In the offices of Community Bible Church, pastor Barry Minkow leans over the phone talking to an executive who is trying to raise money for a Christian company. Minkow, after admitting he spent seven years in prison, uses his standard line when he has a hunch that a company's investment deal is a fraud. "We've got $2 million in our church building fund we're looking to invest." (His church actually does, though Minkow can't sign checks.) "You're a Christian company. We're a church. I see a fit."
"Now is really the time to buy," the man on the phone says, encouraged by Minkow's $2 million. Minkow frowns. A minute earlier the executive said he wasn't allowed to solicit funds. Hanging up the phone, Minkow shakes his head. "I don't like that at all."
Minkow smells a fraud. Sixteen years ago, as the famed Wall Street Whiz Kid, Minkow and his company, ZZZZ Best Carpet and Furniture Cleaning Company, swindled the investment community out of $26 million, going from boom to bust by the time he was 20. Minkow's firm was in fact a Ponzi scheme in which money from investors was used fraudulently to pay off a handful of early investors, creating the false impression of high returns. Such investment pyramids eventually collapse, causing most people to lose money. At age 21, Minkow was sentenced to 25 years in prison and ordered to pay back $26 million (which was dismissed by his judge in 2002).
In prison, Minkow earned undergrad and graduate degrees from Liberty University. He now pastors a growing church of 1,200 in San Diego. To atone for his past, Minkow gives seminars to fraud investigators for the FBI. Insurance companies invite Minkow to speak to executives to demonstrate the consequences of white-collar crime. Minkow pulls out his ...1
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