SAN DIEGO -- 10News first met Barry Minkow more than 20 years ago when he was convicted and sent away for a $26 million Ponzi scheme fraud.

Minkow was 22 years old at the time, and now he is working on the other side of the fence.

Minkow described Ponzi schemes as "the skin of truth stuffed with a lie."

His Z-Best carpet cleaning business made millions. He swindled his way to fame and fortune -- and prison. It was primarily based on charisma.

"Perpetrators of Ponzi schemes rely on the credibility of me being on Oprah, or Madoff being former chairman of the NASD (National Association of Securities Dealers), so therefore he couldn't be a perpetrator of fraud …," said Minkow.

We've seen how that turned out. Minkow bilked investors out of $26 million, while Madoff took $50 billion. Minkow said it's the same basic premise.

"If the only way you're getting into an investment is subjective ... (those in investment fraud) live off 'Go ask your friend, he's been getting paid for ten years.' Of course he has. If not he'd go to the cops. If I could pay him on time, he'll be an apostle for the deal," said Minkow.

There's another element in the equation.

"… Of being on TV or being the former chairman of the NASD. And watch out for the affinity thing, because in the church I'm your Christian brother, I wouldn't rip you off," said Minkow.

It's worth repeating: confidence men are slick. Due diligence means looking below the surface. You don't want to be a mark.

"We who look for marks look for people who have paid on time to bring in their friends …," said Minkow.

His last piece of advice was to not drop your guard.

The Fraud Discovery Institute has worked closely with the Securities and Exchange Commission in investigations over the years.

Their Web site lists more than 20 cases, totaling almost $2 billion in fraud.