Archive for the ‘Finance’ Category

ZZZZ Best

What was the ‘ZZZZ Finest’

ZZZZ Best is a bankrupt business that was owned by Barry Minkow in the 1980s. Using forgery and theft, Minkow and his associates appeared to be developing a multi-million dollar corporation. ZZZZ Finest’s going public (IPO) was in December 1986, and the company reached a market capitalization of over $200 million before collapsing.

BREAKING DOWN ‘ZZZZ Best’

ZZZZ Best began as a carpet cleaning company started by Minkow in his parents’ garage when he remained in high school, and business was never profitable. Minkow stole money from several people with time and produced the impression the cleansing organization was successful. A couple of years later on, ZZZZ Finest began to specialize in the insurance coverage repair organization.

Factoring in an Appraisal Business

Minkow developed a fictitious business, Interstate Appraisal Provider, to create files that fraudulently validated ZZZZ Best building refurbishing work for fire and water damage. The appraisal company generated files to create the appearance that insurance provider employed ZZZZ Best to carry out the repair work. Both financiers and lenders established an interest in ZZZZ Best based upon deceitful financial declarations produced by Minkow’s firm.

How Auditors Were Misguided

For development of an IPO, the Securities and Exchange Commission (SEC) requires a firm to compile a prospectus, which document must consist of a set of audited monetary declarations. An independent CPA firm examined ZZZZ Finest’s financials to supply an opinion as to whether the monetary declarations were totally free of product misstatement.

Example of Other Fraud

Once the ZZZZ Best scams was discovered, Minkow was founded guilty of scams and sentenced to 25 years in jail. Throughout his time in jail, he began to research and reveal other businesses that were operating fraudulently and notifying the federal government. Based on the dollar quantity of scams he eventually discovered, Minkow’s sentence was lowered to just over seven years. After his release from prison, Minkow became a church pastor and was founded guilty in 2014 of embezzling $3 million from San Diego Community Bible Church by different ways. His theft consisted of taken donations and an unapproved church loan.

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