His many lives: entrepreneur, fraud fighter, pastor, movie actor - and serial swindler.
In 2009 a writer named Jon Meyers was hired to furnish a screenplay for what soon became the strangest movie project of his life. The film was to star a number of well-known actors -- James Caan, Talia Shire, Mark Hamill, Ving Rhames -- and it would chronicle the life of Barry Minkow.
Minkow (rhymes with Kinko) was the boy-wonder business phenom of the 1980s. In 1982, at age 16, he started ZZZZ Best, a carpet-cleaning company, from his parents' garage in Reseda, Calif., in the San Fernando Valley. The business expanded rapidly and went public in 1986, making Minkow, at age 20, worth more than $100 million on paper. But it was a giant Ponzi scheme and collapsed in May 1987. Minkow was convicted of 57 federal felonies, sentenced to 25 years, and ordered to pay $26 million in restitution.
Though raised as a Jew, Minkow then became an evangelical Christian. In prison he also began giving seminars and shooting videos designed to help detectives and accountants catch fraudsters of the type he had been. Paroled in 1995, he became the pastor of a San Diego church, where membership would more than quintuple under his charismatic leadership. In 2001 he founded the Fraud Discovery Institute (FDI), which assisted the Federal Bureau of Investigation, the Securities and Exchange Commission, and others in shutting down at least 20 serious Ponzi schemes, including one that had swept up $500 million in investor money, and another whose ringleader was sentenced to 30 years.
Asked to write a script based on this material, screenwriter Meyers jumped at the chance. But he soon encountered dismaying surprises. To begin with, Minkow was insisting on playing himself. Though Minkow still had the bodybuilder's physique he had acquired through weightlifting and steroid abuse as a teenager, he had never been blessed with a screen idol's good looks. And how could he, then 43, play himself in his early twenties? Furthermore, wouldn't it be thematically undermining for someone to star in a movie about his own redemption from narcissistic criminal to humble servant of Jesus?
Then things got stranger. Rather than receiving paychecks from a production company, Meyers and others working on the film got paid in irregular dribs and drabs over PayPal, with sums that came from Minkow, Minkow's wife, or two companies Meyers had never heard of before, including a trucking company. Sometimes Minkow just gave people $100 bills he peeled off a wad he kept in his pocket.
Finally, one day in September 2009, recounts Meyers, he was in the production booth with headphones on when Minkow and James Caan were schmoozing between takes. Perhaps forgetting about the open mike in his lapel, Minkow leaned over to Caan and whispered, "I financed this movie by clipping companies," Minkow said.
"Clipping," of course, is a slang word for "swindling." Minkow says the incident "never happened." "Not ever," he wrote Fortune in an e-mail in September. "And have him produce the tape."
The film's director, Bruce Caulk, did produce the tape. Scene 71, take 1. Minkow said it.
The movie has since been completed, but it now needs a new ending. That's because in March, Minkow pleaded guilty to conspiring to manipulate the stock of a then-Fortune 500 company, Miami-based homebuilder Lennar Corp. (LEN), which he caused to tank 26% in one day by making false accusations about it and its top executives. He did this, according to his plea agreement, to make money by short-selling (i.e., betting on Lennar's stock price to fall) and to assist a paying client who was attempting to extort money from Lennar that the client claimed to be owed.
In September, Minkow returned to federal prison, where he is beginning a five-year term and facing a new restitution order for $583 million -- the amount Lennar stockholders lost due to manipulation. Meanwhile, a church audit committee has been sifting through its records, where it is now clear that Minkow commingled personal and church funds for years. The movie's main backer, a former congregant, has sued Minkow for the return of more than $4.3 million he sank into the film and other Minkow ventures, alleging that Minkow raided the funds for personal purposes. Another church member -- a retired grandmother with health issues -- says Minkow left her with about $300,000 in unpaid loans; a third says Minkow forged his name on a $100,000 loan guarantee; a fourth alleges that Minkow opened credit cards in his name without his knowledge; a business associate says he is owed $47,000 for supplies; and another says the state's coming after him for $50,000 in taxes that he claims are Minkow's responsibility.
Minkow, meanwhile, is planning his next comeback....MORE
