Flash Flood Watch issued September 17 at 9:56AM PDT expiring September 17 at 8:00PM PDT in effect for: Riverside, San Bernardino, San Diego
Barry Minkow, who was convicted of defrauding millions from investors with a carpet cleaning company in the 1980s, was accused Thursday of conspiring to commit securities fraud against homebuilder Lennar Corp.Federal prosecutors in Florida accused Minkow of releasing false information about the Miami-based firm on the Internet and by email in early 2009 to decrease the company's stock price and compel Lennar to make cash payment to another conspirator."These statements alleged widespread improprieties in Lennar's financial reporting and business structure, and attacked the personal character of Lennar's management," prosecutors said in court documents. Minkow did so with "reckless regard for their truth."Lennar's stock tumbled 20 percent after Minkow's report.Minkow also abused his relationship with federal authorities as an investigator to report false information and later traded Lennar securities for his own benefit, prosecutors said.Minkow's attorney did not immediately return calls for comment.Minkow was convicted of defrauding investors through his ZZZ Best carpet cleaning company. He started the company as a teenager in his family's Southern California home and at 21 became the youngest person in U.S. history to take a company public.The company purportedly restored water and fire damaged buildings, and investors were even given hard hats and tours of restoration projects. Authorities determined the project was a scheme and Minkow was convicted of 57 counts of securities, credit card and mail fraud scheme.Prosecutors said victims lost more than $100 million.After serving seven years in prison, he became a pastor and operated a for-profit fraud investigation firm in San Diego, the Fraud Discovery Institute. Documents released Thursday described Minkow as a confidential source for the FBI, and investigators have credited him with helping uncover a number of fraud cases.Minkow was charged Thursday in an information, a document that indicates he is likely to plead guilty.A note posted last week on the Community Bible Church's website in Mira Mesa, where Minkow had been a pastor, stated that he had resigned.10News reported Minkow resigned after agreeing to plead guilty in connection with a federal lawsuit.An email sent to church members on last week stated: "Today Barry resigned as our senior pastor as he is no longer qualified to be a pastor. Pastor Barry no longer considers himself above reproach as he has agreed to plead guilty to a criminal count related to the Lennar lawsuit."Some church members called Minkow's resignation sad, saying Minkow had always been transparent with the congregation.Church member Jack Myers said, "I actually think that if Barry feels that he did something wrong and he's willing to adjudicate this immediately and take his actions that's what a Christian man should do."During an interview in February, Minkow said he had done nothing wrong and told 10News to look at all the good things that have been accomplished by the Fraud Discovery Institute."We had 24 cases, 23 led to convictions ... This is case number 24. It's not over yet," said Minkow in that earlier interview.Church members said for the past three years, Minkow did not accept a paycheck and, despite his flaws, he did have some positive impact."This town has been greatly benefited by pastor Barry and I think he'll be sorely missed," said Myers.