All language subtitles for American Greed s09e06 The Dirtiest Con.eng

In this episode of American Greed, Barry
Minko starts a business in high school.

If you work hard and you're honest,
you'll do fantastic.

And he becomes a sensation on Wall
Street. Barry Minko made his first

the time he was 19.

From teenage millionaire, he grows up to
become a nationally known fraud

fighter. Even profiled by the likes of
60 Minutes. He searches public records,

employs private detectives, and goes
undercover.

But all along, Barry Minko is pocketing
millions in his own perfect scam.

We know fraud.

And you're just fraud.

He should know. Because Barry Minko
acting as a fraud fighter is like having

thief guard the bank vault.

In the working class town of Reseda,
California, just north of Hollywood, a

-year -old boy is about to prove that
the American dream is alive and well.

His name is Barry Minko.

Diagnosed as hyperactive, he's skinny
and awkward and desperate for

And so in 1982, when Minko is still in
high school, he chooses an unlikely

ticket to fame and fortune.

carpet cleaning.

My name's Barry. Can I help you?

He borrows some money to buy a few
machines, hire some friends, and working

of his garage, he opens Z -Best Carpet
Cleaners.

We are licensed, bonded, and insured,
and we guarantee all our work 100 % in

writing. He's savvy enough to know that
he needs to do some marketing and

eventually hires Jerry Carr, who has
just started her own PR firm.

When I first met Barry in the beginning,
When he was this young boy, he wasn't

arrogant. In the very beginning, he was
actually not even sure of himself.

Not long after Z -Best opens for
business, Minko's story is featured on a

station. Since he got his business
license about four months ago, he's

close to $10 ,000. Not bad when you're
16.

If you work hard and you're honest,
you'll do fantastic.

But in truth, it's not that easy.

From the moment Barry started his carpet
cleaning business, he was always,

always, always in the hole, always
having a crisis coming up that he had to

deal with. And he would deal with it,
one crisis after another crisis after

another crisis.

And he does that by stealing. He steals
and then pawns his grandmother's

jewelry. He steals cashier's checks from
a liquor store.

He rips off his insurance company,
reporting a burglary that never

And then there is credit card fraud.

Robin Swanson gets a taste of that when
she orders a $24 floral arrangement from

a flower shop Minko has just bought with
a friend.

I gave them my credit card over the
phone, and then a month later I got the

bill, and it said $601 and something,
over $600.

And that was on top of the $24 charge
for the flowers.

She calls the shop and is told to speak
to Barry Minko. I called, and he

answered, and he was charming. You know,
and he says, oh, my gosh, I'm so glad

you called because I saw that there was
a mistake. I was just getting ready to

call you, and I'll put through a credit
right away.

But no credit comes.

And because she trusted Minko, she has
delayed reporting the error. Now she is

stuck with the charge.

So I called again.

Well, he was very abrupt this time. He
wasn't very nice.

And he said, I can't talk to you right
now.

That's because Barry Minko, in a short
amount of time, has hit the big time in

many ways.

Pumping steroids and iron, he is no
longer a scrawny kid by a lot.

Following the news stories about him,
customers and investors come pouring in.

Minko is expanding his business.

The Z -Best vans are everywhere.

When he turns 19, he buys a big house
and is driving a $60 ,000 Ferrari.

When I was in 10th grade, my two friends
got two brand new trucks. I had a 1972

Buick, which we called the Bomb.

They still got the 83 trucks, and I got
an 85 Ferrari.

Well, that's what he tells the public.

The truth is that Minko is in debt up to
his ears. He is constantly bringing in

new investors and taking out new loans
to make payments on old ones.

And that is called a Ponzi scheme.

It was always a Ponzi scheme for Barry.
Even though Barry wouldn't have known

what a Ponzi scheme was if you had asked
him at that time. It was a Ponzi

scheme. I'm Barry Minko, president of Z
-Best Carbon Cleaning. Minko knows he

needs help.

And so he hires Mark Moores.

Moores is running his own company,
matching investors to small businesses.

He wanted as much money as he could get
his hands on, and he offered to pay me a

very, very nice commission for raising
money for him.

Minko tells Moores that although the
public face of Z -Best is the carpet

cleaning business, his real income is
from insurance restoration work, fixing

buildings damaged by water or fire.

It has slowly escalated upward from a
very modest start to maybe $20 ,000, $30

,000 jobs, to where now he was having a
chance to do million -dollar, multi

-million -dollar jobs.

And he says the profit margins are huge.

Investors can expect to get their money
back plus 50%. So an investor can go,

gee, I'm putting up a million and a
half.

In four months, I get my million and a
half back.

And I get $750 ,000 profit.

And they go, this is amazing. It's such
a great deal.

Moore starts working for Minco, making
sure new investors get their first

exactly as promised.

I would come back to the investor with a
cashier's check for all the money he

invested plus all his profit.

And I go, here's your $2 .2 million.

And before I could walk out of the room,
they would say, well, wait a minute,

Mark.

Do you have any other jobs that need to
be done? Can I reinvest this?

And they do reinvest.

But still, the company is in serious
financial trouble, weighed down by

of dollars of debt.

And then, salvation.

A small Wall Street firm offers to host
a public offering of the best stuff.

There is just one problem.

Once a decision had been made to take
the company public, Barry called me into

his office and said, I have a confession
to make to you.

I said, what is it? He goes, one of the
jobs that you've been trying so hard to

raise money for. He goes, one of them
was a fake.

And I was, you know, stunned.

Mors later learned that it's not just
one fake job.

Minko has been faking contracts for
every single restoration job.

There has never been a real job.

Next on American Greed. Last week, I
raised $15 million from the public.

How to con Wall Street before turning
21.

Terrific Tommy's here. We're going to
clean your carpets. In the mid -1980s in

Los Angeles, a local carpet company, Z
-Best, is taking its pitch to

I'm Bane. I'm Switch.

You want to know about our two -for -one
offer?

The ads argue that Z -Best is different
from others.

It's time you called us. I'm Barry
Minko, president of Z -Best Carpet

Because it is honest.

The company is doing so well, Barry
Minko is preparing for a public stock

offering. He is the picture of success.

You know, he was driving his Ferrari, I
was driving my Porsche Turbo, and we

just looked like a couple of zany,
yuppie bachelors. What was really

is we were chewing our fingernails down
to our elbows.

praying that the public offering would
come in and come in properly, and then

that that would solve all of our
problems.

The problems are loans and lies.

For years, Minko has been telling
investors and banks that in addition to

carpet cleaning business, he has
contracts worth millions of dollars to

buildings damaged by water and fire.

But he does not have real contracts.

He has forged documents that look like
lucrative contracts with a phony company

he created.

He uses the fake contracts to attract
investors and get loans. And he always

needs new money to pay off old debts.

But now, Minko and Moores tell
themselves that will change after the

offering.

There'll be more than enough money
between the offering and the...

credit lines that we were assured we
would get once the offering was done to

off everybody who was, to use Ponzi
scheme words, upside down. We could pay

everybody and then just stick to the
straight and narrow.

But it won't be easy.

Minkow first needs to maneuver his fraud
through the financial scrutiny of

accountants on Wall Street.

No problem.

Mark Moores has it covered.

And so I started creating documents by
the...

dozens, over time it was in the
thousands, making those restoration jobs

like a complete portfolio.

Moores knows little about the contracts
he needs to create, and he knows now

that his mistakes are obvious.

Here's the paperwork for a job in a 16
-story building in Sacramento.

But my favorite on this whole sheet has
to do with this handwriting here. I was

asked by one of the auditors how many
square yards of carpet were in this 16

18 -story building.

And I announced that there were 379 ,000
square yards of carpet.

If you do the math, that's about 3 .5
million square feet of carpet. And it

would take a building about 80 or 90
stories high to have all of that.

But no one catches the errors.

The phony paperwork makes it through.

The auditors have just one request.

They want to personally see that job in
Sacramento.

On a hope and a prayer, Morris heads to
Sacramento in search of a 16 -story

building to match the job on the phony
contract.

We did find an 18 -story building that
was virtually brand new.

And I thought, look, 16, 18 ago, we're
close enough.

He tells the leasing agent he wants to
rent a few floors, but he needs his

of directors to check out the space
immediately, this Sunday, before he can

the lease.

He then slips the security guard some
cash to pretend he recognizes Morris

he returns.

So sure enough, the next day when we
came in, and he said, Hi, Mr. Morris,

to see you again, sir. How you doing?
Guys did great work.

Just that silly song and dance.

really gave a lot of satisfaction to the
people doing the due diligence.

It works.

In December, the public offering of Z
-Best sells out, bringing in $15 million

in capital.

As the talk soars, Barry Minko is not
only worth $100 million, he is now the

wonder boy of Wall Street. Barry Minko
made his first million by the time he

19. Now his company is one of the
hottest stocks on Wall Street.

At the time, he is the youngest person
in American financial history to take a

company through a public stock offering.
I raised $15 million from the public.

The city of Los Angeles declares a Barry
Minko Day.

I remember being on that stage
presenting Barry, and there was everyone

Everyone from USA Today to CNN,
everybody.

He was the story, I think. I think he
was the story in those days.

A few months later, Minkow is in
negotiations to buy a large national

cleaning business.

And that unsophisticated boy in the
garage is long gone.

We're on our way to being the General
Motors of the carpet cleaning industry.

But Barry Minkow is about to meet his
match.

In all his success, he has forgotten
about Robin Swanson, which he has not

forgotten about him.

The wonder boy of Wall Street still owes
her $600.

She and her husband, Bill, take their
case to small claims court, and then

heads to Minkow's office to serve the
papers.

A few guys in the parking lot approach
him. He tells them he is looking for

Barry Minkow.

And this one guy says, well, I'm Minkow.

Do you know who I am? And I said, no.

He said, well, I'm Barry Menkau. And I
said, well, good. Here's some papers for

you to show up in court. You owe me
$600.

And he took the papers and he ripped
them up, threw them on the ground, and

said, that's just chump change, punk.
And one of the guys pulled me around and

took a swipe at me with his open hand
and knocked my brand new sunglasses

off. And Barry Menkau stepped on them
and crushed them.

And for Robin Swanson, Minko's rising
celebrity status becomes even more

infuriating. It just made me mad.

So I called the L .A. Times and I said,
you know, this guy's a crook and I can

prove it.

Days before his big deal is finalized,
her story makes newspaper headlines.

Behind the whiz kid is a trail of false
credit card billings.

It turns out Robin Swanson is not alone.

Minkow has stolen as much as $72 ,000 in
false credit card charges.

An assistant U .S. attorney decides to
look into his business.

Eight months later, he and his partners
are indicted for conspiracy to commit

fraud.

I remember laying in bed and my son's
dad coming up with the newspaper

and saying to me, you always wanted
Barry on the front of the L .A. Times.

And the Daily News and the Herald
Examiner.

Well, you just got your wish. The only
problem is he's in handcuffs.

Mark Morris turned himself in
immediately.

The first thing I can say to you is it
was a tremendous set of fear what the

future is going to hold. And I'm going
to be going to jail.

And relief.

Incredible, incredible relief.

This huge weight off my shoulders.

Moores pleads guilty to securities and
bank fraud.

He is sentenced to eight years in
federal prison.

And Minko?

He's interviewed on 60 Minutes and
denies it all. He says that he was the

who was duped. The charges against him
are all false.

No, I thought I knew what was going on,
that everything was perfect.

A jury does not believe him.

He is convicted on 57 counts and
sentenced to 25 years.

He thought the whole process was a joke
and that it was a game for Barry. He was

just an arrogant young man that had no
responsibility and a broken set of

values.

Next on American Greed, from prisoner to
fraud fighter. Welcome to Fraud Biz,

making the American economy safe again
for the American public.

But can Barry Minko sell himself as a
changed man?

It is now 1995.

Barry Minkow has been granted an early
release from federal prison for good

behavior. He is leaving the halfway
house where he served his final months,

declaring his remorse.

Actions have consequences. There's no
lasting meaning, contentment, or peace

a life that puts money above people.

Wait. What happened to the Barry Minkow
we used to know?

People can change because God changes
people.

Oh, he found God in prison.

He earns a degree from Jerry Falwell's
Liberty University.

And soon he becomes a pastor at the San
Diego Community Bible Church.

Father, I'm a sinner and I need a
Savior.

Debbie Roller is a member.

As churchgoers, we believe you go to
church for grace.

and Barry was really great about
promoting grace in the church. And so he

given grace, and he taught us how to
give grace.

Minko is so effective as a minister, the
church grows ten times under his

leadership. I pray for the encouragement
of grace, just like you showed it to me

when I didn't deserve it.

From the start.

He tells the congregation the details of
his past.

We said we were doing these huge
restoration contracts that we never did,

created 20 ,000 fraudulent documents
with whiteout and copy machines.

And he is forgiven.

That was the old him, you know. So we
look at him in a different light because

as churchgoers, that's what we're asked
to do is to look at people in God's

eyes. At one point, a member of the
church asks Minko to look into an

scheme. When Minko finds evidence of
fraud that results in an indictment, he

discovers that a former fraudster can
become a fraud fighter.

He starts a radio show.

This is Barry Minko. You're listening to
Fraud Biz.

And a series of videos.

And he has a business, the Fraud
Discovery Institute, that exposes

-dollar scams.

And he sometimes works as a source for
the FBI. It was the Ponzi scheme and the

mutual fund that didn't exist.

As a result of his good deeds, Minkow is
released from the requirements of his

restitution.

And once again, the news media is
captivated by the story of Barry Minkow.

By 2005, he is back on 60 Minutes.

He searches public records, employs
private detectives, and goes undercover.

In his media appearances, Minko says he
is doing this work because he cares

deeply about investors losing money and
stopping scams.

Every day I don't do something,
somebody's pouring money into this deal.

But in time, Minko adds another motive,
to make some money for Barry Minko.

By 2007, his Fraud Discovery Institute
is taking on publicly traded companies,

like USANA Health Services.

He creates websites and videos to spread
his allegations of fraud, even

interviewing victims.

Are you thinking some things to describe
your experience with USANA?

Disappointment? Oh, yes.

So much disappointment.

Minko looks concerned, but he is also
looking to make a profit.

What most people don't know is that
before he releases his report, Minko

stock in USANA.

That means he is betting that the stock
price will go down when the news media

reports his allegations.

Because of the persona that he
cultivated, he had the ability to impact

views of a company.

So when Barry Minkow issued a public
statement, he was often able to

use some very large microphones to get
that information out. And those large

microphones allowed him to have a very
real market impact.

Following Minko's report, USANA's stock
price does go down. And because he has a

short position in USANA stock, the lower
the stock falls, the more money he

makes. But he doesn't quit there.

His next move is to meet with the
company executives and offer a

a price.

That's particularly telling to me
because it identifies how strongly he

those fraud allegations.

truly believe those statements to be
true, you would not be inclined to

those statements in exchange for
compensation.

They lost money because they were doomed
to fail and never knew it up front.

But reportedly, some companies do pay
hundreds of thousands of dollars just to

get Barry Minko to stop talking.

Next on American Greed, Minko takes on a
Fortune 500 company and levels very

serious allegations.

We know fraud.

And you're just fraud.

They don't know that clear across the
country in California, another kind of

trouble is brewing.

It is instigated by this man, real
estate developer Nicholas Marsh.

For nine years, he and Lennar develop a
luxury home community called The

Bridges. Marsh has paid tens of millions
of dollars on the project, but he

claims he is owed more, hundreds of
millions of dollars more.

Stuart Miller is the CEO of Lennar, a
company founded by his father.

By 2008, we are finding that we're being
sued by Nick Marsh.

We can't quite put our finger on where
this is coming from, except for the fact

that the economy is spiraling downward
and Nick Marsh has run out of money.

His lawsuits are moving slowly.

And so in July, Marsh takes matters into
his own hands.

He sends a four -page letter to Lenar's
board, charging the company with

malfeasance, what he calls dirty little
secrets.

And what is interesting is he says in
the letter to our directors that unless,

unless the company resolves these
matters to his satisfaction.

Very nebulous standard. To his
satisfaction, he's going to reveal these

little secrets to the public and to the
authorities.

This is a clear threat.

Lenar responds by suing Marsh for
extortion. And that leads Marsh to bring

the biggest gun he can find,

Barry Minko.

In December, Minco and Marsh entered
into an agreement.

Minco promises to launch an all -out
expose on Lenar that will have a

devastating impact on their stock.

The idea was that they would publish
false allegations against Lenar and

Lenar's business.

And the stock would crater and Lenar
would submit to Marsh's demands.

In early December, Mark approved the
plan, and in just one month's time,

allegedly exhaustive investigation of
Lenar is good to go.

He contacts agents he knows at the FBI,
and then he contacts reporters who trust

him, and also Wall Street analysts who
cover Lenar's stock.

Barry used those relationships to
promise a new story that would be coming

by 60 Minutes, an investigative news
program, that would reveal that these

allegations were both under
investigation and truthful.

Minko launches his attack on January
9th. He has a 30 -page report posted on

website named LenRon .com, equating
Lenar to the Enron scandal.

And he posts a video on YouTube.

Hi, I'm Barry Minko, the co -founder of
the Fraud Discovery Institute, and I'm

here to introduce our top ten red flags
for fraud at Lenar Corporation.

He gets the immediate reaction he is
looking for.

We've got to go to Diana Holick right
now with breaking news from Washington,

Diana. Well, that's right, Mark. Lenar
stock is moving lower today on an

Internet report from Barry Minko and the
Fraud Discovery Institute. I remember

it distinctly.

Woke up on January 9th of 2009 and my
daily routine, get ready for

work, I'm watching CNBC.

And part of the news is that there is
unusual movement in Lenar stock

attributable to a press release by Barry
Minkow. This catches

me completely by surprise.

With Lenar Corporation, we are forced.

to do what the victims may not have the
money left to do or the will, and that

is stand up to them and say, we know
fraud, and you're just fraud.

Almost immediately, Miller learns that
Minkow is acting as a spokesperson for

Nicholas Marsh, and he knows that this
is not about money anymore.

In terms of reputation, they say it
takes a lifetime to build a reputation

minute to lose one, and this was one of
those minutes where...

The rug of reputation was pulled out
from under us. It was incumbent on us to

act in a way to preserve all that we'd
built over all those years.

Homebuilder Lennar taking a big hit
today on allegations of fraud.

The allegations were absurd.

That Lennar is a financial crime in
progress, that it operates a Ponzi

I mean, Lennar has been in business for
over half a century, one of the leading

home builders in the nation, a public
company since the 70s.

So it made no sense.

The allegations that were made by Barry
Minkow were in many instances flat out

false or misleading.

For instance.

An allegation that the Federal Bureau of
Investigation was investigating that

Lennar was a Ponzi scheme may in fact
have been true.

However, he omitted to mention the fact
that the reason that the FBI was

investigating those allegations was
because he himself had made those

allegations. And many of the allegations
are a kind of wild conjecture.

Corporate fraud comes from an
environment of fraud at the highest

We found a very interesting transaction
with Mr. Jaffe, the chief operating

officer of Lenar Corporation.

One of the red flags that Barry put out
there was that supposedly I had

improperly obtained a loan for my
personal home.

And what we found, and that is contained
in our report, is that Mr. Jaffe got a

loan from a Mr. Venere, and Mr. Venere
is connected with Lenar and SunCal in

Kern County.

So he made up this story that makes no
sense at all.

that somehow money went from A to B and
B to C and then back to me through a

back door.

By late in the afternoon, there can be
no doubt that Minko's plot is working.

Trading volume in Lennar stock options
is more than 30 times what it is on a

normal day.

Finally, Miller tries to grab the
microphone away from Barry Minko and

finger at Nicholas Marsh.

We have subsequently filed litigation in
Florida against this litigant who has

been trying to extort money from the
company.

But he cannot stop the slide.

In that first day, in stock price alone,
I believe that what was lost was

approximately $350 million of
shareholder value.

These are innocent people who lost money
by being invested in Lenar Corporation.

And that was just the first day.

Minko keeps the blast up all week.

If you look at our stock activity
through the next days, I think all told,

somewhere around a half a billion
dollars of stock value was lost as a

response to the allegations made.

And what's in it for Barry Minko?

According to his agreement with Nicholas
Marsh, he stands to take in as much as

$2 million.

And Minko needs that money to fund the
biggest act of self -promotion one can

imagine. Up next, Minko goes Hollywood.

Your stock is worth over $100 million.

I'm done with you!

You don't have God.

I'll buy God.

Hear more stories about Z -Best Carpet
Cleaners Fraud at cnbcprime .com slash

americangreed.

Feeling greedy?

Want more than your share of behind -the
-scenes dirt? Follow us at

AmericanGreedTV on Twitter.

We'll be right back.

In 1987, Barry Minko makes a short video
about his success as a carpet cleaner.

Now,

more than 25 years later, he is trying
again to produce his own story.

This time, he is hoping for a
blockbuster.

You are hereby ordered to serve a term
of 25 years in jail.

It's a full -blown Hollywood production
starring famous actors like James Caan

and also starring Barry Minko.

It will cost several million dollars,
which may be a reason in 2009 Minko

Lenar Corporation to pay him to retract
his allegations against the company.

But he is in for a fight.

On January 9th, 2009, when he attacked
our reputation, we were never interested

in settling with him for one dollar.

It just wasn't going to happen.

But Minko and his partner, Nicholas
Marsh, try.

At one point, Lennar's attorney, Dan
Petruccelli, gets a call from Nick

attorney and suggests a meeting with
Minko.

You have this perfunctory meeting.

where you talk about the accusations, he
realizes the error of his ways, and he

then agrees to issue a retraction.

And when he issues the retraction, the
stock will go back up. I said, I see.

And what are we supposed to do in
return?

Well, you're supposed to give us money
and Lennar stock.

Lennar stock?

Really?

Accepting Lenar stock in exchange for a
retraction runs directly contrary to the

idea that Barry believed that Lenar was
a Ponzi scheme. No one would accept

stock in a corporation if they truly
believed that it was a fraud.

Petrocelli turns down the offer, and
Minkow tries to negotiate for himself.

Sometime in April, Barry Minkow reached
out to us to...

talk to us and have a discussion about
settling in some way or maybe recasting

what he was saying towards something
more truthful.

It is Easter weekend.

Pastor Minko is in Las Vegas shooting
his movie.

Lennar Chief Operating Officer John
Jaffe and Lennar's attorney Dan

meet him in his hotel room on Good
Friday to show him box loads of

that prove his allegations wrong.

His response was, oh, wow, I didn't know
that. Look at that.

Marsh never told me that. I didn't
realize that. After doing that, we sit

with him and he says, well, you know
what?

I'm ready to resolve this. I'm ready to
make a retraction.

All it's going to take is $1 million.

That's all. Just give me $1 million.

The next day, he gets an email from
Minkow.

He says he's sending it to me, not as
the Barry Minkow that's attacking us,

as the Barry Minkow who's a pastor. And
he apologizes for the personal.

And he's caused my family. The next day,
Easter Sunday, Dan Petruccelli gets a

phone call from Barry Minkow's attorney
saying, you know what?

You won't give us a million. How about
250?

We refer to that as the Easter discount.

Rejected again.

Minkow and Marsh get a new idea. As
headlines across the country announce

expansion of a U .S. government probe
into executives accused of dodging taxes

by putting money into offshore accounts.

He launched a release that suggested
that myself and John Jaffe, our chief

operating officer, had offshore bank
accounts.

He had no factual background, no factual
basis for making the allegation. And

John Jaffe and myself never had an
offshore bank account of any sort

in our lives.

But guess who does have secret bank
accounts?

That's right.

It's Barry Minko.

Right here at his own church, the
nationally renowned fraud fighter has

to his old tricks.

Forging documents so that he can
embezzle millions of dollars from people

trust him implicitly.

Mr. Minko fraudulently opened bank
accounts in the name of the church

anyone at the church knowing about it.

In all, he opens 12 secret accounts,
allowing Minko to take any check made

available to the church and use that
money for himself.

In some cases, Mr.

Minko would essentially steal the checks
right from the offering plate.

And so members of his church think they
are supporting the services the church

provides, but really funding Barry
Minko's movie.

The money got siphoned off in cash.

To pay for the set, to pay for the
actors, to pay for, you know, any number

these various things it takes to fund,
by yourself, a Hollywood movie.

In one poignant exchange, Minko
convinced his grieving husband to make a

,000 donation to a charity in Sudan in
memory of his late husband. But the

never makes it to Africa.

Barry Minko steals it.

It shows he actually has no compassion
for anyone.

It shows that he would steal money
absolutely from anyone in any situation

mind. Next on American Read, watch Barry
Minko self -destruct.

In any fraud case, you look for the lies
and you follow the money.

In the case of Lenar Corporation.

For months, press releases from Barry
Minko's Fraud Discovery Institute blast

the Lenar Corporation.

He claims they build with illegal
Chinese drywall. They don't pay their

Lenar answers every charge, offering
detailed reports on why the allegations

untrue. But Minko presses on. In March
2009, he checks in with the FBI agents

who received his report.

He reached out to those agents to try to
confirm that there was, in fact, an

investigation instigated by his report.

The FBI confirms its investigation, and
Minkow acknowledges that the information

they give him is non -public and that to
trade Lennar's stock with that

information would be illegal.

It would be insider trading.

And then, three days later, Minkow buys
150 contracts for options on Lennar

stock, betting the stock price will
fall.

He tried to conceal his trades by using
other people to open accounts and to

engage in trades.

But it was, in its end, Barry's...
egotism and his desire to control

the scheme that forced him to inject
himself into the transactions and expose

his direct participation in those
trades.

What Minko fails to remember is that
stockbrokers record phone conversations

with their client and his calls on the
deals are recorded.

He also didn't count on the tenacity of
the FBI agents looking into his story.

In any fraud case, you look for the lies
and you follow the money. And it's

following the money that led us to the
trading accounts.

There may have been others, but the
trade that is found from March 2009 is

enough to charge Minko with conspiracy
to commit securities fraud.

In 2011, he was called in for a
debriefing session with the Fed.

I believe the turning point.

During that session is one when we
revealed that there was a recording of

his having executed trades.

And at that point, they asked for a
recess. And it was after that that he

to plead guilty.

Minkow comes clean entirely, saying his
allegations against Lennar and its

executives are false.

Nothing more than an attempt to extort
money out of the company.

We didn't see it coming. We didn't know
it was happening. And moment in time,

the entire circumstance had turned
around.

From a years -long effort of listening
to accusations,

diligencing them, and then responding,
it was now over. It was game over.

Minko is sentenced to five years in
prison and ordered to pay Lenar

$580 million in restitution.

Nicholas Marsh is not charged
criminally. His tactic against Lenar

bundle.

Remember the original lawsuit he
brought, saying Lenar him millions?

Every one of Marsh's accusations was
found to be invalid.

And in fact, the...

The court determined that Marsh owed
Lenar lots of money.

And when Lenar's extortion case against
Marsh and Minkow goes to trial, a jury

awards compensatory and punitive damage
against Marsh in the stunning amount of

$1 billion.

Many ask, did the system work?

And I have to give kind of a two -sided
answer to that and say, on the one

hand, Barry Minkow's in jail.

Nick Marsh has a billion -dollar
judgment against him.

And that would seem like vindication.

But the road to get there is very bumpy
and very, very expensive.

In San Diego, at the Community Bible
Church, as members learn that Minko was

lying in his stunt against Lenar, they
look into the church's coffers.

That's when all the questions and all
the stories.

started to come out. You know, I gave
$75 ,000 for this. I gave this much

and it's not in my records, and it's not
in their records.

For one of Minko's congregants, who
prefers not to be identified, the news

Minko's wrongdoing is particularly
devastating.

She has loaned him her life savings.

I feel terrible. I feel embarrassed.

It's stupid of me to allow him to do
this to me.

Over many months, Minko positions
himself well in her life, counseling her

daughters in times of need.

I thought, helping my children, and he
was my pastor.

And as I always said, if you can't trust
your pastor, who can you trust?

And then he moves in with a need of his
own.

He came to me to borrow, I think first
it was $150 ,000.

He said he had stocks, but he was not
able to get them out at the time, so he

needed cash.

And this $150 ,000 was to go towards
finishing the movie.

A month later, he's back.

He wants $100 ,000, another loan.

I really truly believed that I would get
my money back. I mean, I'm not a

gambling person. Some people say, well,
you were investing.

I said, no, it was a loan.

But now Minko is headed to jail, and he
knows she will never see the money he

took from her.

I might lose my house. I was living
pretty comfortably before he came along,

he's devastated my financial security.

When the final accounting is done, it's
found that Minko embezzled $3 million

from the church over a 10 -year period.

He pleads guilty to bank, wire, and mail
fraud.

At Minko's sentencing hearing, victims
come forward to make sure the judge

understands the damage he has done.

He caused such a dissension.

Some people walked away from God, from
church, family.

Barry Minko is sentenced to five years
for the Lenar fraud, along with another

five years for the crime against his
church.

In his letter to the court, Minko writes
that his greed was not for money, but

for attention.

Perhaps it goes back to those early
interviews in the garage in Reseda where

16 -year -old boy discovers the thrill
of being in the spotlight.

And for the next 30 years, he was
director and star of The Barry Minko

long -running series of dirty deeds.

Next, two -timing temptress horses
around with city money. The total loss,

than $53 million.

Taking first place in U .S. fraud
history.

American Greed, Scams, Scoundrels, and
Suckers. Next, CNBC.

The fastest -growing cable network in
primetime.

CNBC.

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