anatomy of a scam ...
In the Wall Street Journal article I have referenced previously, one line still stands out:
"A key figure in spotlighting the site [12DailyPro] was Barry Minkow, a former carpet-cleaning executive convicted of running a Ponzi scheme in the 1980s who has turned to helping regulators and investigators unravel fraud." I have questioned since the beginning of this mess how the connection was arranged between this felon and an attorney - wondering what plea bargain StormPay must have made to have stooped to such a strategy, and what StormPay was accused of.
When the WSJ article appeared, it was easy to respond to the author of that article, which I did. Never got a response - no indication that any information I provided Mr. Maremont was received by him, WSJ has become "subscription only" now ... : ) - no Internet access without registration.
Mr. Barry Minkow, who is not an attorney but is a convicted felon, and author of "Cleaning Up" - the story of " ... America's most celebrated teenage business hero, his secret world of fraud and corruption, prison, redemption, and a personal crusade to pay back the millions he stole. "
- http://www.barryminkow.com
"Raised in a culturally Jewish family inside a modest Reseda house within the San Fernando Valley of Los Angeles, Minkow learned his business manners from his mother's job as a telemarketer. At the age of 15 while a high school sophomore he started his own carpet cleaning company, Zzzz Best, in his parents' garage in Reseda. From its humble beginnings in home carpet cleaning by a few employees, in four years it had 1,400 employees and had begun to specialize in insurance restoration business. His frequent television commercials in the Los Angeles market during 1986-7 featured the then young entrepreneur in business suit with tie, confidently extolling the superiority of Zzzz Best."
Minkow worked hard to form dozens of business contacts. His most important contact was Tom Padgett of Interstate Appraisal Services, an insurance claims adjuster who could get large restoration contracts. He was presented as a business success story in magazines and TV shows. Mayor of Los Angeles Tom Bradley declared a Barry Minkow Day. He lectured in business schools and contributed to Narcotics Anonymous. He had a Ferrari Testarossa and a mansion in Woodland Hills. Zzzz Best' stock rose to $18 (USD) a share on Wall Street, valuing the company at more than $280 million (USD).
However, behind the scenes his company was nothing more than a front to attract investment for a Ponzi scheme. Zzzz Best did not clean anywhere near as many carpets as claimed but generated a plausible paper trail to fool potential investors. Interstate Appraisal Services was formed as a separate company to support this fraud. Minkow raised money by factoring his accounts receivable for work under contract. One of the first contracts he received was from the Genovese Mafia family. He hired reputable accountants and lawyers to boost his image. Later, upon indictment, he claimed that he had intended to form a legitimate business empire and pay back everything, nobody being the wiser."
This is the same guy who called Charis Johnson's attorney from his Los Angeles "office" representing himself to be an attorney. No one at 12DP was aware at that time that StormPay had any office in Los Angeles, so 12DP attorney declined to give the caller any information on 12DP. Most often cited by StormPay as cause for freezing 12DP account was that 12DP would not disclose its business plan.
The anatomy of sleaze. How admirable that someone can pose as a redeemed crook, on a "mission" to pay back "the millions he stole" and do it by stealing more millions, or at least being complicit in the theft ? Only in America, eh ? Minkow may now be a private investigator, but he cannot be an attorney or teacher unless the rules have changed. At least now I understand why the SEC filing against 12DP was in Los Angeles.
John McConnell was quoted in the Leaf Chronicle saying, "McConnell said their records indicate the last payments from 12DailyPro operator Charis Johnson to members was Jan. 8." I received three payments from Charis on January 26 - says so right in my StormPay history. John continued, "When complaints of nonpayment came to StormPay later in January, company officials began to suspect something was wrong after Johnson was unable to answer questions about her business." ... while on another page, Leaf Chronicle reported: " ... Payments to 12DailyPro members continued through the end of January."
The Chronicle might be forgiven for being such a small community paper - not a large staff, focusing on community events. I have wondered how it came to report anything about StormPay. Tennessee state government's apparent reluctance to "enforce" laws and regulations on StormPay might be due to StormPays' having outsourced some of its functions to another country where Tennessee has no jurisdiction. I am following up on that now ...
"A key figure in spotlighting the site [12DailyPro] was Barry Minkow, a former carpet-cleaning executive convicted of running a Ponzi scheme in the 1980s who has turned to helping regulators and investigators unravel fraud." I have questioned since the beginning of this mess how the connection was arranged between this felon and an attorney - wondering what plea bargain StormPay must have made to have stooped to such a strategy, and what StormPay was accused of.
When the WSJ article appeared, it was easy to respond to the author of that article, which I did. Never got a response - no indication that any information I provided Mr. Maremont was received by him, WSJ has become "subscription only" now ... : ) - no Internet access without registration.
Mr. Barry Minkow, who is not an attorney but is a convicted felon, and author of "Cleaning Up" - the story of " ... America's most celebrated teenage business hero, his secret world of fraud and corruption, prison, redemption, and a personal crusade to pay back the millions he stole. "
- http://www.barryminkow.com
"Raised in a culturally Jewish family inside a modest Reseda house within the San Fernando Valley of Los Angeles, Minkow learned his business manners from his mother's job as a telemarketer. At the age of 15 while a high school sophomore he started his own carpet cleaning company, Zzzz Best, in his parents' garage in Reseda. From its humble beginnings in home carpet cleaning by a few employees, in four years it had 1,400 employees and had begun to specialize in insurance restoration business. His frequent television commercials in the Los Angeles market during 1986-7 featured the then young entrepreneur in business suit with tie, confidently extolling the superiority of Zzzz Best."
Minkow worked hard to form dozens of business contacts. His most important contact was Tom Padgett of Interstate Appraisal Services, an insurance claims adjuster who could get large restoration contracts. He was presented as a business success story in magazines and TV shows. Mayor of Los Angeles Tom Bradley declared a Barry Minkow Day. He lectured in business schools and contributed to Narcotics Anonymous. He had a Ferrari Testarossa and a mansion in Woodland Hills. Zzzz Best' stock rose to $18 (USD) a share on Wall Street, valuing the company at more than $280 million (USD).
However, behind the scenes his company was nothing more than a front to attract investment for a Ponzi scheme. Zzzz Best did not clean anywhere near as many carpets as claimed but generated a plausible paper trail to fool potential investors. Interstate Appraisal Services was formed as a separate company to support this fraud. Minkow raised money by factoring his accounts receivable for work under contract. One of the first contracts he received was from the Genovese Mafia family. He hired reputable accountants and lawyers to boost his image. Later, upon indictment, he claimed that he had intended to form a legitimate business empire and pay back everything, nobody being the wiser."
This is the same guy who called Charis Johnson's attorney from his Los Angeles "office" representing himself to be an attorney. No one at 12DP was aware at that time that StormPay had any office in Los Angeles, so 12DP attorney declined to give the caller any information on 12DP. Most often cited by StormPay as cause for freezing 12DP account was that 12DP would not disclose its business plan.
The anatomy of sleaze. How admirable that someone can pose as a redeemed crook, on a "mission" to pay back "the millions he stole" and do it by stealing more millions, or at least being complicit in the theft ? Only in America, eh ? Minkow may now be a private investigator, but he cannot be an attorney or teacher unless the rules have changed. At least now I understand why the SEC filing against 12DP was in Los Angeles.
John McConnell was quoted in the Leaf Chronicle saying, "McConnell said their records indicate the last payments from 12DailyPro operator Charis Johnson to members was Jan. 8." I received three payments from Charis on January 26 - says so right in my StormPay history. John continued, "When complaints of nonpayment came to StormPay later in January, company officials began to suspect something was wrong after Johnson was unable to answer questions about her business." ... while on another page, Leaf Chronicle reported: " ... Payments to 12DailyPro members continued through the end of January."
The Chronicle might be forgiven for being such a small community paper - not a large staff, focusing on community events. I have wondered how it came to report anything about StormPay. Tennessee state government's apparent reluctance to "enforce" laws and regulations on StormPay might be due to StormPays' having outsourced some of its functions to another country where Tennessee has no jurisdiction. I am following up on that now ...
posted by JamesB at 9:00 AM
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