Tried to Kill Self in Prison, Minkow Testifies

Barry Minkow testified Thursday that he tried to hang himself in prison when he became despondent over the demands being placed on him by organized crime figures who had pushed his ZZZZ Best carpet cleaning company into financial ruin.

Minkow, 22, who is facing more than 50 charges involving millions of dollars obtained through fraud from banks and investors, said during his second day of cross-examination that he became so distraught over his predicament that he attempted suicide in Terminal Island federal prison shortly after his arrest last January.

Assistant U.S. Atty. James Asperger dismissed the purported suicide attempt as a fabrication. “It’s the first anybody’s heard about it,” the prosecutor said.

Thursday’s cross-examination was less confrontational than the day before, when Minkow lashed out angrily at the government, but prosecutors nonetheless scored major gains with an audiotape depicting Minkow’s apparent attempts to cover up his involvement in the fraud and with admissions from the young businessman that he repeatedly exploited friends and business associates in his efforts to perpetuate the fraud.

Prosecutors also sought testimony about Minkow’s lavish life style, obtaining an admission from him that he “turned to drugs.” But Minkow said that was part of his way of coping with the pressure he was facing from a pack of mobsters who had overrun his company and forced him to be a “trained puppy” acting as a front man for the company.

Romanced Financial Executive

Minkow testified that he romanced a former Prudential Bache Finance Ltd. vice president, from whom he was seeking approval for a $225,000 credit extension, because he was desperately trying to get $750,000 to pay off one of the purported organized crime figures who was controlling the company.

The vice president, Sheri Elowsky, testified earlier in the trial that Minkow flew her out to Los Angeles from New York, wined and dined her, took her back to her hotel and later told her he loved her. When Minkow’s $225,000 check bounced and his company collapsed, Prudential Bache was out at least $2 million in credit extensions and Elowsky lost her job.

“Sheri Elowsky came to California and I had one goal in mind. I had to get that money. I had to,” Minkow testified. “I took her out to dinner, I took her back to the hotel, and at that hotel, we did more than she testified to.”

At this point, U.S. District Judge Dickran Tevrizian interjected: “Are you proud of that?”

“I’m not, your honor, but I did what I had to do,” Minkow replied.

“Then be a gentleman about it,” the judge said curtly.

Later in Minkow’s testimony, Tevrizian interrupted to ask Minkow: “When did you start lying?” When Minkow estimated that his cover-up started in 1983, the judge asked: “When did you stop lying?”

At that point, Minkow told of his suicide attempt. “When Mr. Kenner, in Terminal Island, after I tried to hang myself, told me either face this or you go to jail for 500 years--that’s when I stopped lying.”