Barry Minkow’s career has largely paralleled mine, and he has always been to me one of the most interesting personalities to intersect with my profession. His audacious ZZZZ Best fraud still stands as one of the preeminent examples of creating something out of nothing. Perhaps 80 percent of the sales for his public company were completely made up, and he managed to fool auditors and investors long enough that at one time the company had a market capitalization of over $240 million. When they liquidated the company, the total assets brought less than $60,000.
What fascinated me was the fact that Minkow did not slip quietly into oblivion, as so many fraudsters do. While he was serving seven years in federal prison, he was interviewed by Joe Wells, who founded the Association of Certified Fraud Examiners. That interview has been watched by tens of thousands of accounting students, including many of mine. Minkow was completely transparent about the ways he deliberately manipulated audit partners and their spouses to believe a lie and to embrace his media personification as a “boy wonder” entrepreneur. The video is instructive, and it has helped to better calibrate the professional skepticism of many people.
In the 1990’s, after his release from prison, Minkow rebuilt his life on the foundation of a conversion to Christianity and the pursuit of fraud performed by others. I followed this next chapter with interest as well, particularly as it seemed to validate the story of redemption which seems so central to men continuing to have hope after their inevitable failures. While spending 14 years as a pastor, Minkow also founded the Fraud Discovery Institute, and he worked undercover in multiple situations to root out fraud being committed by other companies. The judge who sentenced him was so impressed by the work that Minkow did that he removed all the conditions from his federal parole. Minkow worked closely with law enforcement and gained a reputation for his insights into fraudulent dealings. He even taught fraud courses for the FBI.
The one consistency across the years as a business owner, felon, and fraud detective has been Minkow’s tendency toward self-promotion. Never afraid of a camera, a willing story teller who seems to revel in revelations, he was never far from a press release or YouTube clip. In fact, a major motion picture biography of his life has been made recently, starring James Caan and Mark Hamill (Luke Skywalker of Star Wars fame). The movie’s release and, in fact, its ultimate ending, are uncertain now.
Last week The Wall Street Journal and The Washington Post reported that Minkow has agreed to plead guilty to a securities charge that could land him in prison for five years. He has been accused of falsely citing homebuilder Lennar Corp. with producing fraudulent financial statements, depressing the price of the stock, at the same time he was betting against the stock in the market on supposedly nonpublic information.
Many will write this off as the story of a man who never changed, but there seems much more to it than that. For my young auditors, I would warn them to always be professionally skeptical, and especially of those who tend to promote themselves or focus on themselves. You should not be surprised that these things happen, but you do not need to be cynical about people as a result. Many lives turn, stay turned, and finish well.
What I take to heart for my own life is that we are all vulnerable. Every indication is that Barry Minkow’s spiritual conversion was genuine, and that he has been a mentor to many men, as well as being a good husband and father. The price he will pay in his personal life, what he will have to give up, is much higher now than it was the first time. I need people to watch my back, and to point out to me when I am making myself vulnerable to a fall. I need to be accountable.
Finally, I need to be careful if I find myself drawn to the limelight. If what I want is approval and applause, the price can be very high. That siren call will draw my students as well, and I need to find ways to let them know in advance.
I am sorry to say that, until I become a better lighthouse, the wreckage of Barry Minkow’s ship on the rocks will have to be warning enough.
Mike,
Thanks for your writting this article. I really enjoyed reading this and agree wholeheartedly with your summation.
Kind Regards,
Pat
I find ambition to be a common characteristic among people who commit fraud. Same with Minkow – founded the carpet cleaning company as a teenager, he obviously got a lot of ambition and aspiration to succeed. When reality turns out to be different than what he had hoped, in a personal denial of being mediocre, he turned to fraud. Once he started to make up stories to investors, it’s impossible to stop. What surprised me is that he did it again. It appears to me that he enjoyed his renewed reputation too much, he thought he wouldn’t get caught. Yes, why not make a few bucks on the side? No one would know.
I think America has a huge admiration for wealth and success. From childhood, we were told by our parents, and our teachers that we are the smartest in the class, that we will succeed. It creates not only pressure but mental inconsistency for those who are ambitious, wanting to make it big, but ended up being only mediocre.
Great piece.
Mandy, ACFE Social Media Specialist
Americans pride themselves on giving second chances to people, but I’m not sure of many cases where third or fourth chances were given freely. Whether or not Minkow’s change of heart was genuine, it is still unfortunate that he committed this second crime, especially since it will be very difficult for people to trust him again. Plus, he is putting his family through the same pain and anguish as he did before. I agree that we can’t judge him as being a liar or a fake all along, but it does show that we should not take everything that people say at their word either. Great article!
This was an interesting article about Mr. Minkow and his reliance on maximizing profits off investors through his ponzi scheme at ZZZZ Best. It was completely eye-opening that he was caught when he only turned 21. It seemed after his prison term that he changed his life through church and assisting the government with other scandals, however, I feel some people just don’t change. He proved this once again by getting caught in the Lennar case. On a side note, I would encourage people to watch the interview of him in prison when he described in full what he was doing at ZZZZ Best, he was a pretty interesting guy. Thanks for the article!!
We tend to think the best of people until they mess up the first time. They might get a second chance, but you’re watching closely to see if they’ll falter. After a second chance, as they say, actions speak louder than words. I’m not saying that Mr. Minkow doesn’t deserve another chance. I’m simply saying he is going to have a hard time finding someone who is willing to bet on him a third time. Hearing about people like Mr. Minkow is very sobering for me. I think sometimes we catch ourselves having thoughts along the lines of “that will never be me.” But in a world that is driven by success and the clamor for fame and fortune, it’s so important that I make the decision now about what side of the line I will be on when the dust settles. If you don’t have your integrity, then what do you really have? Thanks for sharing your thoughts!!
This story proves that some people think they can live above the law. They think with a little charisma and smarts they can cheat the system. Inevitably, Mr. Minkow will have to realize that is just not the case. In many cases the law catches up and even if it doesn’t, he will have to live with the reality that he let his family and his congregation down. No amount of money or fame should jeopardize that.
I hate to sound like my mother, but once a cheater always a cheater. I don’t know if I believe Mr. Minkow’s revelation in jail as much as some people. I’m sure people in jail know that if you are on your best behavior you can get your sentence shortened, get parole, or some other benefit for yourself. Minkow is obviously a smart man and I will never know what his actual intentions were. I’m sure there is some truth in his change of character and he realized he had done something wrong and may have actually been sorry for it, but I also believe there is some conniving behavior at play as well. This may be a funny comparison, but it’s like a person addicted to drugs. A drug addict may go to rehab and get their life back together, but there is always a craving and underlying desire to do drugs again, which is why so many of them relapse. So figuratively speaking, in my opinon, Mr. Minkow is a fraud addict.
I do think most of us are bred from a young age to do our best and aim to succeed in everything we try and for most of us once we start succeeding and getting the feedback that we like it is hard to get torn down in even the slightest way. Starting from middle school you may be a great athlete but once you move up to high school you are just okay in the huge pool of students. You may graduate with honors and never make a B in high school and then you go on to college and make not a single A in your first semester. It is just natural to go through ups and downs in your life and career and the important thing that I think Mr. Minkow missed was learning how to recover and move on in a professional and ethical way. He wasn’t one to take failure or mistakes well and because of that continued down the “slippery slope” that ultimately ruined his reputation. Thanks for the great article!
This is another example of how a greedy individual exploited the trust people has put in him. I think the fact that Mr. Minkow became a Pastor and started working with the U.S. government gave people more confidence in him again.
I maybe wrong at this, but history is part of an individual no matter how their character change (in a positive or negative way). It may not represent the person’s character today but it tells me about the mentality of that person at a point in time. Mr. Minkow may have experienced a change in character when he chose to be a Pastor, but his background would still make me cautious and skeptical when dealing with him. I guess it is easier for me to make this call in hindsight but this is definitely an interesting case to read about more.
Thanks for sharing.
This article is very interesting because it brings to light how easy it is to not only gain trust, but lose it as well. Barry Minkow was able to develop a lot of trust with people prior to his first conviction. However, after being caught for cooking the books, the trust Barry Minkow worked so hard for suddenly disappeared. Often, when someone commits a crime of this nature, they have a hard time regaining peoples trust. Nonetheless, Barry Minkow was able to regain peoples trust by founding the Fraud Discovery Institute and bringing down companies committing fraud.
I think it is quite amazing how Barry Minkow was able to regain peoples trust even after committing such a grave offense. He was given a second chance to change his ways; however, he chose to make another bad decision that will eventually lead to some harsh consequences. I think Barry will have a tough time regaining peoples trust for the third time. Great Article.
Since I first saw Mr. Minko’s story a year ago I have been amazed and interested in his rise and fall. After reading this article I am in amazement once again. Although I am not suprised by Mr. Minko’s behavior, I am suprised he was able to gain the public’s trust again. I have always been wary of people who seek the limelight and believe his public display of “rebulding his life” was used purposely to regain the public’s trust. I think everyone can learn a lesson from this; not to be unforgiving but not to give people opportunities to commit the same offense again.
This begs the question: If you start to go down the ethical slippery slope, do you you ever really get back to the top? Minkow had apparently changed his life around, and for years he has supposedly been an asset to his community and to the audit community as a whole. Look how easily he fell again. Does this mean that he is just not very strong in character or that each unethical act we perform in our life, slowly wears down our ethics? Does it make the metaphorical slope that we are slipping down steeper, thus making it that much harder to climb back up? Or is this just one instance where someone tried to turn their life around and failed? It’s scary to think that someone you know or possibly yourself, could choose to be unethical in the hopes of personal gain. I would like to believe that I will never have trouble succombing to the temptation, but I am more aware now that I need to always be self-aware of my vunerabilities.
Maybe I’m naive, but I honestly believe that Minkow did change his life for the better after his first scheme. The most rewarding and enjoyable way for man to live is to forgive and forget; I don’t blame the community for moving on and giving him a second chance. Obviously, Minkow had some sort of ethical epiphany when he pronounced his faith and created the Fraud Discovery Institute and I believe he had made a change to his life for the better.
Everyone is faced with ethical dilemmas and many men would have decided the easy and economically beneficial route like Minkow did, even if it is not the right one; these men are probably some of the ones judging him for his actions now. Minkow is still growing and still learning the hard way from his actions, but “let the one without sin cast the first stone.”
I believe that you can’t force people to change, and I think this is a good example of that. A person has to want to be able to change their behaviors, and it seems greed and limelight kept Minkow from doing so. It is all too easy to fall back into your familiar habits rather than going out on a limb and taking a risk.
I do believe in second chances, but is more of a “Fool me once, shame on you; fool me twice, shame on me” mentality. So with that, I feel that people who did business with Minkow after his first sentence should have been wary, knowing what is he capable of. It takes little to break trust, and lots of time to build it back up. They should have kept that in the back of their mind, in a sense, being professionally skeptical while dealing with him.
I cannot be completely sure of whether or not his change for the better was a genuine one or not. It is tough to believe that anyone has changed when they crave the spotlight as much as he has. What I do know, however, is even if he did not genuinely change, he has been a productive member of society since his release from prison. He has been extremely valuable as a fraud detective and I am sure that he has impacted many lives as a pastor.
If it was a genuine change he has shown that everyone in our profession will always be susceptible to the temptations of committing fraud. Without someone that we can always be transparent with and that will hold us accountable, it will be extremely tough to ignore all of those temptations that are thrown our way. We must continually examine all of our actions to ensure that what we are doing is considered legally and ethically correct, or we will end up in the same boat as Mr. Minkow.
Although, I do believe Mr. Minkow was sincere in his coversion to christianity and in his path to help others, it seems to me that he became so caught up in the personal gain and limelight of leading others in the right direction, that he failed to look at his own life, and the unethical choices that he made. This is why I believe it is so important to step back and truly evaluate our own intentions and decisions to make sure that we are making ethical choices that align with our morals and character. It’s like my pastor always says, “I’m preaching to myself as much as I’m preaching to you, if not more.” In the end, Mr. Minkow failed to do the same, and as a result ended up down the same bumpy path that he had traveled before.
Barry Minkow’s quite public rise and fall from grace goes to show that we are all human and are constrained by the difficulty of truly wanting to change our ways of thinking. Minkow obviously felt some remorse for the fraud he had committed and attempted to right the wrong that he had brought upon so many people. His public display of rebuilding his life into one that embraced morality, and the frankness with which Minkow talked about his past actions, seemed to signal a change toward an ethical way of thinking. After this change in Minkow’s functioning, his most recent securities fraud may come as a shock to those who believed that he had truly changed his ways.
I believe that Minkow possibly did not want to strive to change his way of life and be morally courageous or else he would not be in the place that he is today. It is hard to change our way of thinking from one that disregards any sort of moral compass to one that embraces ethics as a guide to life, but it is not impossible. I believe that we have to want to be ethical people and want to reason as such, or else we will end up like Minkow whose brief period of remorse was another scam in itself.
I believe that Barry Minkow may have had every good intention to change and become a better person, but his lack of character stopped him from putting those good intentions into action. It takes a lot of courage to do the right thing. Most of the time the right thing is harder than doing the wrong thing. Everyone can have good intentions, but it’s your actions that show who you truly are. This was a great article!
As for Minkow, everyone wants to believe people change for the better, but as I do see his redemption as sincere, there is no changing the morals a person is instilled with from the beginning. Many of us start our identity at a young age with our parents and family and develop into the person we will be for life during our college years. Minkow started at the age of 21, and if he found it reasonable to promote his ambitions above others then, why not now? I may be taking the more skeptical and pessimistic side of the argument, but it only seems right in the world we live in today.
Great article and thoughts!
It seems that Barry Minkow knew that his actions would be accountable to both society and law, but I can’t help but wonder if he felt accountable to someone. Someone that would support Barry when he did something great and someone who would be disappointed when he did something wrong. Someone who Barry continually looked up to and sought for approval. A mentor or a figure. I believe that many of us take that someone for granted. Either a parent, minister or professor. But it is that someone which has and will continually shape our ethical minds that make us the man or woman we are today.
I really enjoyed reading a more compassionate angle towards Barry Minkow’s current situation. I can not be certain, but I believe that Minkow was sincere in his conversion to Christianity and that all people deserve forgiveness. Although Minkow’s return to fraud will require punishment according to the law, it is my opinion that the public should forgive Minkow for his crimes.
I agree when you say in your article that “we are all vulnerable.” It will take significant moral courage and faith for Minkow to rebuild his life, but it is never too late to turn back to what is right. In the words of Mother Theresa, ” With Him and through Him you will be able to do great things. But to be able to do that we need to pray, and the fruit of prayer is deepening of faith, and the fruit of faith is love, and the fruit of love is service.” If Minkow is willing to humble himself in prayer, then he will continue to be able to accomplish great things.
Thanks for the article!
I think that Barry Minkow was trying to be sincere when he drastically changed his life from being a manipulative fraudster to a devout Christian. However, I feel that he may have changed for the wrong reasons. He might have been doing good things just to stay out of trouble with the law, not because he felt it was the right thing to do. Internally, he was still inclined to commit fraud. It seems that Barry was always pretty self-centered, as he never hesitated to share his story and be in the spot light. Barry let his old ways take control of his life again because he never truly let go of them. It just goes to show that in order for a person to change, one not only has to do it externally, but internally as well.
After reading this post and many other articles on Barry Minkow, it is hard to believe that when he was first caught for the ZZZZ Best Fraud that he was younger than most college seniors. Even after all the criticism against him it is hard not to think of what could have been. Minkow had the intellectual capabilities to outwit professionals twice and maybe even three times his age, but yet he used those capabilities in the least beneficial way. It is hard not to think about the possibilities if he had used his capabilities to help mankind instead of devastate many lives.
It just goes to show the mentality that some people have in today’s society. These types of people are so caught up in self-promotion that they lose sight of what truly matters in life. Instead they focus on money and how they can make that extra buck even if it comes at the expense of hurting someone else. I believe that stories like this that really help enlighten students about the potential consequences of not using sound ethics and reasoning when making decisions.
While you are challenging us not to become cynical, honestly, it’s hard not to after hearing Barry Minkow’s story. I understand that everyone makes mistakes, and that we should all be given opportunities to right our wrongs. However, at what point do you lose faith in somebody? How many mistakes does somebody make before you no longer trust their intentions?
I don’t doubt that Minkow did change his life and become a better person. I also don’t doubt that he was an excellent husband, father and even pastor. However, I feel it’s pretty clear that he’s lacking in moral character and intergrity. The ability to lie on such a big scale not only once, but twice, is unfathomable to me. Maybe this time he really can change, but again, how many chances do you get?
Based off of the terms we keep using in class, it is clear that Mr. Minkow is an ethical egoist. Everything is about him and he is going to look out for himself first. This is evidenced through the fact that he has now committed yet another fraud. Perhaps the biggest question I have, relates to how he could have the audacity to commit this fraud when he is working with the FBI and claims to have been reformed in prison? That is not to say that I don’t think he could have been reformed, or that he isn’t, just how could he honestly have expected to get away with it?
Now, I am all for second chances and believing the best in people, but there has to be a point where enough is enough. Unfortunately for Mr. Minkow, I would say his chances are over. He has invalidated any trust that anybody, including his family could have put in him. Despite his actions and his reputation, I hope that he has another rebirth this time around and realizes that there are many more important things in life than money and power. Hopefully he realizes that his family is one of those things.
Good question, Tara. How many chances do you get?
I like to try to see the best in people whenever possible, but this case shows that once someone allows you to question their integrity it is hard to trust their character. It may just be hindsight, but I would probably have not invested in his company the second time around based on Barry’s past record. When it comes to finances, money can change people. It has been said never do business with family or friends, I would say never do business with someone of Barry Minkow’s nature. Everyone in their career will be presented a situation in which an ethical decision has to be made, and I would like to think most people have enough respect for themselves to do what they know is right. By choosing the option you know is wrong, you are not only hurting yourself but others as well.
It seems to me that Minkow’s first nature is self-promotion and using his skills to manipulate and force his hand. Obviously, there have been many people who have been convicted of crimes and subsequently turned their lives around. No question. But is there a psychological factor at work here? Many times the reason people cheat, steal, or lie is to satisfy a hunger for excitement or thrill. Minkow’s original fraud was so outlandish you would wonder if he was merely doing it for fun; like the child who consistently flirts on the boundary of what he can get away with when his parents aren’t looking. Maybe Minkow was able to subdue his urge to test the law for a while, but eventually ended up right back where he started.
I think Mr. Minkow’s case is fascinating. I’m sad to see that after having ‘straightened his path’ he fell into this behavior again, but I can’t help but wonder about his motivation. Clearly Barry Minkow is a brilliant individual, and one that must have known the consequences of what he was doing. So what happened? Did he just not think he would get caught? Was there some sort of personal vendetta against Lennar Corp so strong that he didn’t care? Or was it something else?
I think I agree that his change was genuine, and from what I can tell the accounting profession has learned a lot from him. The corporate world learned a lot about skepticism after his ZZZZ Best fraud, a lot about how fraud works after he spoke openly about how he did it, but what are we supposed to learn now?
When I read about cases like Mr. Minkow’s, it makes me sad to see how many people he has hurt in order to increase his own personal wealth. In class we talked about how many people commit fraud because of their family but it seems to be that Mr. Minkow in the past and present is only concerned about one person (himself). While his actions damaged individuals and organizations, they also reflect badly first of all on his family who is supposed to have taught him what is right and wrong (an apple never falls far from the tree), and then his associates (birds of a feather flock together). We talked in class about how hard it is to rebuild a reputation and image once it is damaged and so now everyone is wondering what will be the next step.
I would agree with your assessment that those individuals who crave the attention and success that often leads to fraud should be watched. However, I would also counter that those people who are always silent should be watched as vigilantly. If we only look for fraud in places where the light shines then you will miss all the corners.
Barry’s story has taken a turn out of redemption and may inspire others to not give second chances. However, it should rather be a story to encourage those in receipt of a second chance to remain strong in their conviction and reject temptation.
I always try to give someone the benefit of the doubt, and I would have completely believed Minkow was a changed man had this relapse not occurred. An old phrase comes to mind: “Fool me once, shame on you. Fool me twice, shame on me.” Maybe the US government should keep this in mind during his trial. I have no reason not to believe that if Mr. Minkow gets away with this, he will commit some other fraud at his next opportunity.
I think you really got to the heart of the matter when you mentioned Minkow’s love of the limelight. It often makes for a much better story if things are embellished just a tad. But then the lines become blurred, and it’s easy to lose sight of the truth. So where does it stop – the lying, the embellishment?
This story also reminds me of the saying that “old habits die hard.” While I understand the skepticism of many of my fellow readers regarding whether Mr. Minkow ever truly turned his life around, I tend to err on the side of compassion. It is my honest opinion (without knowing the man personally) that he was truly attempting to turn his life around. I simply don’t see his actions after the initial conviction as some orchestrated scheme to regain trust and once again use it to his personal advantage.
I see Barry’s enemy as a gradual descent into complacency. Over time, I believe he began to think he was completely “rehabilitated.” It’s like an alcoholic believing after several years of sobriety that alcohol suddenly no longer poses a threat. This comparison is, of course, based on the assumption that unethical behavior of this magnitude is a result of some innate character flaw. At any rate, it will be interesting to see if (and how) Mr. Minkow will ever be able to regain the public’s trust.
It seems to me as if Barry Minkow is addicted to the thrill of committing fraud, much like an alcoholic is addicted to alcohol or a shopaholic is addicting to shopping. The first time around most would assume he was in it to make money, and make a lot of it at that! But now, after becoming “sober” it seems like he has “relapsed.” I believe most doctors who treat addiction patients say it is very common for a person to relapse and eventually come out of addiction again for a second time. But will Minkow follow this addiction trend? Only time will tell. It is up to one person, and one person only, to rise above the trend, and that is Minkow himself.
Would I personally trust him with my money? Well, that’s kind of like asking yourself if you would trust a shopaholic with your credit card; probably not. Eventually do I think he can beat his addiction to turn around and become an even better person, husband, and father? I’m not sure, but for his and his families sake I hope so.
For some reason I do not compare Barry Minkow to all of the other men and women we have studied about who have struggled with ethical dilemmas. I don’t see him as an example of someone who fell down the slippery slope of bad decisions, and who ended up serving his time and learning from his mistakes. He was convicted of fraud for the first time in his early 20’s soon after joining the workforce, became a preacher and involved in assisting the FBI, then fraud again? I think that he his story is very different from the others we have learned about who committed fraud over a number of years and almost followed the fraud triangle perfectly. Barry Minkow to me is just a criminal who tried to make himself a better human being by helping in his church and the FBI for a number of years then went back to his ways. I do not think that he can ever be trusted again, and personally I think his prison sentence should be longer this time.
Reading about Barry Minkow reminds me of the importance of developing professional skepticism. Before finding out about his new scandal, I most likely would have thought a man who is a pastor of a church in my own religion and has dedicated his career to stopping fraud can obviously be trusted. Barry Minkow’s life is an incredible story of redemption. What I now see as signs of an ethical egoist, I may have perceived as harmless personality traits. The tragedy of Barry Minkow’s fall is a reminder that I must continue to develop professional skepticism. As you said, we all are vulnerable to make a tragic mistake.
I agree with an earlier post that referred to Minkow as an ethical egoist, meaning he is more concerned with consequences than duties. We’ve learned that duties are better at restraining behavior than consequences because they come from within, but it doesn’t appear to me that Minkow’s changes occurred within. As much as I would like to believe that his spiritual conversion was genuine, in my opinion it seems that it was more of a publicity stunt. It’s possible that the new lifestyle he adopted was just another ploy for self-promotion. I do believe in giving people a second chance, but it is people like Minkow that make it very difficult for me to not be cynical.
This was an interesting story. I completely agree that is going to be important for us to use professional skepticism as we go through life. For me it is hard not to see the best in others and always believe they can change.
I think it’s sad how Minkow spent years building trust with others and now its been destroyed all over again. I think that your reputation is very important as you go through life. The core to having a good reputation is by having good character and a strong set of morals that are behind your actions. I really want to believe that Minkow tried to change how he lived. Maybe he was able to bring good moral principals into his life but they were not strong enough to stop him from committing fraud again, or maybe he never really changed in the first place. Either way I think it is important for us to allow others a second chance, but not to completely wipe the slate clean of their past actions.
It’s amazing to me how we can all fall into temptation whenever we truly “look out for number one” instead of looking out for others. Minkow seemed to have really changed, but the fact that he continued to look out for himself before the needs of his family, friends, church, etc. was eventually his downfall. It’s not easy to change who you are, but I feel like after spending some time in prison and embarrassing every person in your life that you could have some self-control. He seemed to have it all after he found his faith, but instead of just relying on that faith he sought out the reward that never lasts or gives true happiness. And for that he will be spending time in prison once again. Hopefully after he gets out this time he will think about the possible consequences his actions will have on his life, family, friends, and career.
Stories like this are when I really begin to think about trust issues. I tend to like to see the best in people, and give second, third, and even fourth chances. However, being an accounting major has really altered my opinion on this. From learing about scandals from Enron all the way down to little petty crimes, it amazes me how many people in the business world cannot be trusted. I’m not saying that I still don’t try and see the best in people, because to begin with I do, but once someone has done something to alter my trust, it’s hard to gain that back. The Barry Minkow ordeal is one that gets me every time I read or hear about it. The man seemed to have completely changed his life around and make good out of the bad that he did. It’s a story that would make me believe again that people really can change, and the non-accountant me comes into play and starts to feel for this guy, With the recent charges made on him, however, the accountant in me comes back out. Professional skeptisism has never been more important in the envorionment we are in. Being wary of the people you are doing business with is very important, but it is also important not to completely grill someone and think of every worst-case scenario. That could lead to down to a slippery slope, just as well as having too much faith in someone.
Dr. Shaub,
After reading this blog and reflecting on topics you have discussed in class, I find myself trying to figure out when the best time is to release ourselves from skepticism and embrace the idea that someone is, in fact, honest. Even though I knew the end result, while I was reading I found myself hoping that Minkow turned over a new leaf.
As children we are often told to try to see the good in people even if it is hard to see past the bad and society often tells us to consider the psychological factors that contribute to the actions of wrongdoers. I think the importance here is the need to separate between personal and professional skepticism. I acknowledge that we are all vulnerable and should be conscious of those ethical egoists in and out of the professional environment, but I believe that there is a certain level of skepticism that needs to be left at the office in order to fully embrace those who are close to us.
Thank you for your insight into this matter.
The story of Minkow’s manipulation is a very interesting one. He was not incredibly talented at hiding the fraud within his company, but he held the ability to envelop people’s belief that he would never commit fraud. By befriending the wives and families of his auditors, Minkow was able to remove any doubt of the financials of his company by substituting the trust in the numbers with trust in him. A man that was able to keep up this charade for such a long period, the whole while knowing the effects of a fictitious business on its stakeholders, was bound to use his expertise again. The taste of power Minkow experienced from his fraud with ZZZZ Best was not forgotten and got the best of his decision making process when the opportunity to profit arose again. I foresee many drastic changes to legislation and rules to curb the ability to so crudely manipulate the market for personal gain.
What I find the most interesting about stories like Barry Minkow’s and other white collar criminals, is the punishment they receive. When Barry Minkow was originally sentenced in 1988 he was to receive 25 years in prison and 5 years probation for costing investors and lendors over $100 million dollars- he was released after 7 years. 100 million dollars?! If a person walked into a bank and held a gun up to the teller, they maybe walk away with $10,000. But because they threatened someone’s life with a gun, they end up spending two or three times the amount of time in jail than a criminal who stole tens of millions of dollars from hundreds of people. But what about the victims of white collar criminals like Minkow or Madoff? Their financial security has been taken from them, and the individual that stole their money walks away after less than 10 years in jail.
I think their is definitely a disconnect here. It’s almost as if we congratulate these people for being smart enough to fool everyone. I guess anyone could walk in to a bank and demand all the money at gun point, but not everyone can create an intricate Ponzi scheme and dupe investors out of millions.
I agree with Ashley’s post, it does not seem right to let somebody that stole millions should have a easier punishment. Granted that the white collar crimes usually do not put other peoples life at risk, like the bank robbery example. It makes me think about Mr. Fastow. He was able to earn around 50 millions but only gave up 25 million and spent 6 years in prison. He is still coming out on top in my opinion. Sure he lost 6 years with is family and put then all through a hardship, but they now have the rest of their lives to recover and $25 million will help im sure.
When I read this story I feel for Barry Minkow’s family and friends. I think the ultimate cost of his actions will not be his jail time, or court mandated restrictions, they will be the pain and suffering he has caused his loved ones. I am sure his family and friends agreed that he was a changed man, because of his actions and demeanor and were hoping he learned from his lessons. They lent trust a second time to a man who had already broken their trust once, only to be let down again. As the saying goes “fool me once, shame on you; fool me twice, shame on me.” I feel for them and the embarrassment and resentment they must have towards themselves for being tricked again, and I also feel for Barry because something obscured his vision from what really matters in life.
After reading the blog and comments, I noticed it was difficult for me to agree with the other comments regarding never trusting Minkow again. I do not believe in the statements such as: “people can’t change” and “once a cheater always a cheater.”
We’re taught to have professional skepticism and to know that risk increases with companies who have committed fraud in the past. However, when a company commits fraud, our skepticism might increase, but we do not automatically assume that company will commit fraud again. Why is it easier for people to automatically assume that because a person commits fraud they can never be trusted again? It seems easy to label a person as a felon and say things such as “you can’t believe a word he/she says.”
I do not agree with all of the actions Minkow has committed, but I believe he has the desire to overcome his weakness of self-improvement.
It was very encouraging to read half way through this story and learn about a man who made a very terrible mistake, but then turned his life around and used his mistake to promote good. It disheartens me to learn that this same man again fell prey to an unethical decision. This is a constant reminder that none of us are perfect and can all easily make mistakes, repeatedly. I hope that Barry Minknow can once again find a way to turn this mistake into good and learn from his past.
I completely agree that Minkow will face new struggles with his family and friends this time around in jail. Having been trying to prove for half of his life that he is a new, honest person, and then to be convicted again is a hard mistake to live with. I almost think that instead of Minkow starting the Fraud Discovery Institute and being reminded of fraud every day was the wrong path for him to take. Maybe he should have stayed away from the “fraud” subject altogether just in case he ran into a new idea that would tempt him to go back to his old ways. It looks like that is what happened in the end. Hopefully his second time around in jail will teach him, but I am still pretty skeptical.
This blog is exactly why I sometimes have trust issues and also how it demonstrates why professional skepticism is going to be important as we all enter into the real world. Mr. Minkow indeed was a very intelligent man to have pulled off the scam with ZZZZ Best, but what was even more amazing was how he was able to pull it off again after regaining the trust of the people he has associated himself with over the years. It kind of makes me wonder if the so-called revelation he had while in prison was just an act that he had been building up over years to re-gain the trust of society only to commit another fraud. On the other hand it could have been completely real transformation, and times got tough and he reverted to his old ways. Either way he was able to help the FBI in several Fraud investigations along with teach other young individuals about uncovering fraud.
This is always tough for me. Whenever I hear stories like this (bad good bad), it makes me question whether or not he truly was a believer. But to become a pastor, at least in most cases, you have to at least show that you know the “right answers.” So again I go back to I know we all screw up, becoming a believer does not make you stop sinning, although you will know them by their fruit, which maybe he did have fruit. I guess it’s not our place to judge ones salvation.
Another thing when I heard about this story I try to think about how I would have handled it, or how I have handled situations that I could compare what he has done. I know that when I was saved, God made it possible for me to completely get away from those activities which were pulling me from him and that I knew were wrong. I also knew that if I put myself in situations where I would be around those temptations, I would give in, and so I stayed away, at least until my relationship with Christ enabled me to finally overcome those. I would like to think that Barry would have done the same thing. If you know that something causes you to stumble and is not a good thing, why not stay away from that? I understand that he may have wanted to teach others from his mistakes, but he ended up looking somewhat of a hypocrite – how does that give hope to those who have done bad things in the business world?
Reading this blog, I was really saddened by this turn Barry Minkow’s life has taken. I would like to say that I am completely and totally shocked by his dealings with Lennar Corp., but I am not. It’s not that I am a cynic and don’t think people can turn their life around – actually the opposite. I absolutely think that someone can turn their life around, but it can be a difficult and long process, and it is very hard to keep from slipping into the old habits and ways. It is like a recovering alcoholic. The person has to go day by day, and it is not completely unusual for someone to fall off the wagon for a time. It is that the person gets back on track. With Minkow, I hope he does get back on track, and doesn’t commit anymore fraud. However, like other people have commented, even if he does get back on track trust will be a huge issue. It is hard to give someone a third chance when they blew their second one. Minkow is likely going to suffer some serious repercussions in his personal and professional life.
In reading this I am disheartened by all the wrong that was done, but in turn one should also look at the bright side of this life lesson. We were given the chance to learn from this compulsive schemer. He taught us so much about how to catch people like him and also he gave us a chance to apply what he taught us in catching him a second time. Also he taught us never to take things or situations at face value. He hurt a lot of people, but he also gave us a glimpse, well really more than a glimpse because he loved talking about himself so much, of how his brain works and how people like him really think in situations. I really don’t think he ever thought he would be caught again.
It’s not my place to judge Minkow for his actions but I can say I don’t believe it was the right thing to do. He was lying, cheating, and stealing and all of those are wrong. Sins are sins and I don’t believe there is any sort of ranking system for them. We all sin everyday, it just so happens that his was publicized to the world. I don’t believe his actions are any worse that someone cheating on an exam. I believe that he truly might have changed for the better but when you’re faced with these ethical decisions, sometimes your aspect of humanity can get the best of you. Fame and fortune are becoming overbearing aspects of our lives during this age in time and I think it’s a problem that society has created as a whole. We have all committed the same sin twice, but does this mean we should never be trusted again…? Just a thought.
It truly saddens me to think that a man who had the worlds attention was unable to handle the temptation and fell from grace a second time. But i do not judge or condemn him for his actions. Certainly, what he has done in the past and the present is wrong, and therefore, consequences should be administered, but i do not believe that his actions reveal some kind of sinister inner character. Indeed most of his work since his initial incarceration has been nothing but beneficial, helping to stop others from committing the same mistakes that he did. But much like with any addiction in this world, the temptation always exist to take the road that might not ought to be take. I agree with Dr. Shaub that this story reveals no one is exempt from the temptation to benefit ourselves by illegal means. We must remain vigilant in our quest to stay on the right path and always stick by our moral code, else we will fall and fall hard.
I think it is important to hope for the best, but expect the worst. In the accounting profession, we are called to be professional skeptical. Just because people change for the better does not mean they will not have temptations to fall into old ways. I feel extreme sympathy for him and his family. I think it is important to always have someone mentoring us and someone to always keep us accountable. It is so easy in this life to rationalize the things we do, but if we were to only talk tough decisions out with someone we would see that our rationalization does not make much sense at all at times.
I am not judging Barry- we have all done wrong in our lives, it just saddens me the turn for the worse he made after so much improvement. This is a great lesson for us, especially as young professionals, of how easy it is to get caught going down a slippery slope.
I agree with the fact that individuals can change who they are and make amends in their life. In the case of Minkow I feel he made a genuine effort to correct his life, and start a new. I even think he had a sense of guilt which can be seen by him starting the Fraud Discovery Institute as a way to balance out his actions. However, having said that I am not surprised that he caved into the temptation to commit fraud once again. I think for individuals like Minkow it becomes more than committing a crime. I think it gives them a sense of empowerment, and a feeling like they are untouchable. Most people do their prison time, learn from their mistakes, and the justice system serves its purpose. However, I think what we learn from habitual criminals like Minkow is that punishment is not always enough to deter the temptations and emotions they experience when they are committing a criminal act, almost like an addiction.
I am not sure that Minkow made those changes in his life for the right reasons. Obviously his release from prison would be big news, but him becoming a pastor and starting the Fraud Discovery Institute? Sounds like he was looking for publicity. Don’t get me wrong, I originally thought he had changed, but once it happens again, all of that faith disappears for me. It’s like the saying, “Once a cheater, always a cheater”. I think it is extremely difficult, though possible, for someone with ambiguous morals to change, but it is something they will have to work on everyday for the rest of their lives. However, I also believe it is very easy to fall back into old patterns; it is what is comfortable and can be rationalized. That seems to be exactly what has happened to Barry Minkow. Or maybe he was just ready to have the spotlight back on him…
Barry Minko’s most recent scandal is tragic. This should serve to remind us that anyone is susceptible to acting unethically under particular circumstances, regardless of their previous experiences and the upstanding person he or she has become. I do believe that his first infraction and commitment to his faith changed who he was on a fundamental level, but it was not enough to save him from the temptation of greed. This relapse may be attributed to multiple elements in Minko’s life including other’s over reliance on Minko’s trustworthiness, his lack of an accountable support system or a personal feeling of omnipotence and invulnerability. It is important for us all to remember that those around us, as well as ourselves, may disregard experiences and values to act unethically if not carefully held accountable.
Barry Minko’s professional life as a fraud perpetrator or preventor look as if he is someone who is very susceptible to egocentricism. Although I can’t dispute whether or not he did have a change of heart following his first stay in prison, the most important lesson we can learn from Barry Minko is that none of us are immune to greed and vulnerability to our weaknesses. It’s no doubt that Barry Minko’s weaknesses lie, as you have said Dr. Shaub, in his love of self-promotion. It might even be that self-promotion that causes him to revert to cutting corners and damaging his already shaky reputation. In the end, I don’t think that it is a matter of money or material possessions that cause each of us to face a similar ethical dilemma as Barry Minko. I think it’s something much deeper within us that will always cause us to hesitate when faced with a hard decision. For this reason, I think it’s important to remain humble and find those who will keep you such because you will invariably find a way to find excuses and circumvent the truth.
It’s hard to watch someone completely turn their lives around and then once again fall victim to the lifestyle they were a part of so long ago. I would love to hear a more detailed story of why he thought it would be okay to act on inside information, especially after working so closely with the FBI and his fraud institute. Not only is this an inspiring story for you Dr. Shaub, but also for many of us as we graduate college. None of us really know what it feels like to be put in the spotlight and to have a feeling of such power. It is important to learn from the mistakes of others when we can’t put ourselves in the same shoes. As I have learned from Barry Minkow and from many of the class presentations, no matter how ethical we think we are, we can all easily fall victim to the pressures of the real world we are about to be a part of. We will no longer be able to claim ignorance as we have growing up, but will have to take the responsibiltiy for every action we make.
It’s difficult to not remain cynical after reading Barry Minkow’s story. I cannot say whether his attempt to turn over a new leaf was not a sincere one, but I cannot help but to question his motives. Yes, everybody makes mistakes, but when you see the same person making the same mistake over and over again, you can’t help but question their intentions.
I think this re-emphasizes the importance of maintaining a healthy level of professional skepticism. Instilling too much trust can expose us to harmful vulnerabilities. Although we try out best to remain optimistic and look for the good in everyone, we have to remember that everything isn’t always what it appears to be.
In the case of Barry Minkow and many other fraudsters that I have seen articles on, it seems like there is a recurring theme based on motives, but not necessarily personality. They all had a great vision of themselves and what they expect themselves to become. When their business got shaky or an opportunity like insider trading presents itself, they folded and it became clear that they would do what it takes to reach the success that they always wanted.
I have seen fraudsters that weren’t self-promoter type personalities but were just highly motivated by a vision of riches. There are a number of flashy camera-loving type people as well. As a professional, it is important to mind people’s motives and to have good skepticism.
Minkow sets many examples. He is an example for people who believe that “people never change” and he is a great example for the thought that everyone’s calculation can change depending on the reward. Minkow is vulnerable to fame and fortune and apparently is willing to sacrifice everything to attain more and more of those two things. It is hard to continue to have faith in people when he is an example of someone who falls so susceptible to sin, but then again don’t we all? Among other things that are unfortunate as a result of his mistakes, he will likely never be trusted in the business world again. When he does leave prison for the second time I think he will find that his life and circumstances have changed a lot more drastically than when he left prison the first time.
After reading this post as well as the article given in class, I wonder what was Barry Minkow’s rationalization. He seemed to have it together with family and career and then made a choice to jepordize all he had achieved after being released from prison. I believe mistakes are meant to be learned from, not repeated. I know the “right” choice is not always clear and it can be the toughest part of making a decision. In class, we have discussed that it takes courage to act with integrity and it’s sad and disappointing that Barry Minkow did not.
Barry Minkow’s story is a sobering reminder of the general depravity that we as humans face everyday. It is not our job to judge whether Minkow’s conversion to Christianity was genuine or not. It may very well be, and perhaps his issue with Lennar is only a temporary setback. We can only hope.
Regardless, the incident is a clear exhibit to the potential destruction of selfish ambition. It is so important to have true friends in your life that care about you enough to call you out and pull you from the edge of a precipice that you may not see yourself heading towards. We need people who are not impressed with us in order to keep us in check and give, in this case, a much-needed dose of humility. Nonetheless, I am a believer in grace, and perhaps this incident will humble Minkow enough to bring about real, genuine life change.
It seems to me that Barry Minkow probably did have a semi-revalation of sorts. He realized that he could be more succesful by helping the FBI than by trying to defraud them. If he was truly evil and depraved, he would not have spent years helping the FBI to catch fraudsters. He was just a guy who looked out for number one, in my mind a pure ethical egoist. This latest fiasco just seems to have been a poor consequentialist calcualtion on his part. He thought that he would be best served by insider trading, but ended up losing his entire reputation. I would not be surprised at all if later on in the future there’s an article saying he’s back to helping the FBI catching criminals, because he’ll go back to what he knows will bring him success. And if he’s really as good at catching fraudsters as he appears, the FBI might just continue to use him.
When Mr. Minkow committed his second fraud he obviously thought that he would not get caught. I wonder how many others have done something wrong, went to jail, got their second change and reverted back to their old ways but this time never got caught. People may see this as a human triumph, as someone turning their lives around. But in reality, there was not change, they just did not get caught. However, there are also people out there who really do turn their lives around, many so after finding faith in something greater than themselves. Maybe Mr. Minkow was one of these people who had a real change of heart and he just slipped up, or maybe he never changed at all. Who are we to say if there ever was a change of who Mr. Minkow was or not, or anyone else for that matter? I am just glad that on judgement day, it is not my duty to make the judgement.
After reading this post, the saying “forgive and forget” comes to mind. Most of us are taught to forgive others for their wrong doings and to forget that it ever happend and to trust them again. As auditors, our job is not to “forget,” but to have professional skepticism especially in situations like Mr.Minkow’s. Past behavior is usually indicative of future behavior, and that is not to say that people who make mistakes can never be trusted, but in the business world we need to keep in mind that it could mean just that. Mr. Minkow committed another fraud after everyone started trusting him again, while it seems cruel not to give someone a second chance who appears to have turned their life around, it is still not a smart or professionally skeptic business decision. I hope that he can change once more for the better and see the error in his ways, but it will be hard for him to regain the trust of others a second time around.
Barry Minkow’s story is a prime example as to how important professional skepticism is to us as we enter the real world. While I do believe that his becoming a Pastor and attempt at stopping fraud were real, his involvement in a second financial scandal does make me question the realness of his conversion. I don’t think that I would probably have even suspected Minkow of such a financial scandal again, which makes me think that maybe he was just fooling us. As the auditors, clients will try to trick us into believing that numbers or methods used are correct even when they aren’t, so it is essential that we establish a healthy sense of professional skepticism in order to prevent harm to the shareholders.
I really enjoyed this piece. I have seen the video on Minkow and I am just amazed at how smart the guy seems to be. I mean who could think that this “boy wonder” would be cheating the system. I just wish he realized sooner how smart he is and used his talents from the very beginning to do good things for society.
I tend to take the position that people can change if they want too. However, it takes a lot of hard work and determination to start doing what is right. For a while it seemed maybe his fraudster days were over, and that maybe it was all just a young man making a big mistake. But with this new news, it seems that he didn’t want to make the harder right and fell to the dark side. A saying I really reflect on is “Success doesn’t make you and failure doesn’t break you”, it really hits home and just proves that success isn’t everything and your faults aren’t either. We all have the opportunity for a second chance and should make the most of it.
This piece really slams home professional skepticism. With the extremity of ZZZZ Best scandal you can really see how important it is that we perform our due diligence and don’t just take the Company’s word. The other reason it impacted me on that point was the fact that Minkow deliberately misled people twice. Even though people thought that he had changed to become a genuinely good person, church member, and a family man they are still capable of making those poor decisions. That is something that I will definitely take going forward to my future.
It is very interesting to me how much people overrate the change in a person. I think it is very easy to change your actions, but very difficult to change your motivations for what you do. Barry Minkow was clearly an egoist when he formed ZZZZ Best and did so only to commit fraud and make money. After he got caught, he became an enlightened egoist. He strived to find exactly what he had to do for preservation of his name and the ability to do what he wanted. I believe that people can change, but I don’t believe people can change 100% of who they are. Human beings as well as all creatures on earth adapt to the situations around them so that they can survive. We rarely see someone change for the worse, and if they do change for the worse they usually hit rock bottom and then revert back to their old self. I am a firm believer in second chances, but second chances will inevitably open the door for people sneak in and hurt us again. While I think the situation in unavoidable, I also think it far outweighs the alternative of no second chances. The best way to protect yourself from someone like Barry Minkow is to make sure you always hold everyone accountable for his actions at all times. Trust is something one earns not something one deserves.
As many others have said, it is very discouraging to see Minkow’s return to illegality. It’s seems like it’s almost an addiction, really. It’s just shocking that he would committ a crime of this nature, so many years later. It makes me wonder who you can ever trust – as it was discussed, Minkow served as a pastor, even founded the Fraud Discovery Institute – both things that you would think to be contradictory of a man convicted of insider trading and other fraudulent activity. Can people ever really change – or was this just part of Minkow’s plans – deceive those watching to appear as though he had changed, just so that he could committ a similar crime later? I also find it interesting that Minkow has been referenced as being transparent – how did this happen again then? Can people not see through his ill-motives? I think this is a great example of why we need to remain suspicious as auditors, and practice our professional skepticism wholeheartedly. You can never be sure of someone’s character, especially if they’ve committed a crime before apparently!
This story is very sad. People who fall have the greatest chance to have a positive influence if, or when, they are able to turn it around and return to the right track. Barry had every sign of learning from his mistakes and changing his life around for the better. As I contemplated this article I kept asking myself why did he do this? He had a loving family, was in a place of influence, and was seemingly making a positive difference. I think that while Barry Minkow was pouring all of this time and knowledge into others, it needs to be questioned if he was himself being poured into. Anyone, regardless of statue or leadership, needs to have others hold them accountable as Dr. Schaub said. I think at some point you have to look at Barry Minkow’s life and realize that his accountability must have taken a lapse, otherwise he would have still been rooted in the truth that he found to govern his life while he was in prison.
After reading this topic it reminded me of one of your earlier topics discussing how one moment of weakness can cause a persons demise. I feel that Minkow’s spiritual conversion is likely to be genuine, but we cannot be to quick to judge someone, because we do not know their hearts. If Minkow did not have guardrails in his life to keep him on track, I think he could have very easily got caught slowly slipping back into his former sins. It is important for people in any sort of power to maintain healthy accountable relationships, because no matter how strong we are ethically, we can still easily be taken down by our sin nature. Without having proper support and accountability, just like Dr. Shaub has mentioned so many times in class, we are all susceptible to fall.
The story of Barry Minkow will make a great movie. The story of a conformed criminal who has turned his life around and quit his life of crime to work with and help the people who put him in prison in the first place. Hollywood would love this story, but in the glossy Hollywood version the tale of Barry Minkow would stop there; with Barry emerging a hero who had changed his ways for the better. We as viewers like to see that people can change and a life that once seemed ruined can be salvaged; the writers and directors would shield us from the harsh reality of Minkow’s relapse in to crime because we don’t like to see the harsh reality that we are all vulnerable.
I agree with you Dr. Shaub that Barry Minkow’s spritual change was legitimate. I believe he had every intention of following the straight and narrow, but at the end of the day temptation got the better of him. I think Minkow’s craving for the the spotlight and greed coupled with opportunity led to his (second) demise. LIke people that suffer from addictions to things such as drugs or alcohol, those who keep them accountable know to prevent them from being in a situation where they are exposed to their vices. They know that in a moment of vulnerability they could go down that road again. Who was keeping Barry Minkow accountable? He was in a position, as a fraud investigator, where he was surrounded by his vices (attention and money). This constant exposure could tempt him to commit his past crimes. He is only human and could only resist temptation for so long.
It is extremely hard for people to change. Once you cross that line, it is way too easy to make the same mistakes again. I think this article provides an excellent warning for young students, and reminds us of the importance of professional skepticism. Thank you for this article!
“What I take to heart for my own life is that we are all vulnerable”
This was a great post Dr. Shaub, and I have always found the life and stories of Barry Minkow to be very interesting. I loved the last part of you post (which I quoted above) about how we are all vulnerable, and must take caution when when are put in the lime light during our career. It is very easy to sit in an ethics class, and hear stories about these executives who have committed fraud and have the reaction of “I would never do that!” In reality though, most of us have never even come close to experiencing the pressures and motivations that occur when we are placed in a situation like Minkow. I know its very easy for me to judge these people and pass them off as theives or idiots, but I must not forget that I too am vulnerable. At this stage in my career, I must focus on developing my own personal code of values and ethics, so when that time does come, I make the right decision. The pressures will surely be great, but I hope when that times come that I am well grounded in my values and faith, and don’t hesitate to do the right thing.
Barry Minkow has struck me as a very peculiar man. He is the perfect example of how easy it is to let that vulnerability get the best of him. He started off his career on a path miles away from anything ethical and was then able to realign himself to not only a man of morality but an influential leader. As a student who has minimal experience in a high-pressure environment, it’s hard to imagine how someone like this could fall back into that dark hole it took so long for him to get out of. Things like this scare me as I know most, if not all, of us will come into contact with situations where we are one decision away from a life we never wanted to live. I can only hope that we can take the harder right and stay focused on what we truly know and believe to be right.
I agree in that I don’t think we should look at Barry Minkow as an isolated case. Cheaters will be cheaters. I do however, believe that with the proper will power, faith and guidance one can indeed change for the better. While the Minkow story is a very peculiar case, I do think we can take something from this incident. One thing I’ve learned from reading about the insider trading cases every week in the WSJ, is that these individuals who commit fraudulent acts appear to lead very conventional and oftentimes respectful lives. Like many have already said, appearances can be deceiving. However, I don’t think the gut feeling skepticism necessary to detect these manipulative personalities can ever be taught in a course. This is something we must learn from our experiences in and out of the work place.
I can think of a time when I was wrongfully deprived of deposit from my landlord. While I don’t think he was necessarily attempting to manipulate me, I did learn from this experience. As a result, I now read the fine print in the lease, properly document all previous damage, and keep copies of everything. It’s small things like this that help us prepare for this dog eat dog world.
Barry Minkow sounds like one of those people who, we think, can do no wrong; their charm and charisma mesmorize us, and we let our guard down. This speaks to the importance to auditors of practicing professional skepticism. However, the more important lesson to be learned from this story seems to be that we are all susceptible to falling into the same temptations as Barrow Minkow. I do not think he’s a sociopath. I think he is someone who caved in to the pressure — and then again. We are all vulnerable to this. Dr. Shaub, I love what you said about accountability. It is truly so important to have people in our lives who hold keep us accountable for our actions — people who can prevent us from veering off the right path. Accountability is a hard thing; it’s not fun for either party, but it is essential. Thanks for reminding us about the importance of accountability.
It is always a powerful beacon of redemption when a fallen man decides to rise from the ashes and stand for good. The unfortunate aspect of this situation is the fact that nobody put faith in Barry Minkow before he was caught in his fraud; it would make perfect sense that he cheated to make ZZZZ Best the success that it was. After Minkow turned it around, so many put faith in the idea that redemption is possible: unfortunately Minkow symbolized that idea. I sincerely hope that with the second fall of Minkow, the idea of redemption did not fall as well.
The two biggest points that stood out to me in this article were “professional skepticism” and “accountability”. It’s clear the Minkow fooled many people in business and in life. It’s crucial to remember the importance of professional skepticism when I start working full-time as an auditor. The duty I will have to be independent is of utmost importance while providing unbiased financial opinions to the public. To me, accountability is the acknowledgment of responsibility for ones actions. This is important to me not only for my future in business, but in life. To live a life of virtue and integrity, I feel like accountibility is very important.
This post is definitely a very unique and interesting story. I think it really highlights the everlasting question of can people really change? Obviously there is no right or wrong answer to this but both points can be strongly argued. I believe that although everyone makes mistakes, there are certain ways to handle them that will actually benefit you and shape you into a better person. I believe that if you can stand up and admit you made a mistake, although it does take a lot of guts and does earn you some respect, unless you actually LEARN from your mistake, admitting it is almost worthless. Making mistakes is something we all do and its a part of growth and learning about yourself. I believe that once we do something wrong we should use the effects to improve ourselves as people. Although Minkow seemed to show that he had learned from his mistakes and made the appearance that he was back on the right track, it seemed to just be for looks. Not do doubt his faith or his help to others, he is just a prime example of admitting you were wrong but not really making a conscious effort to avoid situations like that in the future or upholding your new change of character.
This blog serves as excellent advice to all of us that are soon to be entering the work field. I think it truly shows that any of us could be vulnerable to bad investments or deceived by people who we thought had “good intentions.” My own father always warns me about this, reminding me that when something sounds too good to be true, it probably is.
A couple of years ago my father was exposed to a Ponzi scheme. A guy he worked out with at the local gym in the morning had been scamming people for years. He was a leader in his bible study, had a great family, and was popular in the community. He would talk business at the gym trying to get people to invest their money with him. People felt special if they were asked to invest with him. He approached my father and another neighbor several times, but my dad was not interested. After a while, he began to think something was up, and after doing his due diligence, he also advised my neighbor not to invest. The guy was ultimately busted by the IRS and is now going to court. He scammed his family, friends, and many other people around the community. My father told me this story to remind me to always do my due diligence and to be careful throughout my career. Having heard this story really emphasized that we all can fall victim to similar situations throughout life.
This blog entry to me reeks of ethical egoism; Barry Minkow loved the spotlight and was always self-promoting. Regardless of whether his conversion was genuine, I think this unfortunately speaks to the increasingly “me first” culture we live in. I often find my professional skepticism crossing into unnecessary cynicism, though it’s hard not to when we are bombarded on television daily with shows and news programs about people who are doing anything and everything for their 15 minutes of fame (Balloon Boy, Jersey Shore, etc.). When people go out of their way to help me, I always express my gratitude. Although a very small and simple act, I guess it’s my way of trying to counteract the ethical egoist culture.
I am a firm believer in that people have to earn your trust after they have wronged you. It is like when we were in high school and would miss curfew one night or get caught up in a lie with our parents (not that I ever did that). It would take quite some time to earn back our parents’ trust. Maybe Minkow had earned back everyone’s trust, but, at the same time, shouldn’t everyone have maintained some skepticism, and kept a closer eye on him? I do feel that people can change for the better. Look at the people who overcome drug and alcohol addictions. Through supportive families, friends, and even co-workers, these people conquer serious addictions, and become changed for the better.
With regards to his self-promotion, I have found that these people will do whatever and destroy whoever it takes in order to get into that limelight or fulfill their self-advancement. I have dealt with “friends,” and their parents attempting any means necessary to belittle me in order to advance themselves and/or their daughter or son above me. What I do not understand is why people feel as if they have a right to do this. Why not just work harder and achieve your goal in the honest, old-fashion way? It is like Ann Landers said “Nobody ever drowned in his own sweat.”
The key to not ending up like Minkow is to surround yourself with people who share the same values as you. I am blessed to have a great group of friends, and a tight-knit family who not only have my back, but would call me out on something if I needed them to.
The world is full of opportunity. In the case of Minkow, clearly an intelligent and charismatic individual, opportunity presented itself in the form of a company. Granted, this company was based on fraudulent activity, but it’s apparent that Minkow was savvy enough to manage a large company. Why would someone armed with all the necessary skills to start and run a legitimate business resort to defrauding others?
The ZZZZ Best company had a meteoric rise to fame. For a man who by all appearances craved attention, perhaps this could be appropriate motivation to perpetrate fraud. Still, I’m puzzled as to why an intelligent man would not patiently execute his business plan, and strive to legally achieve the same level of success over time. Perhaps Mr. Minkow was so used to deceiving others, that he enticed himself into believing that his company was truly successful.
I agree completely with Dr. Schaub in that we need to find someone who can be our “safety net.” – Someone to catch us before we hurt ourselves or anyone around us. In the case of Barry Minkow, he succumbed not once, but twice to opportunities that he falsely rationalized. Both legitimate and dishonest opportunities will present themselves to us in the future. We may not always recognize the right decision regarding these opportunities, but it is our responsibility to have someone in our lives who will help us make the right decision.
You’ve added a new chapter to behavioral accounting, Dr. Shaub: Executives that seek the limelight may be more prone to accounting fraud!
Your conclusion is very interesting; to suggest a personality or character trait can exist that is more likely to accept accounting misrepresentation has to be somewhat novel. What should auditors be spending their time on? Possibly more interviewing the clients, discussing their lives, and holding conversations about their job and work place. Maybe ACCT 407 should include a section on negotiation (or super-secret CIA investigation techniques!).
It just goes to show that anyone can commit fraud, regardless of their reputation. Your advice is quite appropriate: Pay attention to the people making the decisions, not just the numbers.
I believe that Barry Minkow’s history proves that he is a fraud in many different aspects of his life. I find it interesting that when he went to prison he found religion and he later used that to his advantage to commit fraud. He has always been a people pleaser and loved receiving attention from others. It is sad that someone with that much potential has no integrity whatsoever and clearly didn’t learn from his mistakes. He is an ethical egoist that has a very weak set of core principles. Usually the people that are the loudest or demand the most attention in a room are also the weakest ones. Barry is a great example of the type of person that we should use our professional skepticism towards. He should’ve developed a stronger set of principles the first time him went to prison. His true character is displayed by his actions throughout his life. It is hard to completely change someone that has rationalized so many unethical behaviors throughout his career.
I do believe in redemption, but it is still hard to see someone who has seemingly “redeemed” himself fall again. Should we have seen this coming? Who can honestly say that they saw this coming all along, even after Minkow served as a pastor for fourteen years? From my interpretation of the situation, Minkow loved to be in front of the camera, even after his first conviction. I believe that there may have been a period of time when Minkow put his integrity before fame, fortune, etc., but his desire for fame and fortune led to his demise again. He fell in to his old ways, and, as his guilty plea shows, he knows what he was doing was wrong. Minkow will not be given another chance in my opinion. The government trusted him once, and I doubt they will make that mistake again. He finally had his life on the right track (or so it seemed), and has thrown it all away again. Was it worth it? I doubt it.
I think this is unfortunate on many levels. It is unfortunate for Barry Minkow to fall back into this type of situation. It is also unfortunate for those around him. As auditors, we are required to have an attitude of professional skepticism and find support for statements made by the companies we audit. But, as a person, I like to believe that people ultimately mean what they say and can profit from hard work and not deceit. This is another example of a person who would rather take the easy way to be in the limelight and successful than work hard to achieve those things. I think the most disappointing part of the story was his position. It is said that with great power comes great responsibility. As a pastor and a fraud investigator, you have a great responsibility to the public. When you slip, it makes it look like no one is capable of fighting the temptations. That sends the wrong message.
I understand that people commit fraud due to the factors outlined in the fraud triangle (pressure, opportunity, & rationalization). But something that I don’t understand is how fraudsters come to the logical conclusion that they will not be caught. Is this a logical conclusion that they even come to? Perhaps they perform a consequentialist calculation and reason that the juice (mansions, money, & fame) is worth the squeeze (7 years in Minkow’s case). Maybe they even think they can lawyer up and avoid severe repercussions.
The aforementioned reasoning doesn’t appear logical in Minkow’s case seeing as how he had been down the ethical slippery slope and was served an adequate dose of justice. This leads me to believe that Minkow, as well as other compulsive fraudsters like him, have an addiction. I believe that these fraudsters suffer from a psychological disease similar to alcoholism that makes them just as susceptible to relapse. Based on this reasoning, I don’t think anyone should be surprised to see Minkow back in the limelight for alleged securities fraud.
This reminds me of the old saying my mother tells me: “Fool me once, shame on you. Fool me twice, shame on me.” It is very hard for me personally to forget what people have done (to harm me or to harm others) in the past. No matter how much good you have bestowed on society prior to or post your transgression, you will always be looked upon with skepticism. For me, it all goes back to reputation. As we discussed in class one day, ‘One mistake can destroy the reputation you have worked hard to create’. It takes years of proving to people that you are honest, loyal and trustworthy, but one stumble and all that goes out the door. For Barry Minkow, the moment word got around that he was being charged once again for something illegal, the whole memory of his first fraud came back. Although he ultimately pled guilty, I believe that even being associated with illegal acts would have been the demise of Barry Minkow. He would have had to stay above reproach for the rest of his life for society to believe he went to the grave a changed man.
I tend to be an optimistic person (although none of this sounds like it), and since so much time had passed between Minkow’s first stumble and the second, I probably would have started believing he was a changed man if I had really been following him. Now, I hope to goodness the second time in jail will really speak to him, but I don’t think I will ever believe that Minkow has changed.
This is a very sad story. It is hard for me to think that he was really a changed person after his first sentencing. The fact that he could know what jail was like, and know what it was like to be away from family and friends for so long almost proves to me that his heart never really changed for the better. It is so hard for me to imagine all of these men and women doing these unethical things when they know the potential consequences. It really just blows my mind when they know that doing this could ruin their families and their lives once they are caught. I guess these people just think that they are above any law that is set for them and that they are just to smart to be caught by the system.
Its pretty sad also that his name and reputation were with the good guys on the right side of the ethical divider in the last few years after his release from his first crime. After he makes another mistake, everyone, and for the right reason, will just think that he was a fake and when they hear Minkow’s name they will only think of the 2 crimes he has now been caught for.
It seems to me that Barry Minkow represents ethical egoism at its finest. Yes, he helped the FBI by teaching fraud courses and founded the Fraud Discovery Institute, but what was his true motivation for doing so? It doesn’t really seem to be remorse or guilt over what he did. From the few interviews I have seen, I get the feeling he is more excited to tell the world how he cleverly deceived so many people, and so easily. The scary thing is, we never know what someone’s true motivation is. Was Minkow just a very talented actor all this time, waiting for another opportunity to commit fraud while he built his reputation back up and gained peoples’ trust? Or was he truly a changed man until this more recent incident? It’s true that we all make mistakes, and we should do our best to learn from them so that we do not repeat them. But sadly, we are all vulnerable at times, as Dr. Shaub said. Maybe Barry just needed a stronger support system of people he could trust to pull him back from the edge.
I believe someone can turn their life around for the better, but once someone has lost trust it is hard to trust them again. At the same time, when someone makes such a 180 degree turn it is hard not to put trust and faith in them, because as you said we are all susceptible to vulnerability. The story of Barry Minkow shows us that we always have to have our guard up and exercise professional skepticism, especially with most charismatic of characters. But there is a fine line between being skeptical and coming across as cynical.
This is a story that almost had a good ending. After serving his sentence for the original fraud, Minkow seemed to be someone who had completely reformed even though he ultimately ended up reverting to his former self. I think he genuinely wanted to be a better person when he came out of prison the first time. But it seems to me that Minkow’s downfall was his larger-then-life image of himself and the expectations that came along with it.
I think this story is such a good illustration of how anyone is at risk of turning to fraud. We have always referred to the “slippery slope” in class, but I really think that everyone is susceptible, once they make the smallest ethical departure. In the case of Barry Minkow, if we are to believe that his change and reform was genuine, the fact that he fell again is very significant. Sure, one can make the argument that if he fell once, it’s not so hard to fall again. But, if he truly changed and had a true reform and then fell after all those years, it really shows how no one is able to completely flee from the temptation to commit fraud. I think having people to be accountable to is one of the most effective tools to prevent making these mistakes.
I agree with Katherine’s statement that Barry Minkow is a true ethical egoist. As Dr. Shaub said in this post, the one consistency with Barry Minkow is his constant proximity to the media, youtube, or other form of attention. I think what Barry has to say should be noted by auditors as ways in which they should become professionally skeptical. I also think that the embarrassment that the FBI is currently feeling is overriden by the knowledge they gained about how to stop other frauds. The FBI was smart to use Barry Minkow as a resource.
Whether Barry’s religious revolution was true or not is not for us to decide. Your relationship with God is between you and God. However, in a professional sense I think it would be foolish to trust Barry Minkow whole-heartedly. In school we are taught to treat everyone we encounter with professional skepticism. We are also told that when red flags begin to appear, our professional skepticism should be heightened. My point is, if we are supposed to treat ordinary people who have no red flags surrounding them with professional skepticism then it seems obvious that we should treat Barry Minkow with a heightened sense of professional skepticism. This is not to say that Barry is a horrible person, but in a business sense… Sorry, Barry. You’ve lost my trust. Even more so the second time around.
I think the most important thing to take away from this post is the importance to surround yourself with individuals that will hold you accountable in the event that you take an unethical action. It is easy to make friends, it is much harder to develop the deep trust that would have to exist in order to confront someones unethical behavior. I feel I have individuals in my life that would do so for me, but these would be a select few.
You say that we need to be skeptical but that we shouldnt be cynical about people. These seemed like conflicting points to me at first. This would mean that I should always question people’s actions but that I should also give people the benefit of the doubt. But I think you are talkind about these as two poles. That we should try to create some sort of balance with the two ideas. There are times to be skeptical and times to be trusting. We have to have the practice to be able to recognize when we should be one way or the other.
One of the biggest things to realize about this is that everyone fails. It is not our place to look at other people’s lives and decide if they are genuine. While it is easy to do this, we need to remember that we as people will often fall into the same traps that we have run into before. However, I do agree that because of people’s actions and reactions, we should be prepared for what they might or might not do. It is always a good idea to have a healthy level of skepticism. I could not agree more that we should be careful when given responsibility. It is easy for our egos to take over and to begin rationalizing. This should tell us about ourselves just as much as it does about the business environment.
I find Barry Minkow to be a sincere person. I would even go as far as to say that I admire his commitment to his actions. Minkow was committed to the ZZZZ Best fraud until it was uncovered and his commitment to reforming himself during and after his stint in prison was admirable. I would also like to point out that his commitment derives from his ethical egoism. It seems to me that he will do whatever it takes for attention, no matter the consequences. It is difficult to be not cynical when it comes to judging a person like Minkow. I’m sure that he thought about his family when he assessed his options for committing fraud the second time around. Unfortunately for Minkow, that little egoist voice inside his head will probably always get the better of him.
I think that it is great that Barry Minkow seemed to turn his life around after he got into trouble. Also, I think it is interesting the point you made that he always leaned toward self promotion. I believe this can be an extremely good quality to have, but it can also have severe consequences if we only think about ourselves and not take into consideration others.
I also agree with what you said, that we need to be careful about what we treasure in life. If all we treasure is fame and applause, then we may head down the wrong path over and over again. This was reinforced by Dr. Smith as well. This just shows that we can learn from our mistakes and turn our life around, but it doesn’t mean that ethical decisions in the future are going to be any easier.
I think that Barry Minkow is a good example of how once a person makes a mistake it is easier to repeat that same mistake. While he may have succeeded in turning his life around for a significant period of time, the people around him should have been aware of his personal weaknesses. As you said, we all need people in our lives that we can confide in and and who will keep us on track. I think that Minkow found himself in a dangerous situation where he did not have those people and was put in a place he could make the same mistake again.
Change is the spirit of life, and I believe every individual has the possibilty to change. I can say that right now I am not the same person I was ten years ago, five year ago, or even one year ago. In some cases I am the same in how I reflect situations and process information, but overtime my experiences have changed the way I interpret everything. So as I was reading this article, I believed Barry Minkow did change for the better and to hear people say Barry can never change is sad because it denies the hope for redemption. In a society created around the notion of Christian beliefs such as forgiveness it is astounding how quickly we are to characterize individuals as permanent sinners. I know he’s done some terrible things in his life but ultimately who am I to judge? If my family, friends, professors, or anyone considered only my worst moments, how would I be judged? I believe that if people deviate from the path and somehwhere take a wrong turn, it’s never to late to find your way back. I just hope that when I’m face with an ethical situation, I will have the courage to do the right thing the first time and never deviate from the path or my ethical code.
I also believe that Mr. Minkow changed his life for the better after his first prison stint. I think this is clear through all of the positive work he did in his community and the aid he gave the government in identifying areas of fraud and increasing skepticism across the accounting profession. Unfortunately for him, his family, and the companies involved in the Lennar scandal, he slipped up. We are all human and therefore imperfect so we are going to be vulnerable to making mistakes. I believe Minkow is a very ambitious man and the pressures of trying to reach the heights he expected of himself put him in vulnerable positions. He lacked the necessary support network to help steer him away from the darkside and back to the light. We are all ambitious and have set high goals for ourselves. We must ensure that we have the necessary support in both our professional and personal lives to keep us from crossing the line into unethical decision making.
I first heard of Minkow’s ZZZZ Best fraud in ACCT 427 a year ago, and it stood as a testament to the possibility of being completely blindsided by a client we may be auditing. We must not allow ourselves to assume that everything is right just because the client seems confident and charismatic. The fact that Minkow ended up working to catch fraudsters like him reminds me of the check fraudster, Frank Abagnale, Jr. He eventually worked for the FBI and became good friends with the man who caught him. But in this last Lennar issue, it’s obvious that Minkow is still an ethical egoist, who strives for that fame, attention, power, and money. In striving to be skeptical, I’ve often lived by the idea of “forgive, but never forget.” If someone has a past of making unethical choices, I need to take that into consideration when I am cultivating any sort of trusting relationship with them.
It is really interesting to see how young Minkow was when he first was charged with this. He was just around the age that I am now, and that goes to show you how young people can start to go down the slippery slope. Although many people seem to think that he was changed after his first prison sentence, I find it hard to believe that he actually changed and then fell back into what he was doing. I am sure that he was trying to change, but deep down when he was doing all of the charity work and everything else, he was always struggling not to go back to his life before prison, but it was just too hard for him like it is for so many people.
Reading this makes the think of Tiger Woods. What are the chances that Tiger himself will “return to the dark side?” As a big fan of Tiger throughout his professional career I hope that he learned his lesson and has sincerely reformed his life. It seems that America has given him a second chace at redemption. He may not be the world’s number one golfer, or ever win another major, but he still play in front of huge galleries and is the first one to gain media attention when he finishes a round. I hope Tiger doesn’t pull a Minko. But if he does, I’m not sure he will get his third chance.
Barry Minkow’s situation made me think of many other examples where we hear of ministers or public officials who have commited unethical acts. People usually make such a big deal about these scandals whenever they involve a person in a noteworthy position, but why? I suppose people expect more from people in leadership and assume that they will be above outside pressures. They are not. Like you said, everyone is vulnerable. This reinforces the need of auditor’s to be professionably skeptical. No matter how smart, how powerful, or how successful a person may be, they are all vulnerable to make unethical decisions. I usually would describe myself as a good person. I grew up in church and was taught to have strong Christian values, but I am still just as vulnerable. I have to be certain to never let my guard down, because I could end up making decisions that do not line up with my values.
I agree that Minko’ws actions were wrong, however, the investigators and agents that relied so heavily on his insight into fraudulent schemes and the auditors of his financials should have been much more skeptical. Aren’t they somewhat to blame? The chances that a person who makes a mistake will make the same mistake again, are very high. I am sure that we all have made at least the same stupid decision more than once.
Like some of my peers have said before me, when is enough, enough? Minkow will be released from prison in a number of years. will he be a truely changed man then, or will he be submissive to temptation once again and venture down the slippery slope for the third time? If he claims to be reformed, will we forgive him of his past transgressions? Will he get another chance? What will happen to us in the future if we make a mistake and head down the wrong path? Do we expect to be forgiven? Will we deserve another chance?
This is a very sad story indeed. What I don’t understand is why he committed this second crime? I know that the fraud triangle says that a person has to be under some type of pressure, but it seems to me that everything was going right in this man’s life. He seemed to have turned his life around and was on the right track again, but inevitably went down the wrong path. Unless he was under some type of immense pressure that wasn’t disclosed, I find it hard to believe that he every really changed.
It is very unfortunate to hear that Minkow took a wrong turn again. I have known people and seen high-profile public figures make mistakes and end up having a Christian conversion. Thankfully, those who I have personally seen find a better path to walk have continued to do so without straying. In Minkow’s case, I can believe that his spiritual conversion was real. However, the question I would pose is how much did he continue to strive for continued conversion after having his parole conditions removed? In my experience, a spiritual journey is an ongoing and everlasting journey, not something that you do for a short while and then decide that you have done enough. The moment that we start to be satisfied with ourselves is the moment that we stop striving for improving our character and integrity.
Skepticism can be offensive to most people. If you do not truly trust them, people feel wounded. But Barry Minkow is just one example of the reasons to question what is presented as truth. It is hard enough to have people believe in you after making the first mistake. Now, how can he expect people to believe in him now? This situation reminds me of the phrase, “Fool me once shame on you, fool me twice shame on me.” How can he expect to have people’s trust if he has fooled so many people for a second time. I feel the same way to see Barry Minkow as a warning to be accountable and ethical. However, I feel we should be ethical and strong enough to realize to be accountable without having to have a warning or example to look at.
I think this article speaks to the concept that we have talked about many times in class regarding ethical missteps. As we all know, it only takes one mistake to wreck a lifetime of good deeds. Although I think Mr. Minkow clearly deserves a second jail sentence, I wonder if anyone will take into account all of the good things he has done during his time out of jail? Yes, he has committed crimes against society. But, apparently he has also done a lot of good. Will anyone remember the good? Should anyone remember the good? Although I am not sure of the answer, I think it is interesting to recognize the weight of bad choices in the calculation of reputation compared to the weight of good ones. It is clear that we must be very careful.
After reading this article, I feel that it is unfortunate that Barry Minkow has become a repeat offender of unethical decision making. It definitely seems he is an ethicial egoist, acting out of self-interest and greed. When he reconnected with God, it seemed like he was turning his life around for the better, but his poor decision making confirms that he is lacking character and a strong ethical foundation. I feel everyone deserves a second chances, but when you continue to disappoint, it makes it so much harder for the offender to gain any kind of trust back.
I feel that Mr. Minkow truly did change his life and the image he wanted to portray after the truth about ZZZZ Best was discovered. It may not have been a full change in heart, but enough to change him and allow him to make an attempt at another chance. As he was much revered for the Fraud Discovery Institute and his newfound Christianity I think the public wanted to believe they had found a true Cinderella story. After his current episode, it is clear that the ending was not quite that simple. While he would provide us with a great example of how it is never too late to return to your ethical code, his recent allegations prove the cynics: once corrupt, your morals will never resurface. I think people like Mr. Minkow that have been succumbed by fraudulent behavior and indulge in self-promotion should always be taken with a grain of salt. As auditors it is our duty to remain professionally skeptical to help protect the shareholders. Forgiveness is a virtue but should not be superseded by ignorance.
I completely agree with your article. Barry Minkow’s story is a fascinating one that should serve as a warning to all of us. Not that long ago, I would have read this and said that there is no way that anything like this could ever happen to me. You have taught me that this is not only an ignorant way to think, but also a dangerous one. You stated that we are all vulnerable. This could happen to ANYONE under the right circumstances. If the pressure, opportunity and rationalization are all there, it takes a very strong person to do the right thing. This article again points out the importance of having those people in our lives who are not afraid to speak up and keep us on the right track.
When I first heard the story of Barry Minkow, I was completely shocked. My first thoughts were, how dare he? Not only did he hurt himself, his family, and his friends, but he potentially discredited his very public conversion to Christianity and subsequent ministry as a pastor of a church. To tell you the truth, I was kind of embarassed that non-Christians would read about this story and find another reason to discredit the Christian faith.
But after thinking about it more, even though it’s a sad story, it’s a perfect example of why we all need faith in God in the first place. This shows the capability in human beings to sin…sometimes over and over again. Everyone has this tendency in them and everyone repeatedly fails in some areas of their life. Unfortunately for Barry Minkow, his failures were very public. This story shows us how much we need God in all areas of our life. It reminds me of the verse (don’t exactly remember where in the Bible it’s from) that says that if you think you are standing firm, be careful that you do not fall. All of us need a savior that loves us unconditionally and that will redeem us with his unfailing grace. I pray that I can remember not to judge other people’s troubles and realize that I am capable of the same things, even if it looks a little different. I pray that Barry Minkow has asked God for forgiveness and that God has begun a redemptive work within him.
I find Barry’s story of reformation very interesting. The question I have now is did he ever really change? Was the whole thing just a charade to gain back his reputation? After such a public scandal, it would be hard to come back and be trusted in the business world again. But Barry managed to do just that. He got back on his feet and seemed to be helping out by using his experience to stop others. So what went wrong? Was it just that the temptation of the fraud too much to withstand? Maybe he thought since he had such a good reputation now, he wouldn’t be caught again. I think the worst part of what Barry did is that now every other reformed white collar con will be looked at with skepticism. Who knows if any of them really change? They went against their morals and values once, why wouldn’t they do it again?
After reading a few paragraphs, my first inclination was to think that Barry never changed in the first place. I guess it’s so easy to think that way.
But, when you said, “Many lives turn, stay turned, and finish well,” I thought again. I know that I have had many turn of events in my short life that have made me a better person. I have changed drastically from who I used to be. From personal experience, I should have been the first to think that he did change and just had a momentary lapse in judgment.
What I have found to be most effective for keeping my life on track is to have accountability partners. I love that you mention this so much in class and that you seem to really value your accountability partners as well. This is something so wonderful to share with others because I think it is very important.
Cynicism is something I should be more aware of and steering clear of it is always a good choice.
We read articles that violent criminals and sexual criminals are more likely to repeat because the actions are derived by psychological reasons. However, for white collar criminals, we are accustomed to understand that those crimes occur because of those individuals’ self-interest. Coincidentally, I came across an article on NPR called “Psychology Of Fraud: Why Good People Do Bad Things.” In this article, a study claims that frauds occur not because people are only pursuing for their self-interest, but they commit fraud with the intention to help other people.
Hmmmmmmmmmmm………I think publishing these articles and studies only gives these criminals another reason to repeat the crime or commit frauds. And if they do not learn their lessons, I have no empathy towards them.
Although Barry it appears that Barry has changed, I think the one thing that remains constant is that he was and still is an ethical egoist. After his first conviction, he managed to do some great things, but I can’t help but think that a lot of his motivation was self promotion and greed for public acceptance after he got caught. I do not necessarily believe that Mr. Minkow is a bad individual with horrible intentions, but I do believe that it is important to recognize potential motives before making any type of assumption regarding a person’s character.