Barry Minkow 2.0

Minkow has targeted at least two companies since the Lennar court case began: Medifast, a diet-food company headquartered in Maryland, and InterOil Corp., an Australian-based company exploring for oil and gas in Papua New Guinea.

Minkow targeted Medifast on Feb. 20, 2009 — six weeks after Lennar accused him of libel and extortion. Minkow said Medifast was a Ponzi scheme. The company's shares tumbled 30 percent. Minkow told the Weekly that he had purchased put options to profit from the declining stock price.

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Minkow as FOXNews' fraud expert

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More About

• Barry Minkow
• U.S. Securities and Exchange Commission
• Fraud Discovery Institute
• Crime and Law
• Crime

The company filed a $270 million defamation lawsuit against Minkow in February.

On June 26, 2009, Minkow called another company — InterOil Corp. — a "classic case of a Ponzi scheme." He had purchased put options on InterOil's stock, according to the San Diego Reader.

Instead of looking into Minkow's activities, news organizations have ignored the mounting evidence against him in Miami. Here are prime examples:

One of the first Minkow redemption stories appeared in The Wall Street Journal on Aug. 25, 2003, under the headline "Former White-Collar Felon's Insights Reap Redemption." The story described Minkow's work on behalf of government agencies, including the SEC.

Over the years, Wall Street Journal reporters developed a close relationship with Minkow as they wrote about the companies and executives FDI was accusing of wrongdoing. Many of Minkow's claims in those earlier years were indeed true.

On April 25, 2008, The Wall Street Journal wrote that Minkow caught Herbalife's president's résumé fabrication. The story briefly recapped Minkow's prison record and also mentioned the praise he had won from the FBI in uncovering corporate fraud since his release from prison.

(Many other news organizations have reported those words of praise from the FBI. They derive from a letter written by FBI Special Agent Peter H. Norell on Oct. 24, 2005. Norell lauds Minkow for helping the FBI and other law enforcement agencies to "disrupt and dismantle various financial frauds totaling millions of dollars."

(But here is a detail you won't read in Minkow stories about his FBI connection: Norell was forced to resign from the FBI and pleaded guilty last March to the misdemeanor charge of tapping a government computer in August and September 2005 to get information on a person who owed money to a friend.)

The Journal's story detailing Minkow's allegations against Lennar appeared on Jan. 10, 2009. It was written by reporters Michael Corkery and Mark Maremont.

The story lists Minkow's claims and goes on to recap Minkow's past as a stock-fraud felon and the FBI's praise of his fraud investigations.

The reporters quoted Minkow as saying he was being paid by "an unnamed client" and that he did not hold a put option on the company's stock. Minkow also stated in sworn deposition testimony that he had never shorted Lennar stock, a claim the Miami court record later would reveal as a lie.

The story included Lennar's denials but they were brief, given that the company had only hours to evaluate the allegations before being asked to comment.

The company issued a far more detailed rebuttal on Jan. 12, 2009 — making a case that has stood up since. But The Wall Street Journal didn't report those arguments, despite the enormous damage the company suffered at Minkow's hands.

Indeed, the Journal's reporting came to a near halt for months — even as both Marsch's lawsuit against Lennar and Lennar's lawsuit against Minkow and Marsch generated an extensive public-records trail.

Minkow has continued to put out inflammatory press releases against Lennar, touting the "Top Ten Red Flags for Fraud 2 — The Sequel" and footage from an FDI documentary, Too Big to Go to Jail: The Lennar Story, which purports to demonstrate the company's "alleged nationwide pattern of fraudulent behavior."

The Wall Street Journal took the bait once again. In a March 31 story posted online, the paper reported that Minkow's documentary promises to show "a disturbing pattern of apparent fraudulent behavior ... ranging from the falsification of government documents to the utilization of their joint ventures to conceal debt and siphon cash from unwitting joint-venture partners."

On June 4 of this year, Minkow's relationship with the Journal took a strange turn. Minkow disclosed on his website that FDI had received a "nonpublic subpoena from the SEC." Six companies Minkow had criticized, including Lennar and Herbalife, Medifast and InterOil, had filed SEC complaints against him, the statement said.

Minkow said he was disclosing the subpoena in the interest of full transparency. But the facts suggest that he knew the subpoena was about to become public and that he struck first so as to give it a positive spin.

In explaining the subpoena, Minkow's website defended him in a surprising way. He claimed that five months earlier, in January 2010, he had forwarded to Wall Street Journal senior editor Maremont a copy of the subpoena along with his company's 300-page response to it.

Minkow said Maremont's decision not to write about the subpoena was proof that it was of little consequence. "For six months, The Wall St. Journal decided that it wasn't news," Minkow wrote.

A week later, however, on June 11, 2010, the Journal's sister company, the Dow Jones Newswires, decided the SEC inquiry into Minkow and FDI was news, publishing a story headlined "SEC Probe Into Barry Minkow's Fraud Discovery Institute Continues."