Barry Minkow and The White Don King
Tired of your dead-end job? Why not become a convicted fraud felon and sell your secrets to the FBI!
Seriously. Meet Barry Minkow at his FDI site. (Yes, FDI, not FBI.)
Here’s a guy who once went to prison for schlepping hundreds of millions of dollars from consumers in the 1980s. He even once bunked with a convicted murderer, and his biography claims that he spent seven years in prison among many of the “nation’s leading white-collar criminals.”
Apparently, they taught him how to play the PR game to the hilt. It seems these days that most people convicted of some sort of crime tend to find God or some religion when all else fails. Folgers Coffee drinkers – take heed – you’ve got competition with Insta-Religion and Insta-Credibility poured in for good measure.
As always, to best perpetuate fraud, it requires that you establish some form of credibility with your victim. I don’t know Minkow, but his FDI website looks conspicuously like the FBI in terms of acronyms. It does sound a bit misleading. I imagine the fun I’d have if I worked at the FDI:
“FREEZE!! YOU’RE UNDER INVESTIGATION BY THE FDI!!”“Wha- the… ?”“Nah, man! Just joking with you! I said FDI! Not FBI! Didn’t you catch that?”
“Uhh-”
“You ok? Buddy, you ain’t looking too good. You need a what? A heart – oh, a heart attack? You’re having a heart attack? What’s the name of your church? I’ll investigate them! Don’t worry, if you die, I’ll be sure to investigate the hell outta them! Here’s my card. Praise Jesus.”
I read a bit more into the FDI website and found that Minkow thrives on killing Christian churches, even though he leads his own church. Wow! Talk about eliminating competition! Minkow has got it down pat! Jailhouse rules seem to apply to Minkow: to survive, one must eliminate the competition. Included is a “frauds gone wild” video segment on the FDI website. Imagine half-naked, barely legal girls dancing and frolicking for accountants during tax season.
The Wall Street Journal recently reported his latest target is a vitamin supplement distributor, Usana Health Sciences. Reading his responses to Usana’s defamation lawsuit had me wondering what Minkow does for a hobby. The whole website, as I mentioned previously, is one giant Minkow self-promotional blog – even if it’s hidden under the pretenses of being some institute of fraud – and I find the whole Usana vs. Minkow to be less about consumers and more about Minkow.
The odd thing Minkow does in his press release is try to laugh at Usana for picking a personal fight. The guy had to know that Usana (or anyone) Minkow went after would first point out the fact that Minkow is a fraudulent convict, and still hasn’t repaid his restitution. He claims it doesn’t matter, because the crux of the issue is that he found fraud at Usana and even offers his prison ID number, and I can’t help but wonder if Minkow is feeling nostalgic about his time in prison. Maybe he wants to go back and bunk with his buddy, the convicted murderer?
Except it does matter. To not find fraud would represent the loss of untold man-hours and money spent poring over financial documents, hiring CPA’s and other accounting people to find “clues”. It would also represent the loss of potential income for Minkow and the mirage that is known as FDI.
In simple terms: no fraud is equitable to no money. To find fraud would mean to create a huge windfall, especially for consulting fees, such as Minkow utilizes with the FBI. But what happens when no fraud is found and bills must be paid, such as massive restitution fees?
Create fraud, or at least the appearance of it! Supposing that, ultimately, no fraud is found on the part of Usana, and the defamation suit presses forth and Usana wins, then Minkow will lose much of his credibility and ability to demand exorbitant consulting fees. That would be an unacceptable option for a man as deeply in debt as Minkow. If you create the appearance of fraud, you’ve got some time to sell yourself as an expert and demand higher fees for consultations. Plus, if at a later date, someone within Usana became convicted of fraud – even if Minkow had nothing to do with it – then kudos could be heaped upon Minkow simply for throwing the word “fraud” at Usana officials.
In short, Minkow has only two options: to find fraud or create it. It’s that simple. Additionally, the court papers filed by Usana suggest that Minkow rushed in his haste to financial glory. I don’t know. Something sounds fishy. I’m still drawn back to his FDI website and I chuckled to myself because of the acronymic similarity to FBI. Then I remember something I read somewhere a long time ago, “the best lies always have a figment of truth to them.” I’m not saying Minkow is a liar, but much of the FDI website offers generalities and few specifics. He could quite possibly be deceiving people because he claims to have never missed a restitution payment, but fails to mention if he always paid $5,000 a month or just $50 per month. Either way, it’s ambiguous at best, and misleading or downright fraudulent at worst.
Moreover, the idea of private fraud “discovery” organizations existing solely on the premise of offering consultations and investigations seems unethical in this case. It seems unethical because Minkow is obviously money-driven, and as people know, money is rarely a good motivator for ethical conduct.
Who’s to know if Minkow is motivated entirely by greed? Suppose he wants to be rid of the restitution fees that he still owes, even to one victim? What if he needs more money because he wants a bigger house? Relying on Medicare-addicted, 98-year-old Granny, who feels cheated because her prayers weren’t answered at her church and hired Minkow to investigate her unanswered prayers seems counterproductive and hardly represents any opportunity to garner any significant fees for Minkow. Maybe there is a reason why he’s an expert at elderly fraud.
Relying on elderly people to fund his crusades is not a proper theory; in fact the contending theory is that Minkow wants fame and fortune now. You do realize that it’s been 20 years since Minkow was caught stealing people’s money, and maybe that’s what it is: Minkow wants to celebrate the once-good-lifestyle he had. The best way to do that? Make a huge splash in the media. So far, so good.
Still, the best part about Minkow’s deal is that he’s not even licensed to be a fraud investigator, even though FDI itself is a licensed investigator. If anything, that sounds fishy to me. Who needs licensing when the organization can be licensed? I should ask certain people back home about licensing and how organizational licensing seems to defeat the whole premise of licensing individuals.
I don’t want to go to prison. I don’t want to be somebody’s bitch in prison – especially a convicted murderer’s. I think I’ll take a page out of Minkow’s book and tell people that I’ve been to prison before (but of course, I’ll omit the fact that I went for a college class field trip) and that I’m a born-again Christian (I was once, but am now an atheist), and create an organization called Fight Back Institute (FBI) and be paid exorbitant fees so I can live the good life.
I’m giving up my MBA degree. I don’t need any stinking degrees anymore. I’ll claim fraud within any organization and hope that soon, someone will be accused of fraud and then be convicted and then I can claim that I did it all and that it was my expertise that started the chain-reaction and that I’ll be writing a book shortly afterward – and that I’ll be training more idiots on fraud prevention, and converting all that publicity into money so I can live lavishly, because … well … I can. Just like Minkow.
I don’t know if Barry Minkow is still a fraud these days. The FDI website looks a bit shady, if nothing else, because it’s entirely self-promotional and all about Barry Minkow. I’m even surprised that Minkow himself doesn’t refer himself in the third person. And the fact that the FDI contains the “FRAUDS GONE WILD!” videos suggests that Minkow is more about sensationalism and material greed than the ethical, honest and integrity-driven pursuit of the truth.
Fraud or not, Barry Minkow sure knows how to fool people. And, he knows how to milk PR for every cent its worth, too. Whether he’s misleading people or simply pursuing the truth, his track record reminds me of an old proverb:
Fool me once, shame on you.
Fool me twice, shame on me.
Whatever happened to Don King, anyway?
This is an excellent article on Barry Minkow. He is probably desperate for money but also glory and fame.
I wonder why so much of his website is focused on USANA? He claims that he was paid to investigate USANA, but refuses to name his client. We all know that Network Marketing (MLM) still has the perception from some people of being an “illegal” pyramid scheme. The government has accepted this form of free enterprise as a legitimate trade practice. It is now taught at some universities, such as the University of Illinois, by Professor Charles King and Tim Sales. Because it’s misunderstood, it’s feared. This was the case with franchising in the 1960′s and almost illegalized.
Why did Minkow choose USANA? He could have aimed at any other company with similar compensation plans, lesser reputation and/or questionable business practices. USANA has accolades and third party references coming out of their ying yang! It leads one to believe that there is some sort of hidden agenda. Could it be a competitor that was tired of seeing USANA’s 18 straight quarters of higher then expected growth, a person who wanted to see USANA’s stock drop, so they could buy low and reap the benefits of a USANA rebound, a lazy past associate who was upset that the pennies were not falling from heaven after their sign up or disgruntled ex-employee….who knows?
But by all accounts Minkow’s ship is starting to smell more and more like a #$%^house door on a tuna boat. And the interested writers are starting to tire of the recycled “crap” he is feeding them.
All aboard or abandoned ship? You decide.
Klaus ..
A bit like OJ Simpson, yes?
“Desperate people do desperate things.”
Minkow’s just a fraud in my humble opinion. It was fairly obvious from the start that he was motivated to make his money becoming a savior of his own stupidity.
Anyway, looks like USANA will come out smelling like roses, while Minkow may one day find himself stealing Bibles from a church that were once his.
Thanks for the comment on BlogCritics.org, too.
Paotie
Hi Paotie, I enjoy open dialogue and appreciate balanced perception and rebuttal. This hopefully helps one become educated about issues that may affect the livelihoods of others. I have come to enjoy and appreciate your blog. I am also happy to see that you are open to freedom of expression as long as it’s not done in a distasteful manner. However, like watching a driver move at 75mph in a school zone, it can be difficult and challenging to control your emotions.
Tracy Coenen’s, Sequence Inc. also is a little bit Minkowish, in that she seems to delight in attacking companies with “perceived fraud”. What I find amazing, is that these people will go out with all horns a blazing and feed the press and anyone else who will listen about their new “Discovery”. They enjoy playing the role of prosecutor, judge and jury with the press before anyone else, especially the accused, has had an opportunity to respond to the allegations. You would never see an official government agency do that unless there was serious enough evidence to prove criminal wrong doing. Usually the accused are already charged at that point.
Tracy Coenen has a blog that has an “it’s all about me” persona, with so much arrogance. The blog is hardly open to freedom of speech, which is really what a blog should be; otherwise it becomes kind of bland and boring. As a chef, it would be like preparing, serving and eating roast beef and Yorkshire pudding for breakfast lunch and dinner every day of the week. No excitement and always one sided.
I saw a news show about a woman and man who lost their child at John Hopkins Hospital. They sued and won a huge settlement. She had every right to be angry at the hospital for the negligence. She could have taken that settlement and moved on, have another child and lived very well. But instead of doing that, she went back to them and said I want to work with you and make this hospital better. I will take my settlement and help make this a better and more compassionate hospital. What a noble and beautiful gesture of peace. This is obviously something tragic that turned into a wonderful legacy for their child. Something really good came of a tragedy.
The point I’m making is why Minkow ET all couldn’t have approached USANA about their perceived shortcomings. Instead of trying to maim and kill a company that overall has great products, employees (USANA employees around 1000 people), enthusiastic associates and preferred customers. Could Minkow have said “I want to help make USANA Health Sciences a better company?
What benefit does Minkow stand to gain putting a 1000 people out of work, destroying many of the hard working associates businesses and cutting off the supply of superior nutritionals’ that many people depend on? To me it makes no sense and from a humane perspective, very cruel and somewhat warped. It’s in the approach I find appalling. Minkow has not learned from his past and he’s gathering like minded people to his nest. It’s kind of scary and creepy. My daughter would say…”I’m not having him over to my place for dinner Dadda”. Children can be a great judge of character.
When this report first broke in March 2007 I thought there was a hidden agenda. Later I found out about the short selling of stocks but I told a few friends that I thought Minkow was trying to shutdown USANA because their product works and the pharmaceutical companies are scared. We’ll find out more later this year when Minkow has to report to the court who is supporting his agenda or face contempt of court charges.
Well Sly, it’s starting to happen. USANA won the first round and its not looking good for Minkow. See reply post below from Rob Last (BlogCritics.org).
#157 — October 13, 2007 @ 21:42PM — Rob Last
I like Paotie’s article “Barry Minkow and The White Don King”. It’s turning to be quite prophetic. The following has been posted elsewhere and is very interesting. Read on.
The court proceedings have hardly started but Barry Minkow, convicted fraud felon, has already managed to get himself in trouble during his latest encounter with the legal system.
Barry has just been ordered to pay $$$ THOUSANDS to repay ALL the fees and costs incurred by the Usana legal council in the prosecution of the motion to compel. The detailed statement of costs is available to view in the court records.
Not only Usana was recently awarded expedited discovery in spite of all of Minkow’s attempts to avoid it, in the short period of a few weeks Minkow managed to get himself sanctioned for UNRESPONSIVE, EVASIVE RESPONSES and failing to make all the required disclosures as ordered by the court. Now Barry has to answer all Usana’s interrogatories, produce all requested documents and also pay big bucks for trying to play cat and mouse game with the law. It looks like Barry has not learnt anything from his disgraceful past.
Paotie,
What was the name of the church Minkow “killed”?
Paotie,
I believe I might have punched in an incorrect e-mail addres last time I posted. I’m still interested in knowing the name of the church Minkow “killed?” If you could reply to this comment to ensure I get your answer I’d appreciate it.
Jon ..
It’s a figure of speech.
Paotie
I understand it’s a figure of speech, but what I’m wondering about what situation you are referring to.
Jon ..
Is there something you’re not understanding? Why don’t you tell us what you don’t understand instead and perhaps we can see if a meeting of the minds can be made.
Paotie
Paotie,
You wrote in your blog
“I read a bit more into the FDI website and found that Minkow thrives on killing Christian churches, even though he leads his own church. Wow! Talk about eliminating competition!”
I’m asking you what it was you read that caused you to find this figure of speech appropriate. What Christian church has Minkow negatively attacked/slandered etc which would make this figure of speech appropriate?
Jon ..
At the time I wrote the article, Minkow’s web site promoted anti-fraud efforts against certain churches. Since then, Minkow has become focused almost exclusively on USANA, as his site shows now.
If you want to engage in an intellectual conversation about Minkow, I suggest you to go BlogCritics.org and look up my article – there, you will find an ongoing and lively debate – which I do not participate in anymore. I’ve moved on.
You can join the debate at BlogCritics.
Have fun!
Paotie