ZZZZ Best

ZZZZ Best

A company established in the 1980s that engaged in massive fraud. Originally a carpet cleaning company, it later began insurance restoration services. It went public in 1996 and eventually acquired a market capitalization of more than $100 million. Unfortunately, much of that was stolen or simply fabricated. In addition to engaging in aggressive accounting, ZZZZ Best's CEO, Barry Minkow, borrowed from organized crime groups and lied to shareholders about insurance contracts that did not exist. Minkow was eventually convicted and sent to federal prison.
References in periodicals archive ?
Shares in ZZZZ Best, an industrial rug cleaning firm, exploded in value, creating a company with a stock valuation of $200 million.
In the 1980s, accounting transgressions such as ZZZZ Best and Crazy Eddie, among a number of others, led to the formation of the Treadway Commission and eventually a compilation of internal control processes under the auspices of the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Even though WorldCom represented an $11 billion fraud, the exact same kinds of techniques are used all the time in small companies (e.g., ZZZZ Best Carpet Cleaning).
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.
For example, in the ZZZZ Best fraud, the auditors accepted the client's representation that a $7.2 million insurance job would require 300,000 square feet of carpet to restore the top four floors of the Capitol Bank Building in Sacramento.
He incorporated the operation and called it ZZZZ Best, as in "ze best." Within 5 years, by the age of 21, Minkow had built his company into one of the largest independent carpet cleaning and restoration businesses in the country, with profits escalating at a rate of 400 percent per year.
His company, ZZZZ Best Carpet Cleaning, once valued at over $350 million dollars, was ultimately sold for less than $60,000.
Recently we have witnessed a staggering number of fraudulent financial reporting cases, including ZZZZ Best, Phar Mot, Miniscribe, and numerous savings and loans.
Heck, just look at ZZZZ Best, I've made a fortune on GE, then turned around and got my clock cleaned shorting GTE.
Later that same year, in September of 1989, NASAA issued to the House of Representatives' Subcommittee on Telecommunications and Finance "The NASAA Report on Fraud and Abuse in the Penny Stock Industry." That report warned against blank-check blind pools and noted that ZZZZ Best, in which banks and investors lost about $70 million in a massive stock fraud scheme, went public in 1986 through a merger with a Utah blank-check blind pool.
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.
After all, there were cases such as Mattel, Inc., ZZZZ Best Company, Inc., the PTL Club (significant in the 1990 demise of Laventhol and Co., then the seventh-largest CPA firm), Fund of Funds, Ltd., Regina Company, Inc., and Crazy Eddie, Inc.