By JOHN MARQUIS

AN ex-con turned pastor revealed last night how he trapped the Nassau swindler Derek Turner - and prevented what could have been one of the biggest global investment scams of all time.
Barry Minkow nailed the 55-year-old New Zealand conman in a classic FBI sting operation, posing as an investor with $2 million to risk in Turner's get-rich-quick hedge fund.

As a result, Turner - who operated his investment racket from his luxury home on Paradise Island - now faces seven years in prison, having defrauded 30 investors of $16 million. He admitted the fraud in a plea deal with the Feds to avoid a 20-year stretch, which could have led to him dying behind bars.

Mr Minkow, himself an ex-fraudster with a seven-year jail term behind him, said Turner finally confessed because incriminating conversations between the pair had been wire-tapped by federal agents.
And it quickly became clear that the flamboyant trickster had neither the trading record nor funds to back up extravagant claims made in his business prospectus.

"If Turner had been allowed to go on another year, he would have been involved in a worldwide, multi-million dollar scam," Mr Minkow told me from the US headquarters of the anti-fraud agency he now runs alongside his church activities.

"I hope five years from now that he will realise we saved him from himself.
A Wall Street Journal guy exposed me, and although I hated him at the time, I came to realise it was the best thing that ever happened."

After his arrival in the Bahamas in the year 2000, he bought five properties, including an office on East Bay Street, in an attempt to "look big" in front of his wealthy neighbours on Paradise Island.

Socialising

One of his tactics was to oil his way into the company of celebrities and high-rollers, and he was particularly pleased with himself when he bought an Ocean Club Estates property near baseball ace Barry Bonds.
But, according to Mr Minkow, the plausible villain was cash-starved to the point where he was desperate to lay hands on the $2 million he (Minkow) pretended to hold as a potential investment.

"He claimed to have a $500 million fund, and to be generating a 40 per cent return. Why, with a supposed $200 million a year income, would he be interested in my $2 million?" asked Mr Minkow.

"At that rate, he could double his money every two-and-a-half years, yet he was pressing me to invest and I knew he had a need for cash. Perpetrators of ponzi schemes always need cash.

"What Turner was doing was taking investors' money and buying real estate.

He needed to look big because that's the only way you can attract investments from the genuinely wealthy.
"You can't operate a successful investment fund and run around in a Toyota.

He knew if he could build up an empire, he could mix with the right kind of people. Having a home near someone like Barry Bonds was very important to him."

That is when the FBI installed the prisoner-turned-preacher in a room at Atlantis and began a four-day sting operation that eventually brought Turner to justice.

Meetings

Mr Minkow had two meetings with Turner - one over dinner at the New Zealander's home, when promises of a 38 per cent return were made in an attempt to lure the pastor into his scheme.

The dinner was ostensibly a pleasant social occasion, but Mr Minkow was all the time wiring the "smoking gun" evidence that was to be Turner's downfall.

"Sadly, he reminded me a lot of me," said Mr Minkow, "he was charismatic and absolutely sure of himself. He was one of those guys who simply protesteth too much.

"He claimed his Taiwanese wife's family had $250 million in the fund. He wanted to create an image for himself. He had to make sure that his image tied in with his story."

So where did Turner go wrong?

According to Mr Minkow, the rogue trader erected a wall between his investors and independent corroboration.

"He never showed anyone trading records that would independently back up that he made 38 per cent a year. He had no audited financial statements. You were left with his charts, his words and his personality.
"These investors had never seen any independent corroboration. No-one gets these returns on a consistent basis."

Turner's portfolio was subjected to the scrutiny of an independent markets expert who reported that it was impossible to constantly generate the results he was claiming on a monthly basis.

Authorities

Turner also erred in not disclosing his brush with Australian regulatory authorities, when he was barred from trading because he didn't have a licence.

"He said in his prospectus that for seven straight years he generated huge returns, yet for part of that time he was shut down," said Mr Minkow.

When Turner was first arrested in New York, he denied wrongdoing and tried to pin a defence on Mr Minkow's undercover methods.

But the wire-tapped evidence against him was so strong, so powerful, that he eventually accepted the game was up.

Rather than face 20 years in jail, he "fessed up" and plea-bargained a seven-year term, with formal sentencing expected next month.

So how does Mr Minkow feel, having tricked Turner into the indiscretions which determined his destiny?
As a pastor who sees himself as "just one bad decision away from another prison term", Mr Minkow does not gloat.

On the contrary, he wants Turner to learn from the errors of his ways, to accept his dishonesty and rebuild his life.

"What you must remember is that people like us never go into business with the intention of defrauding anyone," he said.

"We don't think of ourselves as villains. We always take the view that one year from now we are going to make the big trade and that everything is going to be okay.

"We always think people will eventually get paid. We can sleep at night because we don't think of ourselves as crooks."

Does Turner's incarceration give him personal satisfaction? "I have a great satisfaction that people are not going to be defrauded anymore. I hope that Turner's property gets liquidated and that everyone gets repaid.

"I feel I forgive the guy. I hope he turns his life over to God. I have nothing personal against him. I have a heart for people who make mistakes. I am a liar who was saved by God's grace."

Change

Claiming Turner is a man with "a lot of talent", Mr Minkow said: "I believe that people can change. I believe that people can come back from failure. I would visit him in prison in a minute if asked.

"I am a pastor. I have a pastor's heart. I pray that he will pay back his victims and come back from this failure. And I would hope he would have a lot more humility."

Reflectively, Mr Minkow added: "All he had to do was produce the trading records. But he didn't have the trading records or the money."

All he had, in fact, was an elaborate impression of wealth which he used ruthlessly to swindle others, causing heartbreak and anxiety among those foolish enough to be taken in by his blandishments.
Now he has seven long years in which to contemplate the error of his ways.