SAN DIEGO (CN) - Barry Minkow, carpet-cleaning fraudster turned convict turned pastor and "fraud investigator" pleaded guilty Thursday to defrauding a Baptist church and its congregation of more than $3 million, the U.S. attorney said.
Minkow pleaded guilty to "a litany of improper conduct, including opening unauthorized bank accounts on behalf of the SDCBC [San Diego Community Bible Church], forging signatures on SDCBC checks, using funds drawn on legitimate church accounts for his personal benefit, and charging unauthorized personal expenses on church credit cards," the U.S. Attorney's Office said in a statement announcing Minkow's guilty plea.
"In addition, Minkow confessed to diverting SDCBC member donations for his own benefit and embezzling money intended as church donations. In all, Minkow admitted purloining - and concealing from the IRS - at least $3 million from SDCBC's parishioners and lenders. As described in court documents, Minkow's conduct continued for over a decade."
Minkow embezzled the $3 million "intended as church donations, while employed as a pastor, and concealing it all from the IRS," the Internal Revenue Service in charge of the Los Angeles Field Office said in the statement.
Minkow faces up to 5 years in federal prison, a $250,000 fine and restitution, at his April 7 sentencing.
He's already in prison.
Twenty-five years ago, he Minkow was convicted of defrauding banks and investors of millions of dollars in a Ponzi scheme he called ZZZZ Best carpet cleaning. He was sentenced to 25 years in prison.
Had he served it all, he would be getting out of prison now. But in the slammer Minkow "became involved in the Christian ministry," the U.S. attorney said. He was cut loose in 1995 and went to work as a "pastor" in the Los Angeles area.
In 1997, he funded the "Fraud Discovery Institute" - a profit-seeking enterprise. His work as a "fraud detection expert" got him an admiring feature on "60 Minutes" in 2006.
In his status as an expert, Minkow issued a "report" accusing Lennar homebuilders of fraud in 2009. Lennar's share price dropped by 43 percent - from $11.57 t0 $6.55. But Minkow used his "report" as a tool to short the stock, and was charged with securities fraud. He pleaded guilty to conspiring to manipulate Lennar's share price and was sentenced to 5 years in prison and ordered to pay Lennar $585.5 million in restitution. He is serving that sentence in Lexington, Ky.