Judge Again Rejects Cut in Minkow Bail

A federal judge refused again Monday to reduce the $1.5-million bail of former ZZZZ Best carpet cleaning entrepreneur Barry Minkow, ruling that the young businessman’s chances of fleeing prosecution have been “substantially increased” since six of his former associates pleaded guilty in the case.

U.S. District Judge Dickran Tevrizian also cited evidence of “fraud and deceit” in Minkow’s past business dealings, including new evidence that Minkow--who has claimed he was the victim of experienced businessmen who used his carpet cleaning business to make money illegally--was involved in criminal activity from the time he was 17.

1983 Incident Cited

Assistant U.S. Atty. Gordon A. Greenberg introduced an Allstate Insurance investigation report alleging that Minkow in 1983 stole two blank vouchers from an Allstate adjuster, Thomas Padgett, then filled them out for $7,400 and forged Padgett’s name in order to cash them.

Confronted with evidence of the theft, Minkow “readily admitted” it but said he planned to pay the money back if discovered and believed that “since this would be a first offense on his part and the fact that he was a minor, he would probably get off with a slap on the hand from authorities,” the Allstate investigators said in their report. The company did not seek criminal charges against Minkow.

Padgett has already pleaded guilty to helping Minkow later set up a scheme to inflate the value of ZZZZ Best stock by making it look as though the company was earning millions of dollars repairing flood and fire damage for insurance companies.

Attorney’s Viewpoint

Minkow’s lawyer, David Kenner, said Monday that it was Padgett who falsified the vouchers as part of a kickback scheme in which he was involved and who persuaded Minkow to lie for him to protect his job.

“The judge seems to have a predisposition with respect to Mr. Minkow’s position in this case that borders on being biased and prejudiced against Mr. Minkow,” Kenner said after the hearing.

“What he seems to being saying is that a prerequisite to his being released on bail is to prove that he’s innocent,” Kenner said.

Minkow’s lawyers have complained that he is being held in a 5-by-7-foot cell in Terminal Island federal prison.