Accounting

Barry Jay Minkow (born March 17, 1967) is a former businessman, pastor and convicted felon. While still in high school, he founded ZZZZ Best (pronounced Zee Best), which appeared to be an immensely successful carpet-cleaning and restoration company. However, it was actually a front to attract investment for a massive Ponzi scheme. It collapsed in 1987, costing investors and lenders $100 million—one of the largest investment frauds ever perpetrated by a single person, as well as one of the largest accounting frauds in history. The scheme is often used as a case study of accounting fraud.

After being released from jail, Minkow became a preacher and a fraud investigator, and spoke at schools about ethics. This all came to an end in 2011, when he admitted to helping deliberately drive down the stock price of homebuilder Lennar and was ordered back to prison.

Contents

• 1 Beginnings of ZZZZ Best

• 2 Going public

• 3 Downfall

• 4 Conviction and prison

• 5 Release and short selling

• 6 Lennar

• 7 Former church members speak out

• 8 References

• 9 Further reading

• 10 External links

Beginnings of ZZZZ Best

Minkow grew up in a Jewish family in Reseda in the San Fernando Valley. When he was nine years old, his mother got him a job as a telemarketer with the carpet-cleaning business where she worked. At the age of 15—while a sophomore at Cleveland High School, Minkow started ZZZZ Best in his parents' garage with three employees and four phones. In the early years, he had to rely on friends to drive him to jobs since he didn't have a driver's license.[1]

At first, Minkow struggled to meet basic expenses. Two banks closed his business account because California law didn't allow minors to sign binding contracts, including checks. He was also plagued by customer complaints and demands for payment from suppliers. At times, he found it difficult even to meet payroll. Faced with a shortage of operating capital, he financed his business...