Printable Biography of Barry Minkow

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Minkow learned his business manners in his mother's job as a telemarketer. At the age of 15 he started his own carpet cleaning company, ZZZZ Best, in his parent's garage in Roseda, California. In four years it had 1400 employees and it begun to specialize in insurance restoration business. Minkow worked hard to form dozens of business contacts. His most important contact was Tom Padgett of Interstate Appraisal Services, an insurance claims adjuster who could get large restoration contracts. He was presented as a business success story in magazines and TV shows. Mayor of Los Angeles Tom Bradley declared a Barry Minkow Day. He lectured in business schools and contributed to Narcanon. He had a Ferrari Testarossa and a mansion in Woodland Hills. ZZZZ Best' stocks in Wall Street raised to $18 a share, for a total of more than $280 million. However, behind the scenes, his company was little else than a front to attract investment for a pyramid scheme. ZZZZ Best did not clean any carpets but generated a plausible paper trail to fool potential investors. Interstate Appraisal Services was formed to support this fraud. Minkow raised money by factoring his accounts receivable for work under contract. One of his first funds he had got from Genovese Mafia family. He hired reputable accountants and lawyers to boost his image. Later he claimed that he had intended to form a legitimate business empire and pay back everything, nobody being the wiser. He hoped to attract public stock offering that he would not have to pay back. ZZZZ Best went public in stock market in 1986. When accountants wanted to inspect ZZZZ Best's handiwork, he borrowed fake offices for a tour of Interstate Appraisal Services and used an incomplete building to present a fake restoration job. He used $2 million to complete the building in twenty days. He almost got away with it. Magazines and TV shows did not check his background Investigations of the Securities and Exchange Commission, the FBI and various individual investigators found nothing. Two separate accounting firms did not notice anything. ZZZZ Best was going to buy a rival carpet cleaning company KeyServe. But when ZZZZ Best's stock suddenly plunged due to unfavorable press reporting and FBI investigated Minkow's link to Genovese, he gave up in 1987. Court's approximation of the extent of fraud was $26 million.