Fraud Figure Minkow Switched to Halfway House : Prisons: Convicted in $26-million ZZZZ Best swindle, former teen-age entrepreneur has pledged to begin repaying victims. Some remain skeptical, however.
Barry Minkow, the former ZZZZ Best carpet cleaning whiz convicted of swindling investors out of more than $26 million, ended seven years in custody Wednesday with a bus ride from the federal prison in Lompoc to a halfway house in Echo Park.
Minkow was released after serving less than one-third of his 25-year term because of good behavior. He will remain at the halfway house until April 12, when he is due to be set free on parole, said Monica Wetzel, a spokeswoman for the Bureau of Prisons.
During the next four months, Minkow, 28, will work at a Los Angeles law firm and begin the court-ordered difficult task of restitution, paying back the millions owed investors in his failed Reseda-based company, said his attorney, Randy Long.
Minkow, who said he found God in prison, has written an autobiography--his second--to be published early next year by a Christian publishing house. He has pledged to pay back the defrauded money with a portion of any profits from the book and also plans to go on a speaking tour.
“Anybody else from a business perspective would have filed (personal bankruptcy) and flushed the debts,” Long said of Minkow’s desire to make amends.
But James Asperger, a former federal prosecutor who helped convict Minkow, said he is withholding judgment on Minkow’s rehabilitation.
“Not only am I skeptical, but I think the world will be skeptical until he proves he can change his ways,” Asperger said.
Another skeptic is Ann Randall, who says she was cheated out of $150,000 in cash plus stock in Minkow’s company.
“The only way justice can be served is for him to pay back everyone their money,” she said from her home in Chico. “He stole such a large sum of money and I have no way to replenish it. He changed my whole lifestyle. . . . Maybe he has developed a conscience and will pay us back.”
Minkow started his carpet cleaning company while in high school in his parents’ garage and later wrote his first autobiography, telling how he became a teen-age millionaire.
For more than two years, his talkative charm convinced accountants, lawyers and investment bankers that his company was flourishing not only by cleaning homes, but through big jobs restoring office buildings damaged by fire and flood--a sideline supposedly earning up to $43 million a year.
Within a few years, Minkow, with the help of some colleagues later described by authorities as having organized crime ties--transformed the private company into a public one. Its stock soared in value , helped by Minkow’s knack for publicity and ZZZZ Best’s impressive balance sheets. In the early summer of 1987, Minkow was poised to take over carpet cleaning services offered by Sears, the nation’s largest retailer.
Then it all collapsed. It turned out that the majority of the lucrative restoration jobs never existed--and neither did the revenues. Within days of Minkow’s resignation in July, 1987, ZZZZ Best was defunct.
