Guilty Plea Adds Embezzling from Church to Convicted Scammer's OffensesThursday, January 23, 2014
Barry Minkow, the former convicted scammer who became a pastor of a San Diego church after serving time in prison, pleaded guilty to embezzling and defrauding that church of some $3 million, according to the U.S. Attorney’s Office.
As part his guilty plea before U.S. Magistrate William Gallo Jan. 22, Minkow admitted to multiple illegal actions while serving as pastor of San Diego Community Bible Church, including opening unauthorized bank accounts, forging signatures, using church funds for his personal benefit and charging unauthorized expenses on church credit cards, prosecutors said.
Court documents show Minkow’s embezzling took place over a decade. In addition to admitting fraud, Minkow pleaded guilty to failing to report $890,000 in income and $250,000 in owed taxes to the federal government.
In 1988 Minkow was convicted of running a Ponzi scheme related to his business ZZZZ Best Carpet Cleaning, a business that went public on the Nasdaq exchange. In that case, in which he bilked banks and investors of millions of dollars, he received a 25-year sentence, of which he served seven and a half years before he was released in 1995, prosecutors said.
In 1997, he became pastor of the San Diego Community Bible Church and soon after founded the Fraud Discovery Institute, a nonprofit that was aimed at detecting fraudulent business practices. His work was featured on the news show “60 Minutes.”
In 2009, through the institute, Minkow accused homebuilder Lennar of massive accounting irregularities and fraud, news that caused Lennar’s stock to crater, prosecutors said. Minkow personally profited from that by shorting Lennar’s stock, or borrowing shares on the presumption that the stock would fall.
Minkow pleaded guilty to conspiracy to commit securities fraud in March 2009 and was sentenced to five years in prison and ordered to repay Lennar $583.5 million. He is currently serving that sentence in federal prison in Kentucky.
As a result of his recent pleading, Minkow faces a maximum sentence of five years and a fine of up to $250,000. Sentencing is scheduled for April 7 in U.S. District Court in San Diego.