Barry Minkow 2.0
L.A.'s fraud king is back — and taking the media for another ride
In March, 19 months after the Herbalife "one and done" and 14 months after Lennar began offering evidence of Minkow's questionable activities, Cavuto told viewers that he couldn't praise Minkow enough. In reviewing a trailer for the movie about Minkow's life, Cavuto predicted an Oscar. "It's going to be big, big, big," Cavuto said.
The movie has yet to be released.
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Cavuto did not respond to the Weekly's requests for comment, although a Fox News representative said she tried for several days to obtain one from him.
The Orange County RegisterOn Feb. 23, 2009, six months after the Herbalife retraction and a month after Lennar's detailed rebuttal against Minkow, The Orange County Register published a long, narrative piece on the front page of its Sunday paper, recapping Minkow's life. It was the redemption story all over again.
"In an epoch when much of corporate America seems like a house of cards built on a foundation of fraud, Minkow is on a crusade to render financial justice and find personal redemption," the story said.
In three paragraphs near the end, the story acknowledges Lennar's libel-and-extortion lawsuit against Marsch and Minkow. But coming at the end of a lengthy, glowing story about Minkow, those paragraphs amounted to little more than a jarring non sequitur.
John Gittelsohn, the reporter, quotes Minkow as saying he can't afford to make a false accusation. "For a guy like me, it's one and done."
But the story didn't explore the Herbalife case or the growing court file in the Lennar lawsuit.
Gittelsohn did mention that Minkow had leveled allegations against Medifast, which occurred days before the story ran. It quoted Medifast's CEO, Michael S. McDevitt, saying Minkow is "a liar and can't be trusted."
In the story, Gittelsohn discusses how Minkow deals with the press.
"Once he has the goods, he often prepares a lengthy spiral-bound written report with a glossy cover. He shoots a YouTube video, starring himself. He leaks the story to a financial reporter at a news service, such as Forbes, Bloomberg News or even the Register, who can confirm his research and whose report can impact the market. Then he places his bet and prays things go right," Gittelsohn writes.
Gittelsohn, who now works for Bloomberg in New York, declined to comment to the Weekly.
Los Angeles TimesAt the Los Angeles Times, in a column on Jan. 19, 2009, Pulitzer Prize–winning business writer Michael Hiltzik expressed deep skepticism about Minkow's claims.
Hiltzik wrote: "You certainly can't determine from Minkow's evidence that Lennar is crooked.
"When I told him so, he tried to convince me with a spiel that had the cadence of a con man's pitch — instead of haranguing me about all the suspect maneuvering I was overlooking, he might have been telling me this was my last chance to get in on a fortune at the ground floor," Hiltzik wrote.
He said Minkow responded to his skepticism by saying, "What kind of evidence are you willing to accept that will convince you ... that Lennar is lying?"
Hiltzik told the Weekly that he has remained unconvinced, saying while Minkow is good at self-promotion and trotting out testimonials from the FBI, on closer scrutiny he has mainly gone after small-scale scams and easy targets like résumé fabrications.
"There was so much talk and not so much real, solid achievement."
Hiltzik said Minkow expected people to take him at his word that he had had a jailhouse conversion and now just wanted to help out.
"I was just very skeptical. ... I didn't buy it and I didn't see evidence he was all that reformed."
Despite Hiltzik's skepticism in that column, the Times did not follow up to determine if L.A.'s famous fraud had become a menace to businesses.
Minkow told the Weekly last week that he is getting out of the business of investigating public companies and then shorting their stocks, because the investigations are expensive and government regulators, such as the SEC, don't take action.
Daniel Akst, who wrote a book about Minkow, said in an interview last week that the press has more reason to be skeptical of Minkow today because he has admitted to lying to news organizations.
But the media generally have become more "credulous" as newsrooms have shrunk and reporters have less time to do investigative journalism, said Akst, a former Los Angeles Times reporter who is now on the editorial board at Newsday.
Geneva Overholser, director of USC Annenberg's School of Journalism, said news organizations and journalists who have told Minkow's "redemption story" and have reported extensively on his allegations against companies have an obligation to the public to report on challenges to his credibility in court records and settlements as well.
"The story was big when it was a scandal, when [he became] a preacher, but where are the media now?" Overholser asked. "Of course we love a redemption story, but we're supposed to be skeptical. Redemption stories often don't pan out or last for very long."
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