A 22-year-old entrepreneur has admitted guilt in a sweeping investment scam that inflated the value of his carpet-cleaning business to hundreds of millions of dollars as of December 14, 1988.
Without even being old enough to drive, he relied on friends to chauffeur him to clients’ homes to perform carpet cleaning services.
Through a web of deceit, he manipulated the company’s image, making it seem vastly more successful than reality would suggest.
By the age of 20, he had taken his business, ZZZZ Best, public.
Investors, misled into believing ZZZZ Best was a thriving enterprise, watched as its public listing turned him into a millionaire overnight.
The following year, the carpet-cleaning business was appraised at an astonishing US$280 million, equivalent to A$1.2 billion today.
As the primary shareholder, Minkow was worth hundreds of millions of dollars.
His success as America’s youngest CEO saw him appear on The Oprah Winfrey Show.
All the while, ZZZZ Best had major cash flow issues.
A merger with another company KeyServ, would have put many more clients into their business and resolved their financial problems.
But he was brought undone by a woman he had ripped off.
The woman had been overcharged by several hundred dollars. Angered by the difficulties she was facing in getting her money back, she began gathering the stories of other people ripped off by the company.
She went to the Los Angeles Times with her story. The newspaper published an expose just as the merger was about to take place.
Alarmed by the company’s apparently precarious situation, bankers and investors tried to get their debts paid and their money back.
Minkow was charged with 54 counts including racketeering, fraud, embezzlement, tax evasion and bank fraud. He was sentenced to 25 years in prison.
Released early in 1995, he became a pastor and started a fraud investigative firm.
But his shiny new image was every bit as fraudulent as his teenage CEO image.
He ripped off hundreds of thousands of dollars from his parishioners, convincing them they were donating to charities.
Minkow was using the ill-gotten gains to fund a movie about his life, that he insisted on starring in.
“Barry Minkow is among the worst kind of predators,” US Attorney Laura Duffy said in 2014.
“He gained the affection and trust of his victims from the pulpit and then stole not only their money, but their faith in humanity, the clergy, the church, and themselves.”
He was sentenced to a further five years in jail and released in 2019.
The film about his life, entitled Con Man, was released in 2018 and received dreadful reviews.
