April 25, 2005
A pastor writing sermons by day. An undercover investigator at night.

BY ROBERT E. KESSLER
STAFF WRITER

That's how Barry Minkow, a former notorious stock swindler, describes his life since he got out of federal prison nearly 10 years ago.

His most recent undercover work for the FBI led earlier this week to the arrest in Melville of a man who allegedly was running a phony hedge fund, said Minkow, an evangelical minister in San Diego who also has set up a business to help track down stock swindlers.

Calling himself "a liar and thief spared by the grace of God," Minkow has been credited by the FBI and other law enforcement agencies with helping them catch a number of swindlers, including confidence men in California and Chicago who were targeting members of churches, U.S. Marines and athletes.

"People can ask for forgiveness and find all that contentment ... that I couldn't find with my 5,000-square-foot house, Ferrari and money," Minkow said. "I've been out of prison for 10 years, and I have found that contentment."

In the 1980s, Minkow masterminded the $300-million ZZZZ Best fraud, for which he was sent to prison for seven years. Minkow started his endeavor in his mother's garage in Reseda, Calif., when he was 16 years old.

The business revolved around a supposed carpet-cleaning firm that federal prosecutors showed actually was a Ponzi scheme, a scam in which investors are paid returns from money raised from subsequent investors, rather than from profits generated by a real business.

Minkow said he was stealing from relatives, including his grandmother, to support the scam and also managed to keep ZZZZ Best going by borrowing money from organized crime figures in Queens at extortionate rates of 250 percent a year.

In a telephone interview from his San Diego office, Minkow said that whoever else may have lost money in his scheme, he made sure he repaid the mob figures first.

In the interview and in two recent autobiographies, "Cleaning Up" and "Clean Sweep," Minkow said he was raised as a Jew but became a born-again Christian through the inspiration of a Christian counselor before he entered prison, and then through a cellmate.

The man arrested on Long Island through Minkow's work, Derek Turner, a New Zealand native, was arraigned Monday by Magistrate James Orenstein at the U.S. District Court in Central Islip.

At a bail hearing Thursday, Turner's attorney Joseph Conway, of the Mineola firm of LaRusso and Conway, said he was still in the process of gathering bail for his client. Conway, the former head of the U.S. attorney's office on Long Island, previously has said that his client, who operated Turning International, Ltd. from the Bahamas and a branch office in Melville, is innocent.

Assistant U.S. Attorney Mark Lesko, said that considering Turner's actions, he was "a considerable flight risk."

Minkow said he got involved in the Long Island case when a lawyer for his San Diego business, the Fraud Defense Institute, told him about a client who had been solicited by Turner's fund.

After several months of taping meetings and telephone conversations, Minkow was invited to meet with Turner in the Bahamas, where he secretly recorded what court documents say were incriminating conversations.

Some have questioned Minkow's motives for his current persona, contending that his dual roles as pastor and undercover investigator might be some type of new scam.

In prison, he said, some fellow inmates taunted him by saying he would be "born again till you're out again."

But Minkow said he should be judged on the good he has done through his Fraud Discovery Institute.

He said his best reference is the federal judge who originally denied him a lenient sentence after he was convicted in the ZZZZ Best case.

Two years ago, the judge, impressed by Minkow's work, released him from probation three years early, saying, "We have another problem facing our country now with corporate dishonesty ... Go in and investigate some of these frauds, as [the federal prosecutor in your case now] says that you're doing and bring others to justice."