Barry Minkow gets 5 years in prison in Lennar fraud case
This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.
Barry Minkow, former boy-wonder businessman, former born-again minister, former fraud buster and former FBI informant, is headed back to prison.
A federal judge in Miami handed Minkow, 45, a five-year sentence Thursday -- the maximum possible term on his plea to a single count of conspiracy to commit securities fraud.
Minkow burst onto the national stage in the 1980s as the head of ZZZZ Best, a carpet and furniture cleaning company he started in his parents’ garage in Reseda.
He spent more than seven years in prison when the company turned out to have defrauded its investors, and he later became the head pastor at Community Bible Church in San Diego and head of his own Fraud Discovery Institute on the side.
But one of Minkow’s attacks on alleged fraud went badly astray. In March he pleaded guilty to conspiring to torpedo the share price of Lennar Corp.
Minkow described the scheme as an attempt to force the Miami homebuilder to cough up cash and stock to settle a long and bitter legal battle with a developer. They had gone into partnership to build the Bridges at Rancho Santa Fe, an impressive private golf community that never reported a profit.
Minkow said he used the Internet and his contacts at the FBI to recklessly spread falsehoods about Lennar.
In pleading guilty, he also acknowledged placing illegal bets that Lennar’s share price would fall based on confidential information -- that the FBI had launched an investigation of the company based on his own allegations.
Minkow’s attacks knocked more than $500 million off the stock market value of Lennar. In sentencing him Thursday, Judge Patricia Seitz also ordered him to pay $583 million in restitution, according to Bloomberg and Reuters reports from the courthouse.
L.A. attorney Daniel Petrocelli, who represented Lennar, immediately issued a statement referring to the ongoing investigation and Minkow’s cooperation with federal authorities in hopes of someday having his sentence reduced.
“The Miami offices of the US Attorney and FBI deserve high praise for their efforts in prosecuting this case to protect the integrity of our securities markets. We expect that the other individuals responsible for the illegal attack on Lennar’s stock and shareholders will soon be brought to justice.’
RELATED:
Minkow accused of misusing church money
--E. Scott Reckard
