"He's still 21 years old," said the San Francisco investigator, Jack Palladino. "He was out there at the point (representing) the company and having a good time selling this company. Meanwhile, more experienced people like Mark Morze are taking care of the business and keeping the accounts on the (insurance) reconstruction work."
Palladino said Morze is now cooperating with police, hoping "to do very little time and do it in a little prison camp. And he doesn't expect to lose his assets."
Morze confirmed that has helped lead investigators through the paper trail. He said he is talking because too many people know what happened and "the damage has been done."
Morze insists that Minkow knew what was going on. "Barry was the field general, the chief of state," he said. "I worked for Barry. He's the guy who called the shots."
Although Morze readily admits he was a central figure in wrongdoing, he said he had hoped that ZZZZ Best would become a legitimate, profitable carpet-cleaning company.
The Sears deal could have been "the cure," Morze said, allowing ZZZZ Best to "get rid of this bogus restoration business. . . .
"It could've worked where there would have been no victims. We came unbelievably close."
THE RISE AND FALL OF ZZZZ BEST STOCK Chart based on the sale price of ZZZZ Best stock at the end of each week.
1. Dec. 9, 1986--ZZZZ Best sells $13.2 million worth of stock to the public.
2. Jan. 6, 1987--A noted New York investor, Steven A. Greenberg, takes an option to invest in ZZZZ Best and begins doing public relations and consulting work for the firm.
3. March 9-- Ladenburg, Thalmann, a New York stock brokerge firm, issues a report predicting fast growth for ZZZZ Best.
4. March 22--ZZZZ Best founder Barry Minkow celebrates his 21st birthday. His 51% of the company's stock is worth $64 million.
5. April 16--ZZZZ Best announces that it will buy KeyServ Group, a firm that does carpet cleaning under a contract with Sears, for $25 million.
6. April 27--"I could sell frozen yogurt in a blizzard," Minkow boasts on The Oprah Winfrey Show.
7. May 22--The Times reports that ZZZZ Best had rung up $72,000 in false credit card charges.
8. May 28--Minkow predicts record profits and sales.
9. June 17--Ernst & Whinney announces that it had quit as ZZZZ Best's auditor on June 2.
10. July 2--Minkow tells his attorney he has resigned.
11. July 6--ZZZZ Best announces it will file for Chapter 11 bankruptcy protection, and says there appears to be fraud in its insurance restoration business. The company also files a $25 million suit against Minkow and others accusing them of theft and fraud. As panicked investors sell out, the stock closes at 75 cents.
