Accountant for ZZZZ Best Convicted of Fraud

An accountant who demanded a bribe to conceal a massive swindle at ZZZZ Best Carpet Cleaning Co. was convicted Monday of five fraud and conspiracy counts, concluding what authorities have called the most significant West Coast securities fraud prosecution in more than a decade.

Norman Rothberg, who accepted more than $17,000 to backtrack from his initial reports that ZZZZ Best was faking millions of dollars a year in insurance restoration projects, was found guilty by the same Los Angeles federal court jury that last week convicted company founder Barry Minkow, 22, of 57 fraud counts.

After Monday’s verdict, jurors made their first public comments on Minkow.

“He didn’t come out smelling like a rose after all,” juror Curtis Barker said of Minkow’s prediction before his indictment that his youth would enable him to escape prosecution after the company he founded at the age of 15 collapsed in ruins.

Jurors said no one believed Minkow’s story that he had been forced into perpetrating the phony insurance restoration jobs by a group of mobsters who infiltrated ZZZZ Best and beat him until he complied with their demands.

“To put it a bit frankly, I think he’s a good con man,” juror Lela Bolden of Walnut said of Minkow. “He had a talent, but he used it the wrong way.”

“He just used and discarded people,” said foreman Mel Tiedemann, a Northrop Corp. aircraft mechanic from Seal Beach.

Throughout the nearly eight ballots jurors took before convicting Minkow, jurors said, was the specter of his young age and lack of business experience. Those were precisely the qualities that Minkow’s lawyer attempted to capitalize on and on which Minkow himself depended when he told a ZZZZ Best board member that he would emerge from the court case “smelling like a rose.”

“I wanted to let him go--even in the end, when I felt there was no doubt, when I felt in my bones he was guilty,” Tiedemann confessed.

But the foreman said most jurors never doubted that Minkow, who claimed to have flunked accounting in high school, had the ability to mastermind the swindle that prosecutors estimate cost banks and investors more than $70 million.

On Minkow’s side, Tiedemann said, was the cock-sureness that comes with being 19 years old and master of a $100-million business empire.

“He took risks that no one else in his right mind would take, and they just went over,” the foreman said. “He walked that fine line. He took that chance. . . . No normal businessman would say, ‘Hey, I’m gonna try this; I’m gonna put this over.’ But not only did he try it, he got away with it.”

Rothberg, 52, of Marina del Rey overheard conversations in the spring of 1987 about falsified insurance restoration jobs by ZZZZ Best and went to accountants at Ernst & Whinney with his suspicions. At the time, the accounting firm was overseeing ZZZZ Best’s planned $40-million acquisition of another carpet cleaning chain.

When an investigation ensued, two former ZZZZ Best officials confronted Rothberg--one of the officials pointing a gun at his own mouth--and Rothberg demanded $100,000 to recant the allegations, federal prosecutors allege.

The ZZZZ Best officials agreed to pay $25,000, and Rothberg never elaborated on the allegations.

Rothberg’s attorney, Richard D. Burda, admitted that the bespectacled accountant took the money but emphasized that his client never actually recanted the allegations and thus never committed a crime. In fact, the lawyer said, it was Rothberg’s original allegations that caused the entire ZZZZ Best house of cards to collapse.

“Norman Rothberg was someone I saw as a hero, who became the whistle-blower,” Burda said. “Our heroes aren’t comic book heroes. Our heroes have flaws. And Mr. Rothberg has a flaw. But I don’t think he committed a crime.”

Rothberg’s sentencing was set for March 6. He could receive a maximum of 25 years in prison.