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ZZZZ Best Bubble of All
The saga of ZZZZ Best is an incredible Horatio Alger
story that captivated investors. In the fast-paced world of
entrepreneurs who strike it rich before they can shave, Barry
Minkow was a genuine legend of the 1980s. Minkow’s career
began at age nine. His family could not afford a babysitter, so
Barry often went to work at the carpet-cleaning shop
managed by his mother. There he began soliciting jobs by
phone. By age ten he was actually cleaning carpets. Working
evenings and summers, he saved $6,000 within the next four
years, and by age fifteen bought some steam-cleaning
equipment and started his own carpet-cleaning business in the
family’s garage. The company was called ZZZZ Best
(pronounced “zeee best”). Still in high school and too young
to drive, Minkow hired a crew to pick up and clean carpets
while he sat in class fretting over each week’s payroll. With
Minkow working a punishing schedule, the business
flourished. He was proud of the fact that he hired his father
and mother to work for the business. By age eighteen,
Minkow was a millionaire.
Minkow’s insatiable appetite for work extended to self-
promotion. He drove a red Ferrari and lived in a lavish home
with a large pool, which had a big black Z painted on the
bottom. He wrote a book entitled
Making It in Americ
a in
which he claimed that teenagers didn’t work hard enough. He
gave generously to charities and appeared on antidrug
commercials with the slogan “My act is clean, how’s yours?”
By this time, ZZZZ Best had 1,300 employees and locations
throughout California as well as in Arizona and Nevada.
Was more than 100 times earnings too much to pay for a
mundane carpet-cleaning company? Of course not, when the
company was run by a spectacularly successful businessman,
who could also show his toughness. Minkow’s favorite line
to his employees was “My way or the highway.” And he
once boasted that he would fire his own mother if she
stepped out of line. When Minkow told Wall Street that his
company was better run than IBM and that it was destined
to become “the General Motors of carpet cleaning,” investors
listened raptly. As one security analyst told me, “This one
can’t miss.”
In 1987, Minkow’s bubble burst with shocking
suddenness. It turned out that ZZZZ Best was cleaning more
than carpets—it was also laundering money for the mob.
ZZZZ Best was accused of acting as a front for organized-
crime figures who would buy equipment for the company
with “dirty” money and replace their investment with “clean”
cash skimmed from the proceeds of ZZZZ Best’s legitimate
carpet-cleaning business. The spectacular growth of the
company was produced with fictitious contracts, phony
credit card charges, and the like. The operation was a giant
Ponzi scheme in which money was recycled from one set of
investors to pay off another. Minkow was also charged with
skimming millions from the company treasury for his own
personal use. Minkow and all the investors in ZZZZ Best
were in wall-to-wall trouble.
The next chapter of the story (after Chapter Eleven)
occurred in 1989 when Minkow, then twenty-three, was
convicted of fifty-seven counts of fraud, sentenced to
twenty-five years in prison, and required to make restitution
of $26 million he was accused of stealing from the company.
The U.S. district judge, in rejecting pleas for leniency, told
Minkow, “You are dangerous because you have this gift of
gab, this ability to communicate.” The judge added, “You
don’t have a conscience.”
But the story does not end there. Minkow spent fifty-four
months in Lompoc Federal Prison, where he became a born-
again
Christian,
earning
bachelor’s
and
master’s
correspondence school degrees from Liberty University,
founded by Jerry Falwell. After his release in December
1994, he became senior pastor at Community Bible Church in
California, where he held his congregation in rapt attention
with his evangelical style. He also has become a one-man
media conglomerate, using his unique skills as a communicator
to speak out on how he got away with committing fraud. He
has written several books, including
Cleaning Up and Down,
But Not Out
, has conducted a daily nationally syndicated
radio program, and uses his charismatic skills as a much-in-
demand lecturer. He has also been hired as a special adviser
for the FBI on how to spot fraud. In 2006, Minkow’s
prosecutor, James Asperger, wrote, “Barry has made a
remarkable turnaround—both in his personal life and in
uncovering more fraud than he ever perpetrated.” In 2010, the
movie
Minkow
was released. It was billed as “a powerful tale
of redemption and inspiration.”
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