All fraudulent individuals have three aspects in common: the opportunity to commit a crime, the financial pressure to ignite thoughts to commit a crime, and the rationalization to make a crime seem less ethically incorrect than it really is to commit (Will et al). Barry Minkow, after gaining high power and praise in the market by reporters and Oprah Winfrey herself, had all three of these aspects allowing him to commit his fraudulent white collar crime worth more than $200 million on paper (Ciulla). When Minkow was 16, he started his own carpet cleaning business in his parents’ garage under the name of ZZZZ Best (Ciulla). People viewed Minkow as a prosperous young entrepreneur, but they didn’t know that his carpet cleaning business was all
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Just out of high school, Minkow made his carpet cleaning company look profitable by stealing money in every way possible (Investopedia). He prepared burglaries to obtain money for insurance, he borrowed $2,000 from his grandmother and then stole her pearls, and when he wanted physical cash, he would forge money orders of around $13,000 from a local liquor shop (Ciulla). All of these actions made Minkow’s company look profitable when it really was not having any business at all. In 1985, Minkow extended his stealing by opening a fake merchant’s account in a local bank giving him the ability to accept payments through credit cards (Ciulla). For the following years after this action, whenever he needed money, he would create a phony charge on a customer’s credit card and take their cash from the bank for himself …show more content…
Minkow used this fake business to create documents to authorize ZZZZ Best’s work in refurbishing water and fire damage for buildings (Investopedia). This appraisal company also forged documents to make it seem that he had obtained large contracts from insurance companies in the restoration of buildings for fire and water damage (Ciulla). This fraudulent forgery of documents convinced bankers and investors that his ZZZZ Best carpet cleaning business was a profitable and successful business to take interest in (Ciulla). Auditors were misled by Minkow with his fake documents correlating them to be from independent third parties (Investopedia). Also, when the CPA firm asked to see the building refurbishing customer site, Minkow and his associates rented a building temporarily and created a fake customer job site (Investopedia). With all of Minkow’s fake profits, ZZZZ Best made it onto Wall Street in December 1986 (Ciulla). In March of the next year, Minkow’s shares were $64 million and later raised to $110 million the month after (Ciulla). However, a year later, Minkow’s credit card fraud became evident leading to his downfall and conviction of 57 counts of fraud and 25 years in prison (Ciulla). Once Minkow’s scheme was discovered, investors had already lost over $100 million dollars’
Just out of high school, Minkow made his carpet cleaning company look profitable by stealing money in every way possible (Investopedia). He prepared burglaries to obtain money for insurance, he borrowed $2,000 from his grandmother and then stole her pearls, and when he wanted physical cash, he would forge money orders of around $13,000 from a local liquor shop (Ciulla). All of these actions made Minkow’s company look profitable when it really was not having any business at all. In 1985, Minkow extended his stealing by opening a fake merchant’s account in a local bank giving him the ability to accept payments through credit cards (Ciulla). For the following years after this action, whenever he needed money, he would create a phony charge on a customer’s credit card and take their cash from the bank for himself …show more content…
Minkow used this fake business to create documents to authorize ZZZZ Best’s work in refurbishing water and fire damage for buildings (Investopedia). This appraisal company also forged documents to make it seem that he had obtained large contracts from insurance companies in the restoration of buildings for fire and water damage (Ciulla). This fraudulent forgery of documents convinced bankers and investors that his ZZZZ Best carpet cleaning business was a profitable and successful business to take interest in (Ciulla). Auditors were misled by Minkow with his fake documents correlating them to be from independent third parties (Investopedia). Also, when the CPA firm asked to see the building refurbishing customer site, Minkow and his associates rented a building temporarily and created a fake customer job site (Investopedia). With all of Minkow’s fake profits, ZZZZ Best made it onto Wall Street in December 1986 (Ciulla). In March of the next year, Minkow’s shares were $64 million and later raised to $110 million the month after (Ciulla). However, a year later, Minkow’s credit card fraud became evident leading to his downfall and conviction of 57 counts of fraud and 25 years in prison (Ciulla). Once Minkow’s scheme was discovered, investors had already lost over $100 million dollars’