Minkow Accuses FBI of Failing to Protect Him
ZZZZ Best Carpet Cleaning Co. founder Barry Minkow angrily exploded under cross-examination Wednesday, accusing the FBI of failing to protect him when his company was under siege by mobsters and claiming that he came forward with the truth because he had “nowhere to hide.”
In an emotional outburst that prompted U.S. District Judge Dickran Tevrizian to recess Minkow’s fraud trial early, the 22-year-old businessman said he was backed into a corner by organized crime figures who had threatened to kill him and his family and, at the same time, by law enforcement authorities who knew he was the target of an extortion but who did nothing to help.
“The FBI knew what was happening, they knew what was going on in my company, and they didn’t do a damn thing for me,” Minkow declared, his voice rising shrilly during his first day of cross-examination. “I don’t think anybody on this Earth could protect me. They will not stop. They absolutely will not stop. . . . Guards, government, FBI, IRS, you can’t hide from these guys.
“I’ve got two choices,” Minkow announced bitterly. “Five-hundred years by the indictment, or death by the mob. I got a real big chance. My life’s over. I’m not gonna live.”
The cross-examination by Assistant U.S. Atty. Gordon Greenberg represented the government’s first opportunity to question Minkow about his claims that he engineered a massive securities and bank fraud at ZZZZ Best under orders from a group of organized crime figures who beat him and threatened him into submission.
Minkow, facing up to 500 years in prison if convicted on all 57 fraud counts, is mounting a duress defense in which he admits that he committed the fraud but claims that he is not legally responsible because he was coerced with threats of violence into committing the crimes.
In testimony over the last week, Minkow has said former stockbroker Maurice Rind, convicted of securities fraud, and convicted extortionist Richard Schulman were the true architects of the plan to take money out of ZZZZ Best while manipulating the price of its stock.
Reputed mobsters Joseph Mangiapani, Robert Viggiano, Bucky Caravaggio and Martin Tacetta were among the figures who lurked constantly in the background with threats of violence--and occasional beatings that caused Minkow to begin vomiting blood--unless the young entrepreneur complied with their demands, he said.
At the beginning of his inquiry, Greenberg directed Minkow to tally up the number of days he presided as president and chairman of ZZZZ Best--a total of 1,825--and then count up his crimes.
“During these 1,825 days, there were times when you were committing a crime virtually every single day, isn’t that right, Mr. Minkow?” Greenberg asked. “How many of these hundreds of crimes that you participated in during this period are you willing to assume full responsibility for?”
“I’m prepared to accept responsibility for all of these crimes, Mr. Greenberg,” Minkow replied.
“Are you telling me that you’re pleading guilty, and we can all walk out of this courtroom?” Greenberg asked.
“I’m telling you that I committed these crimes, Mr. Greenberg,” Minkow said.
The prosecutor then probed Minkow’s assertions that he set up a fraudulent insurance restoration business at ZZZZ Best because he feared for his own safety and that of his parents, sisters and fiancee. Why, Greenberg wanted to know, had Minkow not sought help from the FBI or from police?
Minkow said the mobsters appeared to have ties to law enforcement in Los Angeles and he did not trust the FBI, in large part because agents had questioned him in 1985 about allegations that purported mob figure Jack Catain was extorting money out of ZZZZ Best.
Minkow said he had testified about Catain before a federal grand jury but the FBI failed to act on the testimony or clamp down on other purported crime figures who had infiltrated the company.
Unaware of Involvement
Federal prosecutors acknowledge that Minkow did provide testimony against Catain, but claim they were unaware at the time of Minkow’s own involvement in fraud at ZZZZ Best.
Greenberg then asked why Minkow had not at least hired private security guards for his family in light of his decision to testify in Los Angeles federal court over the last week about the involvement of alleged Mafia figures in ZZZZ Best.
“Has being charged with the crimes in this indictment lessened your desire to protect your family?” the prosecutor asked, and Minkow shook his head.
“My family is disgusted with me,” he said. “I’ve lied about it for so long that we decided to come forward and tell the truth. I’ll be damned if I’ll let another 19-year-old entrepreneur get swallowed up by these sharks that are out there.”
Threatened in Prison
Earlier in the day, under questioning by his own attorney, David Kenner, Minkow revealed that he had been threatened while in prison at Terminal Island after his arrest last January on the fraud charges.
Carmen DiNunzio, one of the men Minkow has said threatened him at ZZZZ Best, came up to him unexpectedly in the visiting room, he said. “He kissed me on the side of my cheek, both sides, and he said, ‘You got trial.’ He said, ‘You can’t hide from me, don’t do the wrong thing, or I’ll kill you.’ ”
Kenner also played a secretly recorded telephone conversation in which Minkow informed Catain, who has since died, that he was no longer going to pay him the $600,000 he had agreed to pay him as part of a settlement to a lawsuit.
“Well, you got a contract,” Catain said.
“I know what the consequences are to the contract. I’m fully aware,” Minkow said.
“OK, very good. All right. Yeah, sure, we’ll take care of you,” Catain said.
