This post is part of a series on some of the most memorable companies that have disappeared.
In the mid-1980s, Barry Minkow was the toast of Wall Street. His Zzzz Best Carpet Cleaning company, which he started in his garage at age 16, was an overnight success and, by 19, he was a millionaire. Investors flocked to buy stock in the fast-growing company that was earning millions from lucrative restoration projects.
There was just one problem: the restoration projects weren't real, the company was little more than an elaborate Ponzi scheme, and Minkow wasn't making his money cleaning carpets. He was laundering money for the mob. After a Los Angeles Times reporter broke the story on Minkow's fraud, the scheme unraveled and Zzzz Best filed for bankruptcy. Minkow was charged with pretty much every white-collar crime known to man, and he spent seven and a half years in federal prison.
But that's only the beginning of the Barry Minkow story: Minkow attended college from his cell, was paroled early at the urging of the judge who sentenced him, and became a pastor in San Diego -- not far from the scene of his crimes. Using the skills he learned committing fraud, Minkow set about uncovering it and, to date, has helped the FBI and other government agencies bust up more than $1 billion in fraudulent investment schemes: an amount far larger than the crime Minkow perpetrated.
Most recently, Minkow has gained notoriety for his accusations of fraud at leading multilevel marketing companies Herbalife (NYSE: HLF) and Usana Health Sciences (NASDAQ: USNA).
Let us know in the comments what you remember about Zzzz Best. And be sure to check out other Companies That Have Vanished.
The Wal-Mart Weekly: Retailer accused of sweatshop conditions in Bangladesh
Fog clearing - maybe. Clear skies - no! GE, JNJ, MRK, PG, RTN, WFC
Cramer on BloggingStocks: A fighting chance for the credit markets.
Reader Comments (Page 1 of 1)
6-06-2008 @ 12:01PM
janine said...
I remember zzzbest well, invested in the stock myself back in the 80's. Made a few $$ (not much) got out & moved on. Then later when all hell broke loose, i remembered how lucky I was to bail out when I did. Unbeleiveable how he pulled that off so easily. It's true-- there is one born every minute.
6-06-2008 @ 12:19PM
Pam said...
I used to work at the Prison, in Lompoc, when he was there. Ivan Boesky too way back when. Just FYI.....
6-06-2008 @ 12:35PM
mary erickson said...
And he continues to be somewhat of a con-artist.Makes $$ selling his story of redempton as a Pastor and lecturer in Orange Cty and whoever else will shine the light on his life story. Not a bad story actually, and if he is now an honest man, good for him.....however you would be surprised at the "asking price" to have him showcased at my CHURCH. Now, is that what Jesus would do Barry??????
6-08-2008 @ 6:36PM
Joyce said...
No con artist. He can't help being the high-energy person he is. The last I heard, he uses proceeds from his "story" to continue to voluntarily pay the debts that he no longer legally owes. He is definitely putting action to his faith in God. His church actually does feed the poor, clothe the needy, etc.
6-14-2008 @ 10:36PM
bdashe said...
He is still a fraud and will never give up his ways, rains down on decent people under the guise of "born-again" and makes millions on others' suffering. He is the same level as Spitzer. Karma is a b*tch, it'll come back...
6-27-2008 @ 1:49PM
Ron S said...
Apparently, "bdashe" above DID NOT READ the previous posting by "Joyce".
Pastor Barry DOES INDEED use proceeds of his book to PAY DOWN the DEBT -- which he LEGALLY DOES NOT NEED TO DO -- but DOES ANYWAY.
His Church is in San Diego County, NOT Orange County. We do NOT regularly attend that church, but in April, 2008, we attended a Memorial Service held there for Jan, a good friend. Among several others, he spoke highly of Jan and Jim, our friends at that service.
I, myself, have learned to respect and even admire people such as their Pastor, Barry Minkow, who HAVE GONE ON to grow and pass on the good he has learned.
Possibly "bdashe" needs to LEARN that there ARE indeed people who DO LEARN to move on and repair their lives, and then work for the GOOD of others. Possibly he could read more of this man's recent history.
He has cooperated -- as stated above -- in the investigation and prosecution of others, who did what he did. He DID pay his legal debt in prison, and has indeed reformed.
He is also interviewed from time to time on financial TV programs, such as Neil Cavuto, to teach the public HOW TO watch for scams such as the one he perpetrated and did time for.
To do so, this tells me this man has GUTS.