Barry Minkow 2.0

The article, by Maxwell Murphy, said Dow Jones Newswires had reviewed copies of three of the subpoenas and "related materials." It quoted the SEC, saying the "investigation is a nonpublic fact-finding inquiry" intended "to determine whether there have been any violations of the federal securities law."

The story added that the SEC also wanted information on all contacts Minkow and FDI had with about two dozen individuals, including two Dow Jones Newswires reporters, Ben Dummett in Toronto and Michael Rapoport in New York, who had written about InterOil Corp.

NO CREDIT

60 Minutes correspondent Steve Kroft does the redemption story.

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• Barry Minkow
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But aside from reporting on the subpoena, the story did not look at the mounting evidence in Miami that Minkow was indeed making phony claims about businesses. Also, nowhere did the story address Minkow's claims that Maremont had been in possession of the SEC's subpoena for five months without reporting it.

In an interview with the Weekly last week, Maremont said The Wall Street Journal had not relied on Minkow's credibility when taking tips from him over the years. When Minkow passed along a tip, the Journal checked to see if it was accurate.

"Many things Barry pointed us to have in fact turned out to be real fraud, real abuses, resulting in lots of enforcement actions by authorities," he said.

But the Journal never got to the bottom of Minkow's claims about Lennar in January 2009 before writing its story about his allegations.

Maremont declined to comment about whether he had been told about the SEC subpoena five months before Minkow disclosed it on his website.

A spokeswoman for the newspaper told the Weekly that the Journal was not obligated to look more deeply into the case or Lennar's lawsuit against Minkow.

"There is a fundamental flaw in the argument that we're obliged to write about — or could even possibly write about — every lawsuit filed, including those that may involve sources," said spokeswoman Ashley Huston.

Minkow's redemption story aired in 2005. It begins with an explanation that Minkow is "back in the spotlight, not for committing fraud but for exposing it."

On camera, Minkow is relaxed and laughs frequently as he tells his story to correspondent Kroft. The segment includes an interview with a federal postal inspector, Tim France, who says Minkow helped him uncover a fraud. France says Minkow was useful but, because of his history, "I have to re-verify everything he has done already." Kroft asks France if he trusts Minkow. France says, "Trust but verify."

Last spring, a CBS News producer received a detailed presentation urging 60 Minutes to take another look at Minkow on the basis of evidence in the Miami lawsuit, a source familiar with the meeting told the Weekly.

60 Minutes did nothing.

A representative of 60 Minutes told the Weekly that the Minkow segment stands up even today.

"I think if you take another look at the wry — even humorous at times — story we did on a famous con man, you'll see that the information you brought to us doesn't change our story or the way we feel about it at all," said Kevin Tedesco, executive director of communications.

The segment is wry, but it unmistakably portrays Minkow as a legitimate fraud-buster.

In fact, 60 Minutes persuaded Minkow to go undercover for the show, using a hidden camera to try to nab a Dallas couple who Minkow alleged were engaged in fraud.

Debby and Eric Berry were running a possible Ponzi scheme through two Dallas companies, Minkow claimed. The companies bankrolled a nonprofit organization called the Nehemiah Fund, promising a 100 percent matching grant for churches willing to put in $500,000 or more.

Minkow said the deal had the markings of a "financial crime in progress" — the same phrase he later used for Lennar. The evidence? "All the red flags," he said.

The Berrys hadn't been charged with any crimes and refused to go on 60 Minutes. But after Minkow issued his report, the Texas Attorney General's Office, the FBI and the Montana auditor's office began investigations, the show reported.

The Texas Attorney General's Office told the Weekly last week that no charges were ever filed because investigators couldn't find sufficient evidence.

Fox News commentator Neil Cavuto is a self-described Minkow fan going back to 2003. (Fox is owned by News Corp., which in August 2007 bought Dow Jones & Co., The Wall Street Journal's parent.)

Cavuto over the years regularly invited Minkow on his show to weigh in on major figures who had fallen from grace. In March 2009 — a month after his allegations against Lennar and two weeks after Medifast — Cavuto invited Minkow onto a panel to discuss discredited financier Bernie Madoff.

Rather than question Minkow, Cavuto gave him the stamp of approval: "You learned the error of your ways. You returned whatever your debt to society many times over, and done enormous amount of good that dwarfs whatever bad you did. And you helped society."

It is unlikely that Minkow's victims in the ZZZZ Best scam concur with Cavuto. They are still owed much of the $26 million in court-ordered restitution — a debt Minkow has said he will be paying off for the rest of his life.