Jeff Smith 2:30 p.m., June 26
Minkow may face criminal charges related to his former church
He may have used Community Bible Church funds in his fraud-busting business
Barry Minkow, the con man-turned-pastor-turned con man, may face more criminal charges, according to a story in the New York Post today (Sept. 25). Minkow is now serving a five-year sentence in the Federal Medical Center in Lexington, Kentucky after he was found guilty of defrauding builder Lennar Corp. through his Fraud Discovery Institute, which was tied to Mira Mesa's Community Bible Church, where he was head pastor. Minkow split his time between saving souls and chasing crooks through the institute.
He actually did some high-quality work exposing monkey business at multi-level marketing companies, but he got into trouble when he made untrue charges against Lennar while shorting the stock. Officials in that company's home state of Florida nailed him on fraud charges, and he went to the Kentucky prison, where he is in drug rehabilitation. He is due to be released next year, unless the San Diego matter extends his stay behind bars.
The Post based its story on a letter written by the federal prosecutor in Miami who handled the Lennar case. He wrote a letter to a Florida federal judge stating that Minkow "is likely to be transported soon, via a writ, to the Southern District of California in connection" with the Community Bible Church charges.
Federal investigators have been investigating claims that Minkow used church money to support the investigations business. Two years ago, the church made allegations to the court that delayed Minkow's sentencing. The letter said he improperly used church funds to finance Fraud Discovery Institute.
In 2007, I did a column about a member of that church, William Newsome, who, among many things, complained that the fraud-busting institute was on the premises of the church. Newsome peppered the church with financial questions that went unanswered. Newsome got suspended by the church.
As a teenager in the Los Angeles area, Minkow created a multimillion dollar stock fraud, ZZZZ Best, supposedly a carpet-cleaning operation. But almost all the sales were fraudulent and he was sentenced to 25 years in prison. He got out in seven years after supposedly finding God. He became head pastor of the church and raised a bundle of money for it, as its growth spiraled upward.
Then Minkow went too far in the Lennar case, and it has been all downhill since.