The president of conman Barry Minkow's Fraud Discovery Institute (FDI) has apologized to "friends" and other followers, saying the company had "fallen away from our mission and our credibility and our sweat equity that we worked so hard to earn."
The statement by FDI President Juan Lopez, transmitted via Twitter, came after LA Weekly reported that a Florida judge had found that Minkow lied, withheld or destroyed important documents and concealed key witnesses in a libel and extortion lawsuit filed by Lennar Corp., a giant home-building company headquartered in Florida. Lopez linked the Weekly article to his Twitter account.
Minkow is the supposedly reformed Los Angeles conman who served time in federal prison after defrauding investors in his 1980s-era ZZZZ Best carpet-cleaning company out of as much as $100 million. After his release from prison, Minkow billed himself as a corporate fraud buster and a man of God.
In recent years, Minkow began making allegations of wrongdoing by large businesses -- and he profited when the news sent their stock prices down.
Lennar was among those Minkow targeted.
The company filed its lawsuit after Lennar's stock plummeted 20 percent, $500 million, on the heels of unsubstantiated allegations by Minkow and FDI in January 2009. When Lennar lawyers pressured Minkow in court to prove that his allegations were true, Minkow lied and deceived, Judge Freeman found.
The apology by Lopez contrasts with the comments Minkow made to a Florida business publication about the court finding. Reached in San Diego at Community Bible Church, where he is senior pastor, Minkow told the Daily Business Review that the judge "ruled against me personally but allowed FDI to continue in the case, so FDI is still alive in the case. ... We will have a chance to pursue the case and prove that [my findings] were true."
The Weekly was unable to reach Minkow and Lopez on Friday. An FDI staff person said Lopez was out of the country, and Minkow was also not immediately available.
Joshua Entin, who represents Minkow and FDI, called the judge's ruling disappointing and said the sanctions, in the form of Lennar's attorney and investigative fees, were excessive. He said Minkow will appeal.
"We disagree with her findings to the extent she rendered a decision Barry should be defaulted and not be able to defend (himself) against the allegations. As to the liability, we also believe that to be in error," said Entin, of Rosen Switkes & Entin in Miami Beach.
Should Minkow lose on appeal, he will face a potentially ruinous hearing on compensatory damages in the libel case Lennar has estimated at up to hundreds of millions of dollars.