What was the ZZZZ Best scam?
What was the 'ZZZZ Best'. ZZZZ Best, founded by Barry Minkow, was a carpet-cleaning and restoration company that served as a front for a Ponzi scheme. The company went public in December 1986 and was quickly valued at over $300 million.
Was ZZZZ Best a Ponzi scheme?
ZZZZ Best was a carpet-cleaning company set up in 1982 by 16-year-old Barry Minkow, who would use it to run a Ponzi scheme that netted millions. ZZZZ Best was a carpet-cleaning company set up in Inglewood, California in 1982 by the then 16-year-old Barry Minkow, while he was still in school.
What does ZZZZZZ best mean?
ZZZZ Best (pronounced: zee best) was a carpet cleaning and restoration company that was created in Inglewood, California in 1982 by Barry Minkow. Minkow was sixteen and still at school when he founded the company.
Is ZZZZ Best a carpet cleaner?
Minkow launched a massive television advertising campaign portraying ZZZZ Best as a carpet cleaner that Southern Californians could trust. He owned a Ferrari and a BMW, and bought a mansion in the wealthy Valley community of Woodland Hills.
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Who audited ZZZZ Best?
ZZZZ Best Co., the Reseda carpet cleaning firm headed by 21-year-old entrepreneur Barry Minkow, said Wednesday that Ernst & Whinney has resigned as the company's independent auditor and will be succeeded by Price Waterhouse.
What happened to ZZZZ Best?
LOS ANGELES, DEC. 14 -- Barry Minkow, who once persuaded Wall Street and talk show hosts that he was a teen-age business genius, was convicted today on all counts in the ZZZZ Best carpet-cleaning securities fraud case.
What happened to Barry Minkow?
He was convicted of fraud in 1988 after his business was revealed to be the front for a Ponzi scheme that was connected to the mob. Minkow was sentenced to 25 years in federal prison and served almost eight.
When did Barry Minkow start ZZZZ Best?
1982ZZZZ Best was an industrial carpet cleaning company started in 1982 by a 16 year old American high school student named Barry Minkow.
How many employees did ZZZZ Best have?
Nevertheless, the offering sold out, bringing in about $13 million, and ZZZZ Best was off and running. In a telephone interview in May, Mr. Minkow said the company had about 1,300 employees at locations throughout California as well as in Arizona and Nevada.
When did Barry Minkow get out of jail?
Minkow, who was in prison for his FDI conspiracy, was sentenced to another five years for embezzlement for his church scheme. He was released from federal prison on June 6, 2019.
Is king of con in jail?
Minkow was released from prison in 2018 and has since mended his relationship with his sons, who are now seniors in high school, and remarried Lisa.
How old is Barry Minkow?
56 years (March 22, 1966)Barry Minkow / Age
Where is Barry Minkow from?
Inglewood, CABarry Minkow / Place of birthInglewood is a city in southwestern Los Angeles County, California, in the Los Angeles metropolitan area. As of the 2020 U.S. Census, the city had a population of 107,762. It was incorporated on February 14, 1908. The city is in the South Bay region of Los Angeles County, near Los Angeles International Airport. Wikipedia
Is con man a true story?
Con Man is a 2018 American crime drama film directed by Bruce Caulk and starring James Caan, Ving Rhames, Justin Baldoni, Elizabeth Röhm, Mark Hamill, Talia Shire and Armand Assante. It is based on the real-life story of Barry Minkow, who also appears in the film.
Did Barry Minkow play himself in the movie?
Con Man2018Protecting Yourself from Affinit...2006Protecting Yourself from Elder...2006Protecting Yourself from Invest...2006RedemptionBarry Minkow/Movies
What Was ZZZZ Best?
ZZZZ Best was a carpet cleaning and restoration company founded by Barry Minkow that served as a front for a famous Ponzi scheme . The company went public in December 1986 and was quickly valued at over $300 million. Within just seven months of the initial public offering (IPO), however, ZZZZ Best was bankrupt and its assets were auctioned for approximately $64,000. 1
Who created the ZZZZ Best?
Minkow and business associate Tom Padgett created a fictitious company, Interstate Appraisal Service, to defraud banks and other lending institutions out of millions of dollars. Tom Padgett, an insurance claims adjuster, conspired with Minkow to forge documents crediting ZZZZ Best for restoration work and use Interstate Appraisal Services as the source to verify the claims. Increasingly, investors and bankers developed an interest in ZZZZ Best based on fraudulent financial statements produced by Minkow’s firm. 2
How old was Barry Minkow when he started ZZZZ Best?
Barry Minkow formed ZZZZ Best in his parents' garage. The business performed poorly and 15-year-old Minkow was often inundated with customer complaints and supplier collection requests. To create an illusion of a profitable business, Minkow began committing criminal acts, such as check kiting, theft, insurance scams, and fraud, to fund operations and pay suppliers. 2
What caused ZZZZ Best's stock price to decline sharply?
The L.A. Times featured her story, which caused ZZZZ Best's stock price to decline sharply. Lenders began to call their loans and more investigations commenced, unraveling Minkow's dark web of deceit and fraud. Eventually, the truth behind the fictitious companies was revealed and the Ponzi scheme was exposed.
What did the CPAs use to perform their audit?
Assuming an independent third party provided the paperwork, the CPAs used false appraisal documents to perform its audit. When the CPA firm requested to visit a building refurbishing customer site, Minkow and his associates rented a building and created a bogus customer job site. 5
Did ZZZZ Best have a Ponzi scheme?
As the Ponzi scheme continued, ZZZZ Best experienced significant cash flow problems. As a solution, Minkow planned to acquire KeyServ, Sears' authorized carpet cleaner, for $25 million. According to Minkow, the revenues from KeyServ would provide enough cash flow to end the Ponzi scheme. Before the deal was closed, the jilted homemaker sparked a campaign against ZZZZ Best that would expose more than the fraud committed against her. 4
Who created ZZZZ Best?
BusinessDictionary.com says the following about ZZZZ Best: “Company created in the 1980s by Barry Minkow that was involved in massive amounts of fraud.”. “On the surface the company appeared very successful, but most of the profits acquired were from organized crime groups or simply fabricated.
What is ZZZZ Best?
ZZZZ Best (pronounced: zee best) was a carpet cleaning and restoration company that was created in Inglewood, California in 1982 by Barry Minkow. Minkow was sixteen and still at school when he founded the company. The company was involved in huge amounts of fraud. It was a front for a Ponzi scheme. Fraud occurs when a person uses dishonesty, ...
What did ZZZZ Best officials do?
ZZZZ Best officials sued Mr. Minkow. They accused him of misappropriating over $23 million of the company’s money. Minkow was found guilty and received a 25-year jail sentence. Minkow engage in credit-card fraud, stole money from relatives, and staged burglaries so that he could claim the insurance.
When did ZZZZ Best go public?
In December 1986, ZZZZ Best went public and was valued at more than $300 million. Within seven months of its IPO, it filed for bankruptcy. Its were worth a fraction of the initial $300 million valuation when they were auctioned (just $64,000).
How much was ZZZ Best worth in 1986?
However, the majority of its profits came from either organized crime syndicates or they had been made up. In December 1986, ZZZZ Best went public and was valued at more than $300 million.
Who is ZZZZ Best?
ZZZZ Best Founder Minkow Indicted on Racketering And Fraud Charges. LOS ANGELES -- Whiz-kid entrepreneur Barry J. Minkow was charged in federal court with racketeering, money laundering, and fraud in connection with ZZZZ Best Co., a company he founded as a teenager.
How much did Minkow steal from the company?
Among other things, the federal indictment alleges that around July 1, Mr. Minkow stole $500,000 from the company and gave it to two associates who allegedly laundered most of it through Las Vegas, Nev., casinos.
What happened to ZZZZ Best?
The company claimed that its assets had been drained to the point that it was forced into Chapter 11 bankruptcy. Two days later, the Los Angeles Police Department raided ZZZZ Best's headquarters and Minkow's home, and found evidence that the company was being used to launder drug profits for organized crime.
How old was ZZZZ Best?
At the age of 16, while a sophomore at Cleveland High School, Minkow started ZZZZ Best (pronouned 'Zee Best') in his parents' garage with three employees and four phones. In the early days, he had to rely on friends to drive him to jobs since he did not have a driver's license.
What crimes did Minkow and 10 other ZZZZ Best insiders commit?
Minkow and 10 other ZZZZ Best insiders were indicted by a Los Angeles federal grand jury in January 1988 on 54 counts of racketeering, securities fraud, money laundering, embezzlement, mail fraud, tax evasion and bank fraud.
How long was ZZZZ Best in prison?
2014: Five years in federal prison, $3.4 million in restitution. zBarry Jay Minkow (born March 22, 1966) is a former American 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.
What was the deal between KeyServ and ZZZZ Best?
Although KeyServ was twice ZZZZ Best's size, the two companies agreed to a $25 million deal in which ZZZZ Best would be the surviving company. The merger would have made ZZZZ Best Sears' authorized carpet cleaner, and also would have made Minkow the president and chairman of the board of the largest independent carpet-cleaning company in the United States. Soon after the KeyServ deal was announced, Minkow began making plans to raise $700–800 million to buy ServiceMaster in a hostile takeover, and planned to expand to the United Kingdom. Outside of carpet cleaning, he had begun preliminary discussions to buy Major League Baseball 's Seattle Mariners.
Why did Minkow commit securities fraud?
At sentencing and in interviews with media, Minkow claimed that he committed securities fraud because he had become addicted to his migraine headache medication Oxycontin.
Why did Minkow close his business account?
Two banks closed his business account because California law of the time did not 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 make payroll. Faced with a shortage of operating capital, he financed his business via check kiting, stealing and selling his grandmother's jewelry, staging break-ins at his offices, and running up fraudulent credit card charges.
Overview
Barry Jay Minkow (born March 22, 1966) is a former American 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 perpetrate…
Beginnings of ZZZZ Best
Minkow was born in Inglewood, California to a Jewish family, and was raised in the Reseda area of 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 16, while a sophomore at Cleveland High School, Minkow started ZZZZ Best (pronounced 'Zee Best') in his parents' garage with three employees and four phones. In the early days, he had to rely on friends to drive him to …
Going public
At the suggestion of a friend, Minkow took the company public in January 1986, garnering a spot on NASDAQ. The accountant who audited the company before it went public did not visit the insurance restoration sites himself. Had he done so, he would have discovered they were mailboxes located throughout the San Fernando Valley. Minkow retained a 53 percent controlling interest, making him an instant millionaire on paper. Going public seemingly offered him a way t…
Downfall
By February 1987, ZZZZ Best was trading at $18 a share on NASDAQ, valuing the company at $280 million. The company now had 1,030 employees with offices in California, Arizona and Nevada. Minkow's stake was worth $100 million.
The company was still facing severe cash flow shortages from paying investors for the non-existent restoration projects. Minkow learned that KeyServ, the authorized carpet cleaner for Sears, …
Conviction and prison
Minkow and 10 other ZZZZ Best insiders were indicted by a Los Angeles federal grand jury in January 1988 on 54 counts of racketeering, securities fraud, money laundering, embezzlement, mail fraud, tax evasion and bank fraud. The indictment accused Minkow of bilking banks and investors of millions of dollars while systematically draining his company of assets. It also accused Minkow of setting up dummy companies, writing phony invoices and conducting tours …
Release
After Minkow's early release from prison in 1995, he went to work as Pastor of Evangelism at the Church at Rocky Peak in Chatsworth, California. He also became director of the church's Bible Institute.
In 1995, he wrote a first-hand account of the ZZZZ Best scam, Clean Sweep. All of the book's proceeds went toward repaying his victims. His other substantial debt is a $7 million loan from U…
Shorting stock
Minkow's motives were brought into question by multiple news stories concluding that Minkow was shorting stock before he released a report on a public company. According to The San Diego Union-Tribune, Minkow had engaged in this practice as early as 2006. Minkow's critics denounced this practice as unethical, if not illegal. At least one critic accused him of engaging in short and distort, a form of securities fraud which is a reversal of a pump and dump scheme. For instance, …
Lennar
In 2009, Minkow issued a report accusing major homebuilder Lennar of massive fraud. Minkow claimed that irregularities in Lennar's off-balance-sheet debt accounting were evidence of a massive Ponzi scheme. Minkow accused Lennar of not disclosing enough information about this to its shareholders, and also claimed a Lennar executive took out a fraudulent personal loan. In an accompanying YouTube video, Minkow denounced Lennar as "a financial crime in progress" and …