurors in opening statements.
He said Minkow’s manipulations cost investors more than $25 million while the young entrepreneur lived in a $1 million house and drove a red Ferrari.
Sentencing for Minkow was set for Feb. 21, and Kenner said he hoped U.S. District Judge Dickran Tevrizian would be lenient. Theoretically, Minkow could draw up to 300 years in prison.
″Barry is a young man,″ Kenner said. ″He never said he didn’t do anything wrong. ... I would hope Barry will still be a young man when he is released.″
Kenner also confirmed that defense and prosecution lawyers had been nearing a possible plea bargain agreement at the time the jurors announced they had reached a verdict.
The prosecutors would say only that they were pleased with the verdict but would comment no further until Rothberg’s section of the case was resolved.
Minkow, who had captivated the press and public with the story of his youthful success, openly admitted that he had defrauded investors out of millions. But he insisted it wasn’t his fault.
″I was just a front man for the mob,″ he told jurors as part of his risky defense of duress. He claimed that Mafia figures, stock manipulators and thugs infiltrated his business, threatened him with death and orchestrated the huge ZZZZ Best fraud.
He named the late reputed mobster Jack Catain as a key figure in his intimidation and said others, including a loan shark named Dan Krowpman, used death threats to win his cooperation.
″I didn’t resist anymore,″ he said. ″I was just a puppet. ... I was out of objecting strength. It was over. I just did as I was told.″
But the prosecution portrayed Minkow as a shrewd con man who defrauded others to satisfy his thirst for fame and fortune.
″Power, prestige and money are the three things most important to Barry Minkow,″ said Assistant U.S. Attorney Gordon Greenberg.
He called Minkow ″a pathological liar″ and said, ″This defense of duress just doesn’t fly.″
Ten of Minkow’s former associates, including Krowpman, have pleaded guilty to various charges stemming from the ZZZZ Best frauds.