July 21st, 2011
11:44 PM ET

Crime & Punishment: Once-reformed con man pleads guilty to securities fraud conspiracy

(CNN) - Back in the 1980s, California teenager Barry Minkow seemingly had it all: a Ferrari, a mansion and a carpet cleaning business valued at nearly $300 million. He started Zzzz Best at age 16 in the basement of his parents' San Fernando Valley home, eventually hiring them to work for him. He appeared on Oprah, in his own TV commercial and became a young entrepreneurial darling of Wall Street.

"The banks threw money at him and the investors threw money at him," says former U.S. District Court Judge Dickran Tevrizian. Former federal prosecutor Gordon Greenberg recalls "Barry made it easy for people to believe in him. He had that unique ability of getting people focused, and it was audacious."

Audacious because, according to court records and Minkow's own admissions, nearly 90-percent of Zzzz Best's business was fraudulent. He was accused of engineering a massive Ponzi scheme where he used phony contracts for carpet cleaning jobs, as well as fire and water damage repair in large commercial buildings, as collateral for bank loans.

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