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Barry Minkow to begin serving second prison sentence for fraud

Federal prison authorities order two-time fraud convict Barry Minkow to begin serving his five-year sentence at the Federal Medical Center in Lexington, Ky., instead of a minimum-security work camp in Alabama.

September 21, 2011|By E. Scott Reckard, Los Angeles Times
  • "The Feds found a way to be a bit punitive and put me in an 'administrative medical facility' which houses inmates of all levels," Barry Minkow said in an email to The Times.
"The Feds found a way to be a bit punitive and put me in an 'administrative… (Sandy Huffaker, Bloomberg…)

Two-time fraud convict Barry Minkow is set to begin his latest prison sentence at the Federal Medical Center in Lexington, Ky., not the minimum-security work camp in Alabama he had hoped for and a judge had recommended.

In an email to The Times, Minkow said prison authorities had ordered him to begin his five-year sentence Wednesday at the Lexington facility that "from the outside looks like Leavenworth Penitentiary."

He had cited severe medical problems in asking a judge for leniency, a factor apparently taken into account by the Federal Board of Prisons.

"The Feds found a way to be a bit punitive and put me in an 'administrative medical facility' which houses inmates of all levels," Minkow said.

His attorney, Alvin Entin, said the decision was made because of "mental issues" as well as Minkow's "physical problems."

Prosecutors in Miami, where Minkow pleaded guilty to a single fraud count in March, could not be reached for comment Tuesday.

Minkow stepped into the national spotlight as a teenage business whiz in the 1980s after starting ZZZZ Best, a carpet-cleaning company, in his parents' garage in Reseda. He wound up spending more than seven years in prison after ZZZZ Best turned out to be a sham built on credit-card fraud and largely fabricated work orders.

After his release, he expressed remorse and reinvented himself as head pastor at Community Bible Church in San Diego and founder of the Fraud Discovery Institute, a detective shop that set out to expose investment frauds and corporate wrongdoing.

His plea in March was to a charge of conspiring to damage Lennar Corp. by attacking the Miami home builder as a "financial crime in progress." The reports, which he acknowledged were filled with falsehoods, caused Lennar's market value to plummet more than $500 million.

Minkow had been hired by Nicolas Marsch III, a San Diego County developer whose partnership with Lennar in Rancho Santa Fe had soured. Marsch denied wrongdoing.

Minkow told U.S. District Judge Patricia A. Seitz in Miami that he had become addicted to painkillers he used to treat his migraine headaches and finally kicked the habit when he realized he was under criminal investigation.

He also told the judge that abusing steroids as a teenage weight lifter had rendered him sterile and that he needed constant treatments to limit his body's production of the female hormone estrogen.

Seitz granted his request to be placed in a prison addiction treatment program. She also recommended that Minkow be placed in a work camp at Maxwell Air Force Base in Alabama, but the federal Bureau of Prisons decided on the Lexington medical facility instead.

"I deserve it and will be fine," Minkow said.

He noted that the prison is much nearer to the small town in Tennessee where he has lived recently with his wife and two adopted sons.

"Lisa and the boys will have a much easier time driving three and a half hours rather than eight hours to Maxwell," Minkow said.

scott.reckard@latimes.com

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