In 2003, ex-con turned fraud buster Barry Minkow delivered a report to regulators suggesting that MX Factors LLC was engaging in a $39 million fraud. Later that year, MX Factors collapsed when the California Department of Corporations shut it down on the ground that it was operating an illegal Ponzi scheme -- paying off earlier investors with money acquired from later investors.
According (subscription required) to The Wall Street Journal, Mr. Minkow more recently helped law enforcement find mastermind Richard Harkliss, who had fled to Mexico. He was arrested in Arizona while visiting relatives.
The report Minkow prepared on MX Factors is not unlike the one he put together on Usana Health Sciences (NASDAQ: USNA), the multi-level marketing company he has accused of operating an illicit pyramid scheme.
Here's an interesting quote from a recent Forbes piece on Usana:
"Why would anybody take this guy seriously?" Usana spokesman Joseph Poulos said Tuesday. "What is he an expert on? He isn't a forensic accountant. He just committed one very large crime once."
MX Factors is the latest in a string of more than $1 billion in fraud uncovered by Minkow, and that doesn't even include Usana Health Sciences (although you could make a strong case it should).
Rather than rebuking claims made in Minkow's report, Usana has chosen to go the ad hominem route -- focusing on Minkow's criminal past. One can only hope that they will have the fairness to also remind investors of Minkow's stellar track record as a fraud investigator. I somehow doubt they will.
More USANA Health Sciences news
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Zac Bissonnette: Oh snap! Barry Minkow fires back at Usana Health Sciences
Zac Bissonnette: Forbes slams Usana Health Sciences (USNA)
Zac Bissonnette: NZ National Business Review slams USANA Health Sciences (USNA)
Zac Bissonnette: USANA has a product, so it's not a pyramid scheme?
Zac Bissonnette: Is Baghdad Bob working for USANA Health Sciences?
Zac Bissonnette: Is Usana selling vitamins, a pyramid scheme, or an illegal tax shelter?
Authorities charge head of MX Factors with fraud
Posted Sep 11th 2007 7:10PM by Zac Bissonnette
Filed under: Newspapers, Scandals
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Reader Comments (Page 1 of 1)
10-28-2007 @ 2:15PM
ng said...
Well, I'm certain that Minkow wouldn't do something just out of fun. He is try to get paid by some medicine companies because Usana Heath Science Inc. make a huge impact in medical world. I can forsee that some medicine companies will shut down because of WTO and also people are getting more concern on nutritional. In further, medicine wouldn't prescript by doctor. Although there are many of those medicine product approved by FDA, but it doesn't mean that the side effect can be neglected. What most medicine companies cares is about the MONEY, who care you're getting sick after taking medicine?
Above is one story, how about the on other hands " competitor"? They're certainly have, but not severe enough to paid Minkow. What nutritional supplement companies does the same as Usana Health Science by helping others to get healthy. The possibility are quite slim.