In 1983 fifteen year old Barry Minkow began a carpet cleaning business in his parent's garage which he named ZZZZ Best (pronounced zee best). His fraudulent activities began almost immediately. He over and double-billed clients, kited checks, stole checks and deposited them into his account. When that wasn't enough to cover his deficits, he obtained his first bank loan using unaudited financial statements and phoney tax returns. Subsequent loans followed, each one larger than the last and granted with increasing ease since, on paper, it appeared that ZZZZ Best had plenty of cash.
In 1986 Barry Minkow and his partners changed their business operations to insurance restoration and took their company public. They compiled false financial data consisting of billings to made-up companies, phoney billings to existing customers, classifying expenses as capital expenditures (see: Worldcom), and drawing up phoney contracts. Forbes and The Wall Street Journal touted ZZZZ Best as one of the hottest stocks to buy and investors lined up. At it's height ZZZZ Best was valued at around $300 million. Minkow threw lavish parties, bought boats, cars, houses and was known on Wall Street as a wonder boy. It was all based on fiction.
The mountain of phoney documentation was dutifully audited by the accounting firm of Ernst and Young. Minkow had a close scrape when the auditors asked to see the buildings that ZZZZ Best were restoring. To hide the fact that no such work was going on, Minkow bribed his way into buildings that were under construction, hired "workers", put ZZZZ Best signs around the site and took his auditor on a tour. Due diligence was satisfied.
Unfortunately, the auditors later asked to see the finished buildings and the scam started to unravel. It was at this same time that ZZZZ Best was attempting to merge with a much larger company and a damaging newspaper article was published citing complaints from former disgruntled clients for the rampant overbilling practices. The merger was canceled and the SEC launched an investigation.
Barry Minkow succeeded in selling thousands of people something that never existed. He bilked them out of over $200 million and for that he served 7 years of a 25 year jail sentence and was fined $26 million.
He now lives in San Diego and preaches the gospel on television.