Barry Minkow Will Plead Guilty to Insider Trading

Barry Minkow, the mastermind behind the ZZZZ Best fraud, will plead guilty to one count of insider trading, according to the WSJ.  Minkow spent seven years behind bars for his crimes related to the ZZZZ Best fraud, and since serving his time has worked as a minister for a California church and as a fraud buster.  Minkow has received accolades from the FBI for his role in exposing a number of frauds.  To fund his fraud busting operation, Minkow would short the stock of the companies he investigated just prior to publicly releasing his reports on the questionable activity of those companies.  In one of those cases, it appears that Minkow traded on privileged information.

More on doping in cycling

Edmund R. Burke, has written many books on cycling and has been involved in the science of the sport for decades. In a recent article, Burke restates what I've said on this blog before as he says that as long as there's money (in cycling) there will be fraud (in the form of doping).

Is Bernie enjoying the life of a cushy white-collar prisoner?

Mark Morze was the ZZZZ Best fraud perpetrator who could play the copy machine like Horowitz played the piano. He created about 10,000 fictitious documents to support Barry Minkow's fraudulent carpet cleaning and restoration business. Morze ended up serving five years in federal prison. I once read an article documenting his experience of prison life. Here is a quote:

With a five-year sentence to serve, Morze expected an early parole from a plush, white-collar prison/resort complete with golf course and tennis courts, a la Erlichman and Haldemann of the Watergate scandal. But reality didn't jibe with expectation. He got five long years of sleepless nights, living in fear of routine prison stabbings, rapes, and assaults at Lompoc prison, Lompoc, Calif.

"Gangs control everything," Morze said. "Guards don't run prisons, the inmates run them. The guards just keep you from escaping."

An article in today's WSJ suggests that Bernie Madoff is having a similar prison experience. Here is an excerpt:

Mr. Madoff was treated for a broken nose, fractured ribs and cuts to his head and face, according to a felon currently at Butner serving time on drug charges who was familiar with his condition at the time. ... Another inmate who recently was released from Butner after serving time on drug charges also confirmed the assault, as did a third person familiar with Mr. Madoff's situation. The former inmate said the dispute centered on money the assailant thought he was owed by Mr. Madoff.

It's tragic that fraud perpetrators have to learn critical lessons of life the hard way all the while leaving a wake of suffering victims behind them as they eventually enter a life of misery themselves. Fraud may pay in the short run but it never pays in the long run!