In 1982, in California, a 15-year-old boy Barry Minkow organized a carpet cleaning company called ZZZZ Best. The young man became a millionaire through a significant fraud, for which he was later sentenced to a lengthy prison term (Partridge, 2019). Minkow started his business in his father’s garage, but at first, his business went severely, as banks did not allow an underage boy to open accounts. In addition, the services provided by the company were of a reasonably low level. Minkow tried to draw attention to ZZZZ Best by all available means. Changing his voice, he called the television and, introducing himself as a company client, enthusiastically told about a teenager who opened a carpet cleaning business. TV channels wanted to cover this story, and the company appeared in several television stories. There were more customers, but that was not enough for Barry.
In an attempt to get more money, Minkow engaged in a significant fraud. He staged the robbery of ZZZZ Best and received compensation from the insurance company. He did the same scheme several more times. Since the contributions were substantial, several such scams allowed the entrepreneur to expand the ZZZZ Best network, hire new employees, and move out of his father’s garage. Despite many scams, the entrepreneur remained unpunished, and, perhaps, this prompted him to cheat more. Minkow began to take loans from banks, positioning ZZZZ Best as a company that performs contracts with insurance companies.
In Barry Minkow’s biography, each subsequent stage was associated with more severe fraud. The entrepreneur still lacked funds, and he borrowed large sums of money from criminals who had previously been convicted of fraud or forgery of papers. Minkow spent these loans to enter the IPO, which made him a young multimillionaire (Partridge, 2019). Despite this, the young man’s success collapsed as quickly as it came. People who had previously used the company’s services began to collect collective complaints that the company was withdrawing much more significant amounts of money from their cards than it should have. These complaints had a considerable impact on the fall in the prices of ZZZZ Best shares. Journalists investigated fraud, and later Minkow and some of his employees were convicted of several offenses.
Later, the entrepreneur was sentenced to twenty-five years in prison, as he was accused of many fraudulent incidents. He was released early enough for positive behavior in prison. After his release, one of his acquaintances asked him to familiarize himself with several documents for a company that, as it turned out, was a pyramid scheme. This gave Minkow new thoughts about fraud. Being caught cheating again, Minkow was sentenced to 5 years in prison (Partridge, 2019). In the end, he was obliged to pay all the deceived people a large sum of money, which the entrepreneur does not dare to do.
The main reason for fraud, in this case, is the desire of a young man to have his earnings. Later, when a certain amount of money, in his opinion, was reached, he could not stop and began to wish for more. He started his work and fraud at a young age, which characterizes him as a person who is very eager to get a significant income by any means. Currently, Barry Minkow has become one of the youngest millionaires in the history of the United States.
It was almost impossible to protect from fraud in this case. People who ordered carpet cleaning could not expect that large amounts of money would be withdrawn from their card, that is, much larger than they expected. Still, some of them could based on reviews, not pay this company with cards. The situation is more complicated with credit companies that provided large cash loans to Minkow’s company. In their case, they saw a favorable borrower and trusted giving a loan to the company.
I chose this case because the fraud that was committed by Barry Minkow is a relatively common type of deception by people. I want people to get acquainted with this situation in detail and be wary of problems of this kind. Minkow is a recidivist fraudster, aiming to expect new types of crimes and offenses from him after he gets out of prison again. Many people and large enterprises suffer from his criminal acts, and therefore I would like his fraud to receive wider publicity.
In conclusion, the Barry Minkow case is an example of an actual fraud that affected many people and companies. Minkow not only did not improve while serving a prison sentence but repeatedly committed many fraudulent actions with citizens’ finances. In this regard, I would like states to subject the activities of organizations to more thorough checks and controls so that people who honestly earn money do not become victims of fraudsters. After all, often after scammers have been caught and sent to prison, they no longer have the opportunity to pay off all debts, which can be a big problem for people who have earned their money and planned other expenses.
Reference
Partridge, M. (2019). Great frauds in history: ZZZZ Best. Money Week. Web.