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Minkow needed another infusion of cash, and thought he had it when he heard that KeyServ, the authorized carpet cleaner for Sears, was being sold by its British parent.
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Minkow and another
Minkow had blamed the fraudulent charges on unscrupulous contractors and another employee, and paid back most of the victims.
Minkow and cash
According to the agreement, Marsch offered to have Minkow retract his report if Lennar paid him in cash and stock.
Minkow and had
Even as the process of merging with KeyServ got underway, Minkow had ambitions of becoming more powerful.
The woman tracked down several other people who had been defrauded by Minkow and gave a diary of her findings to the Los Angeles Times.
The Times then wrote a story revealing that Minkow had run up $ 72, 000 in fraudulent credit card charges in 1984 and 1985.
The day after this press release, Ernst & Whinney discovered that Minkow had written several checks to support the validity of the nonexistent contracts.
Minkow denied knowing the man, but shortly after the checks were discovered, Ernst & Whinney discovered that Minkow had cut two checks to him for an unrelated matter.
According to the San Diego Union-Tribune, Minkow had engaged in this practice as early as 2006.
Minkow issued the report after being contacted by Nicholas Marsch, a San Diego developer who had filed two lawsuits against Lennar for fraud.
According to court records, Minkow had shorted Lennar stock, buying $ 20, 000 worth of options in a bet that the stock would fall.
Freeman found that Minkow had repeatedly lied under oath, destroyed or withheld evidence, concealed witnesses, and deliberately tried to " cover up his misconduct.
" According to Freeman, Minkow had even lied to his own lawyers about his behavior.
Freeman determined that Minkow had perpetuated " a fraud on the court " that was so egregious that letting the case go any further would be a disservice to justice.
According to his lawyer, Minkow had bought his Lennar options using " nonpublic information.
The complaint also revealed that Minkow had sent his allegations to the FBI, SEC and IRS, and that the three agencies found his claims credible enough to open a formal criminal investigation into Lennar's practices.
Minkow faced a minimum of 30 years in prison had the case gone to trial.
Freeman's ruling stated that Minkow and Marsch had entered into a conspiracy to wreck Lennar's stock in November 2008.
In imposing the sentence, Seitz said that Minkow had " no moral compass that says ' Stop.
Seitz had recommended that Minkow serve his sentence at Federal Prison Camp, Montgomery in Montgomery, Alabama.
Almost a month later, on July 6, it emerged that officials with Community Bible Church had accused Minkow of running the Fraud Discovery Institute with church funds, applying for credit cards in the names of church members and leading his flock into bad investments.
Minkow and when
Minkow first gained national attention when 60 Minutes aired a profile of him in August 2006.
From January 9 ( when Minkow first made his accusations ) to January 22, Lennar's stock tumbled from $ 11. 57 a share to only $ 6. 55.
Minkow initially denied doing this, only to be forced to recant when confronted with trading records.
The nature of the " nonpublic information " became clear a week later, when federal prosecutors in Miami filed a criminal information charging Minkow with one count of conspiracy to commit securities fraud.
Minkow and KeyServ
To calm nervous investors, Minkow issued a press release touting record profits and revenues, but did so without notifying Ernst & Whinney ( now part of Ernst & Young ), the firm responsible for auditing the company prior to the KeyServ deal.
Minkow and carpet
Minkow launched a massive television advertising campaign portraying ZZZZ Best as a carpet cleaner that Southern Californians could trust.
Minkow and for
With the help of Tom Padgett, an insurance claims adjuster, Minkow forged numerous documents claiming that ZZZZ Best was involved in numerous restoration projects for Padgett's company.
Minkow raised money by factoring his accounts receivable for work under contract, as well as floating funds through several banks in an elaborate check kiting scheme.
Catain later sued Minkow for not paying him his share of ZZZZ Best's profits, but Minkow claimed Catain was a usurer.
When accountants wanted to inspect ZZZZ Best's operations, Minkow borrowed fake offices for a tour of " Interstate Appraisal Services " and used an incomplete building to present a fake restoration job.
On July 2, Minkow abruptly resigned for " health reasons.
Many companies have sued Minkow for making false accusations against them.
She ordered Minkow to reimburse Lennar for the legal expenses it incurred while ferreting out his lies.
Minkow opted to plead guilty to the conspiracy charge rather than face charges of securities fraud and market manipulation, which could have sent him to prison for life.
This could be a potentially ruinous amount for Minkow, on top of the money he still owes the ZZZZ Best victims and Union Bank.
One woman said Minkow asked her for $ 300, 000, purportedly to help finance a movie about his redemption.
The Fraud Discovery Institute was founded by Barry Minkow, who served seven years in jail for stock fraud, and since disclosed that his company was profiting from the allegations by shorting Herbalife stock.
in 2011, Minkow started serving a 5 year federal prison sentence for securities fraud after pleading guilty to one count of conspiring to damage Lennar Corp. by attacking the Miami-based home builder in reports he acknowledged were filled with falsehoods ..
Minkow and was
Minkow was able to devote his entire time to ZZZZ Best after graduating in 1985.
Minkow was also a business partner with Robert Viggiano, a convicted jewel thief and reputed loanshark.
In order to obtain more financing, Minkow was persuaded to raise $ 15 million of capital through an initial public offering of ZZZZ Best stock.
When the Feshbach brothers, a pair of short-sellers, learned that Minkow still stood behind Arrington, they did further investigating and discovered ZZZZ Best's claimed $ 7 million contract to clean carpets in Sacramento was likely a fraud.
While Minkow admitted to manipulating ZZZZ Best's stock, he claimed that he was forced to turn the company into a Ponzi scheme under pressure from the organized-crime figures who secretly controlled his company ( a story he later admitted was false ).
Suspecting something was amiss, Minkow alerted federal authorities, who discovered the firm was a $ 300 million pyramid scheme.
Minkow's recent motives have been brought into question by multiple news stories concluding that Minkow was shorting stock before he releases a report on a public company.
Minkow also forged documents alleging misconduct on Lennar's part, and lied about having to go to the emergency room on the night before he was first scheduled to testify.
In an unrelated development, it was also revealed that Minkow operated the FDI out of the offices of his church and even used church money to fund it — something which could potentially jeopardize his church's tax-exempt status.
On March 16, 2011, Minkow announced through his attorney that he was pleading guilty to one count of insider trading.
" The plea, which is separate from the civil suit, came a month after Minkow learned he was the subject of a criminal investigation.
Minkow claimed not to know at the time that he was breaking the law.
On the same day, Minkow resigned as senior pastor of Community Bible Church, saying in a letter to his flock that since he was no longer " above reproach ," he felt that he was " no longer qualified to be a pastor.
Minkow then used confidential knowledge of that investigation to short Lennar stock, even though he knew he was barred from doing so.
The suit was filed by lawyer Christopher Grell, cofounder of the Dietary Supplement Safety Committee and an associate of Barry Minkow.
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