More than 20 years ago, in 1988, Minkow pled guilty to running a Ponzi Scheme in connection with his carpet-cleaning business ZZZZ Best.
After being released from prison in 1995, Minkow reinvented himself by becoming a pastor and founding the Fraud Discovery Institute, which is a non-profit entity which fought to uncover financial fraud. Minkow has been profiled on 60 Minutes and was applauded for his work in a series of articles in the Wall Street Journal in 2008 which uncovered inflated credentials by corporate executives.
Despite all of his self-promoting and “anti-fraud” hype, Minkow is set to face some additional prison time for his second fraud.
Here are a couple of important lessons to learn from Minkow:
￼A Tiger Doesn’t Change its Stripes
Making a blanket statement about all criminal offenders is a mistake, but it’s certainly a reason to be more cautious in your business dealings.
￼Beware of Repeat Offenders
Minkow is not the first, and certainly not the last repeat offender.
Another “reformed” fraudster, Barry Wenbe, who was convicted for embezzling on two different occasions, said in an interview with the Association of Certified Fraud Examiners, “If you put me in a position of trust again…chances are I’m going to violate that trust.”
The Association of Certified Fraud Examiners pointed out two other “reformed” fraudsters who also broke that trust by committing multiple frauds: Kenneth Kemp and Steve Comisair.
￼If you do any sort of “background check” make sure you check criminal record history
Minkow was open about his criminal history, but that doesn’t mean everyone else will be and it certainly doesn’t mean you should take what people say at face value.
You can go the do-it-yourself route and do a fake background check, but people can and will do anything to escape from their criminal past…something that “Googling” will not find.
What do you think? Would you do business with a “reformed” fraudster? Let us know in the comments.