SAN DIEGO (AP) — A former pastor and notorious con man was
sentenced to five years in federal prison Monday for stealing $3.5
million from his San Diego church and its members, a tale of betrayal
that a judge said made the three-time felon one of the worst
white-collar criminals.
Barry Minkow, 48, was ordered to do the
time after completing a sentence for an unrelated scam that cost
homebuilder Lennar Corp. some $580 million in lost stock value.
Minkow
was a famous millionaire as a teenager in the 1980s for founding the
ZZZZ Best carpet cleaning company, which became embroiled in a $100
million fraud. He went to prison, was released in 1995 and two years
later became pastor of San Diego Community Bible Church.
Minkow
"used every mechanism available to steal money" from the church from
2001 to 2011, taking more than $1.3 million in donation checks, forging
signatures on checks and taking out unauthorized loans in the church’s
name, prosecutors said. The courtroom was full of current and former
church members, some sharing emotional stories with the judge as Minkow
stared ahead and turned his chair occasionally to whisper to his
attorney.
Minkow stole $1.7 million and obtained $1.9 million in
loans that are unlikely to be repaid, prosecutors said. Patricia Kuebitz
said she lent Minkow nearly $300,000, drawing on her inheritance and a
home equity line, and is now deeply in debt and fearful of losing her
home as she raises a 15-year-old granddaughter.
"My trust in all people has been shaken," Kuebitz told the judge.
Brett
Wright, whose daughter was married by Minkow, said his former pastor
stole a $75,000 donation that was intended to build a hospital in
Darfur, Sudan. He made the donation in honor of his wife, who died of
cancer.
"I feel sorry for you, Barry," Wright said, turning to Minkow as he walked away from the
podium.
Minkow
avoided eye contact with his former congregants and could barely be
heard in court when he declined U.S. District Judge Michael Anello’s
invitation to speak. In a two-page, handwritten letter to the judge, he
apologized and asked for leniency to reunite with his wife and
11-year-old twin boys.
"There is not a day that goes by that I
don’t regret the damage I have caused my former church," Minkow wrote.
"The only people that were hurt worse than the church by my actions was
my own family."
Minkow’s attorney, Mark Adams, recommended a
prison sentence of 41 months to account for helping federal
investigators uncover other frauds and for his behavior in federal
prison, which includes completing a doctorate degree in conflict
resolution and counseling other inmates on returning to civilian life.
Several inmates in Lexington, Ky., wrote the judge about how Minkow
inspired and encouraged them.
The judge agreed with prosecutors
that Minkow deserved the maximum sentence of five years for conspiracy
to commit mail fraud, wire fraud, bank fraud and defraud the federal
government for taxes.
"In one sense, it doesn’t get much worse in the world of nonviolent, white-collar crime,"
Anello said.
Minkow
has between nine and 21 months remaining on a five-year sentence for
securities fraud conspiracy. In 2009, he used his high-profile status
and access to national media to issue false press releases claiming
Lennar was beset by faulty accounting, misappropriation of corporate
funds and other wrongdoing.
"Barry Minkow is among the worst kind
of predators," said Laura Duffy, the U.S. attorney in San Diego. "He
gained the affection and trust of his victims from the pulpit and then
stole not only their money, but their faith in humanity, the clergy, the
church, and themselves. This sentence will keep him from exploiting
another victim for a while."
At age 21, Minkow became the youngest
person at the time in U.S. history to take a company public and became
very wealthy on paper. ZZZZ Best turned out to be involved in a fraud
scheme in which investors poured $100 million into fake fire and water
restoration projects.
Minkow played himself in an unreleased movie
about his life that also stars James Caan, Ving Rhames and Talia Shire,
said Bruce Caulk, the film’s director, who attended the sentencing. The
film, which was shot before the frauds against Lennar and the church
were uncovered, will need a new ending, he said.
"It’s a redemption story gone wrong," said Caulk, adding that Minkow is ineligible to receive
movie proceeds.
Minkow faces a restitution hearing on May 19.
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