A historical look at massive fraud cases supports Kranacher's latter point: Barry Minkow
of ZZZZ Best infamy, Ivan Boesky, WorldCom's Bernard Ebbers and the Rigas family in Adelphia the list goes on.
A number of years ago, I videotaped an interview with legendary fraudster Barry Minkow
while he was serving an eight-year sentence in a federal prison in Colorado.
The call came in for Barry Minkow
, the onetime San Fernando Valley whiz-kid con artist who'd just served 7 1/2 years for bilking investors out of $26 million in the notorious ZZZZ Best carpet cleaning company fraud.
, an entrepreneur, fully understood the laws of supply and demand.
For those of you who don't remember, Barry Minkow
was once known as the "Wonder Boy of Wall Street.
For example, Barry Minkow
, ZZZZ Best's president, spent $2 million to lease an entire building in downtown San Diego and another $2 million to hire an army of construction workers to refurbish the inside of the building to make it look like a legitimate restoration project when the auditors insisted on visiting the site.
Another bizarre and widely publicized business flame-out with its share of screwy accounting was ZZZZ Best, the carpet and furniture cleaning enterprise hatched by a wily Los Angeles teenager named Barry Minkow
Today convicted felon Barry Minkow
, acting as an agent for a disgruntled litigant, Nicolas Marsch III, posted false and inflammatory accusations concerning Lennar.
Just recall ZZZZ Best, the carpet cleaning company whose founder, Barry Minkow
, was the quintessential young entrepreneur of the 1980s - until it was discovered that his success was built on pyramid schemes and false sales.
Upon further investigation by FDI founder Barry Minkow
, the Fraud Discovery Institute became convinced that Herbalife employs systematic internal controls, including the use of outside, independent laboratory testing, which ensures their products are manufactured safely and in compliance with California law.
Two hours earlier, I had recorded the story of the legendary Barry Minkow
, the "boy wonder" who, in the mid-1980s, had conned his investors and auditors in a $100 million financial-statement fraud scheme.
Consider the following example: In the 1980s, Barry Minkow
, CEO of ZZZZ Best Carpet Cleaning, reported $50 million of revenue, 86 percent of which was fake and no one caught it.