Barry Minkow, San Diego's most publicized man of the cloth, was sentenced today (April 28) to five years in prison for embezzling more than $3 million from parishioners of San Diego Community Bible Church. He is already serving a five-year sentence for securities fraud for his fraudulent attempt to knock down the stock of Lennar, the big builder. At the conclusion of that case, he was defrocked by the local church, which began an investigation of his thievery.
Minkow's story is one of the most bizarre of recent cozener history. In 1988, he was sentenced to 25 years in prison for running a complex Ponzi scheme as head of ZZZZ Best carpet cleaning. Almost all the company's revenue was fabricated. He only served seven and a half years because he supposedly found God — giving birth to the cynical aphorism, "born again until out again."
He became pastor of San Diego Community Bible Church. At the same time, he was running Fraud Discovery Institute and giving seminars in fraud detection for federal government agencies.
For Fraud Discovery Institute, he would expose a company's wrongdoing and then cash in by shorting (betting on a decline in) the stock. It was legal, because he disclosed his short position. He did some excellent research, such as exposing multi-level marketing companies Herbalife and Usana, which had ties to offshore tax havens.But when he tried to nail Lennar, he crossed the line and went back to prison. He served that time in a prison medical center, as a result of addiction problems for which he blamed his behavior.
In fleecing parishioners of his church, he talked a widower into making a $75,000 donation to a hospital in Sudan in honor of his late wife. But there was no hospital; Minkow pocketed the money. He admitted to stealing $300,000 from a widowed grandmother trying to raise her teenage grandmother. He did not report to the Internal Revenue Service the $3 million he stole from parishioners.