Ray William Johnson: True Story Podcast - America's Worst Con Man - The Barry Minkow Story

Episode Date: November 5, 2025

Barry Minkow was a teenage entrepreneur who founded the carpet-cleaning company ZZZZ Best in the 1980s and became a Wall Street sensation- until it was revealed to be one of the biggest Ponzi schemes of its time. Minkow fabricated fake restoration projects and used forged documents to trick investors, inflating his company’s value to over $200 million before it collapsed in 1987.

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and he's going to high school in California, and Barry really, really loves money. Like he'll do anything to get it, even if he has to con people. So one day in 1982, he starts up a rug cleaning business in his parents' garage, and he calls it Z, Z, Z, Z best, or Z best. And Z-Best is a legitimate business cleaning carpet, but Barry's not really making much money from it. So he comes up with a few other sketchy ideas to make himself some money. Like he hires some goons to come in and steal a bunch of stuff from him and then he reports it to his insurance company so that they'll have to pay him for his lost items.

Basically he commits insurance fraud. He steals jewelry from his grandma. He forges $13,000 worth of money orders. And so you can see that while his company is still cleaning rugs, the way he's actually making money is through all of these little kinds of fraud. And he does this for about three years. Then in 1985, credit cards start becoming a very popular way to pay for things. So Barry figures out that whenever he needs more money, he can just add a bunch of bogus extra charges to some of his customers' credit cards hoping that they won't notice. And when some of them do notice, he's like, oh, it must have been some crooked employees. Sorry about that. And he pays them back. But then he just continues on stealing from his other customers. Anyway, then he decides he wants to go bigger. And that is when he brings in a friend to the business. And with this friend, he sets up a fake company and appraisal service. And the sole purpose of this appraisal service is to verify that Barry's company, Z best,

is involved in building restoration. Building restoration is like, when a building catches on fire, the insurance company will pay for a company to come in and restore it. So Barry is basically telling these insurance companies that he's restoring the interiors of these old damaged buildings so that they will reimburse him with lots of money. The thing is, these old damaged buildings don't exist. The whole thing is a scam, but whatever, it works.

And suddenly Z-Best is making tons of cash from this. But even so, it's still not enough for Barry. He wants even more. So that next year in 1986, he decides to take his company public. Z-Best is going to be publicly traded. That way he can bring in money and that way he can start scamming the shareholders. Now, when a company goes public, usually an auditor needs to, to come in and check out the business first and make sure it's all legit.

No problem. Barry just sends his friend to rent out a whole building and he stages it to look like a work site and this ends up fooling the auditor. And so Z-Best ultimately ends up going public. And this company, it ends up being valued at over $300 million. Barry's shares alone are valued at $64 million. And within a month, the stock rises. and his shares become worth $110 million.

So the dude is like totally rich now. He's even doing commercials by this point. I'm Barry Minko, president of Z-Best carpet cleaning. But despite this high valuation, since the old building restoration part of the business is based on one big lie. Behind the scenes, Barry has to borrow money and shuffle funds between bank accounts

and basically turn the whole thing into sort of a big Ponzi scheme. But whatever again, because Barry, he don't care. He's actually loving all the attention he's getting from this. He's doing lots of interviews about how he had turned his carpet cleaning business from his garage into a multi-million dollar publicly traded company. He even goes on Oprah at one point and she interviews him. Now, after one particular newspaper interviews him, the Los Angeles Times, they suddenly start getting contacted by a bunch of his former customers who had dealt with the

fraudulent credit card billing scheme back in his early days. So the Los Angeles Times publishes a story about all his past fraud. And within a few hours, his company's stock loses a ton of value and all his banks call in their loans. And this snowballs into federal investigations. And pretty quickly, the feds realize his whole company is built on fraud. And so in 1988, bam, Barry gets a and he's convicted and he's sentenced to 25 years in prison. However, he's not done yet. He's got to commit more, even crazier, fraud. So while Barry is sitting in prison serving his sentence,

he decides that he found religion. He gets involved in ministry and he claims that he's turned his life around. And about seven years go by, and it's now 1995. and Barry actually gets released on parole. And, you know, he goes back to living a normal life for a few years, but he becomes a pastor. And he eventually gets hired by a church in San Diego to preach. And as part of his sermons, he's, you know, he's very open about his past as a con man.

But he says he's completely turned his life around and found religion. But then one day in 1997, one of his congregants comes up to him. And he says, hey, I heard this money management. firm in Orange County is doing some shady business. And he asks Barry to look into it. So Barry does start looking into it. And he eventually discovers that this firm is doing shady business. And he reports them to the FBI. And the FBI bust this company for running a $300 million pyramid scheme. But all this gives Pastor Barry a brand new business idea. Why doesn't he just start a company that exposes the fraudulent business practices of other companies. And that's what he does. In 2001,

he starts a company called the Fraud Discovery Institute, while still being a pastor at the church. And to his credit, him and his company, they actually do bust quite a few other companies for shady business practices. And so this is all going very well for him. And he starts getting national media attention, like here he is being interviewed on 60 minutes. However, behind the scenes, Barry is actually using these investigations to make himself money by manipulating the stock market. By 2006, he has this whole scheme where he'll find out some dirt on a big company, and then he'll bet against their stock right before he publicly releases his damaging report on them. Now, while all this is going on, he's also trying to get Hollywood to make a movie about his

life as a reformed conman turned preacher. And by 2011, he actually pulls it off. He funds a bunch of it with his own money. He also insists on playing the older version of himself in the movie. So he's actually in the movie. The movie's called Conman. Here's a scene from it. This is actually the real life Barry himself playing himself. And you know, it's some low budget bullshit. But you know, you can watch the whole thing on YouTube if you want. Here's a thing, though. He's not actually. He's not actually funding the production of this movie with his own money. He's actually stealing from his own congregation at church to fund this movie. Like he'll ask members of his church to donate to a hospital in Sedan.

But there is no hospital in Sedan to donate to. So he's just taking that money and he's using it to fund whatever he wants. He actually ends up stealing more than $3 million from his own congregation. Now, as far as his fraud discovery institute goes, he eventually, He eventually accuses the wrong business of being shady and they end up filing a lawsuit against him and he ultimately loses that lawsuit. And the FBI ends up investigating him for insider trading and for stealing from his own congregation. And so, bam, they arrest him.

And I don't have a mugshot, but here is a more recent photo of him. And ultimately he gets sentenced to five years in prison for the insider trading and another five years in prison for stealing from his congregation. And a few years ago, he got released from prison, and now he has a YouTube channel where he makes videos talking about bringing down other people who have committed fraud. So, you know, good for him.