Down, But Not Out

Barry Minkow

• Publisher: Thomas Nelson
• Year: 2007
• ISBN:
  9781418551902
• Topic: Personal Development
• Subtopic: Personal Success

Everyone's had a bad day, some of us have had a lot worse. But as Barry Minkow shows in this inspirational and empowering book, you can come back from anything. He started from jail-and millions in debt. You might be starting from a wrecked marriage. Or a business gone belly up. Whatever your failure, you can overcome and get beyond it starting today. In Down, But Not Out, Barry explains the 10 all-important steps you need to succeed in the process. You may not end up helping the FBI bust investment fraud like Barry does today, but youcan turn your life around and get back on the road to success. Barry shows you how.

Step Five

EMBRACE THOSE WHO
BELIEVE IN YOU!

Remember, George, no man is a failure who has friends.

—FROM THE MOVIE IT’S A WONDERFUL LIFE (1946)

If I had to identify the most significant component of coming back from failure, it would be the importance of having people in your life that believe in you, support you, and stand by you. Friends are sometimes the only things that stand between us and a tide of criticism. We may have days, weeks, or even months in which circumstances exceed our own ability to overcome the pain associated with people who question and ridicule our comeback bid.

I call these people who support, encourage, and choose to believe in others despite their past failures paramedics. Pastor Chuck Smith illustrates what this paramedic moniker means when he talks about the difference between the police and the paramedics. Who always shows up at the scene of an accident? You’d be right in thinking the police and the paramedics. However, according to Smith, they have two entirely different functions.

The police are there to assess blame. They must make a report of the accident and determine who is at fault. In most cases, the insurance company uses these reports as the primary basis for paying claims. In contrast, the paramedics are there to heal, not to report on who is responsible. Frankly, they could really care less about responsibility, because their primary purpose is to heal those who are hurting no matter who was at fault.

On the road to coming back from failure, you will encounter two kinds of people. First are the “police,” who arrive with f lashing lights and immediately begin assessing the scene for blame. If you have had failures in the past, they will respond even more swiftly. Their role is to be critical of you and your decisions. When they see you heading down a slippery path, your police are quick to conclude that you must be up to your old tricks.

Second are the paramedics, who care little about who was at fault and choose to focus on healing. Some of the best paramedics are people who have failed themselves, because they realize that when a business crashes or a marriage fails or even when personal integrity takes a head-on hit, the person responsible is in need of restoration. They also have vivid memories of how their own police and paramedics responded and how important it was to encounter the latter.

The primary characteristic of a good paramedic is a fundamental, heartfelt belief that people can change. More specifically, the paramedics in your life believe that you have committed to change. Based on that principle they become a source of strength to draw upon during the comeback process.

My imagination is simply too limited to explain the value of having a few good paramedics on the scene after the police arrive. Instead, let me illustrate what happened to me when several “accidents” crowded together in one short week. I was in the middle of a pile up and the “police” were out in force.

“My name is Shannon and I admitted myself to this drug rehabilitation center yesterday. I am addicted to painkillers,” she mumbled. Most of the people gathered around her in a tight circle stared intently as she continued. “There is a man who pastors a church who has been trying to help me over the past few years. I think I need to see him.”

“Who is that pastor?” the group leader asked softly. Shannon hesitated momentarily before answering.

“His name is Barry Minkow and he pastors a church right here in San Diego,” she stated. “My mother-in-law has been his personal assistant for almost ten years.” When Shannon said that, the man seated next to her who had been otherwise inattentive, suddenly spoke up.

“Hey, isn’t that the same Barry Minkow that used to own ZZZZ Best Carpet Cleaning back in the 1980s?”

“It sure is,” Shannon replied, nodding affirmatively. “Why, do you attend that church?”

“No. But I’ve been looking for him for twenty years! I used to work for his company in 1986 and 1987 and my last two paychecks bounced and he owes me thousands of dollars,” he exclaimed. “Do you know how I can get ahold of him?” The man was clearly not going to let her continue until she responded. As the rest of the group rolled their eyes, Shannon scribbled my number on a piece of paper.

“Wait ’til I talk to him,” the man added as he stuffed the small paper in his front pocket. “He is nothing but a crook!”

“I just think you should stay out of it, Barry,” Tony Nevarez advised. In his role as the church’s chairman of the elder board, any complaint about me was first filtered through him.

“That’s easy for you to say because the accusation and attacks were made about me. I want to know what I am being accused of!” My response was an attempt to goad Tony into telling me what had transpired when a person in the church had accused me of a conf lict of interest.

“The accusation was not necessarily just against you. Basically this person has accused the elder board of sweeping issues regarding you and your relationship with the Fraud Discovery Institute under the rug. The person is concerned that you are using church resources like the phones, copy machines, and even secretarial staff for fraud-discovery work. The person also is convinced that FDI is practicing law without a law license.”

“You’re kidding me, right?” I interrupted.

“I’m not kidding,” Tony said gravely.

“So we have someone in the church that believes I am running an illegal fraud-uncovering company, using church personnel, copy machines, and secretarial staff—while simultaneously practicing law? How do I defend myself against that?” I asked naively.

“Good question. I am e-mailing the entire board to make them aware of the accusation,” Tony stated. I hung up the phone in disgust.

“I realize you do not know me, Pastor Miller, but I want you to know that if you invest $250 thousand into this deal, you will lose your money,” I explained as I weaved through traffic with my wife, Lisa, on the passenger side. She rarely hears fraud-investigation calls, especially both sides of the conversation, so I thought it would be neat to use this call as a way to share that part of my life. We were headed to the church for an evening event when Pastor Miller, an associate pastor at a church in Arizona, had phoned me. I answered the call using my hands-free set, which gave Lisa the opportunity to listen.

“I am only calling you because Gary insisted that I do. Over four years ago a pastor referred Ed Purvis to our church and so far he has an excellent track record of paying people timely returns on their investments.” Gary Bruyns had called me weeks earlier because he was concerned that a Ponzi scheme was being perpetrated at his church by Ed Purvis. I was in the process of investigating the investments Purvis was offering several church attendees at more than one church.

I patiently listened while Pastor Miller described the reason for his call. I had done so many of these cases that I could already anticipate what he was going to say before he said it. At this point, he was going to tell me that everyone in the Ed Purvis investments had received their promised 2 percent per month returns over a four-year time period. Never mind that the second wealthiest man in the world, Warren Buffet (who is by far the best at generating large returns to investors over an extended period of time) has only averaged 24 percent annually. Pastor Miller was essentially arguing that this Ed Purvis was in the same ranks as Warren Buffet.

He was also going to tell me that Purvis was a church brother and therefore a fellow Christian of the highest integrity. His decision to invest with Purvis was not based on any objective source, like audited financial statements, but the many investors who had been receiving the promised returns over a four-year time period. I had heard it all before.

“Did you get a chance to read the letter I sent you from the FBI confirming how many of these kinds of cases I have worked on and helped shut down in the past?” I posed. My wife smiled knowingly. Obviously the imputed credibility from the FBI would most certainly help convince Pastor Miller to consider my observations.

“All I know is that you are a convicted felon and Purvis has done nothing wrong,” he sneered. Although somewhat predictable, the response was still frustrating. Instinctively I knew this was not going anywhere so I interrupted.

“But, Pastor Miller, don’t you think it is kind of strange that Mr. Purvis does not allow participants to explain how he generates these returns and that other investors have no paperwork or offering memorandum, which is standard for these kinds of investments? And don’t you think it is strange that everyone who participates in these investments is sworn to secrecy?”

“No, I do not think it is strange at all. The world does business one way, and we Christians do business by our word,” he replied, as if I was not included in that circle. I felt like reminding him of the famous statement Ronald Reagan once made in response to Mikhail Gorbachev. When Gorbachev asked if Reagan trusted him, Reagan responded, “Of course I do, now cut the cards.”

“Look, Pastor Miller. Let me do one thing. Let me Federal Express you a check from me made payable to any law firm of your choice that specializes in securities law. Tell that law firm about the Ed Purvis investment deal and if they say it is legal and there are no problems—great. It will cost you nothing but a couple of hours of your time. But if they tell you otherwise, which I think they will, then you will save a quarter of a million dollars.” I pulled the car into the church driveway and glanced at Lisa who impatiently waited for another snide response.

I made the offer in order to take the “Barry Minkow, ex-convict” problem out of the equation. A neutral law firm of his choice agreeing with my findings would most certainly convince him not to invest, I believed.

“No thanks, Mr. Minkow. You are a felon and Ed Purvis is not.”

“But I am also a pastor!” I even tried using my Christian affinity to influence him to at least consider the possibility. If Ed can do it, so can I! I thought.

“Yeah, a false pastor who has no business looking into my investments. I know you infiltrated our church with permission from your FBI buddies and you are deceptive and a liar.”

“I only lied about being deceptive,” I said half jokingly. The car almost shuddered when he slammed down the phone.

By the expression on her face, I could tell that Lisa was in shock. I, on the other hand, had been accustomed to not being believed. The fact that the Fraud Discovery Institute had successfully uncovered similar frauds as confirmed by the FBI mattered little, because—as I had learned the hard way—when it came to credibility, I could not compete with a promised 24 percent annual return! In the fraud-discovery business one learns that people seldom allow things like facts to get in the way of their decision-making process when there is the lure of high-dollar profits. How could I compete?

“He called you a convicted felon!” Lisa was mortified.

“It’s been that kind of week,” I retorted and squeezed her hand. It was time for church.

“You have broken the tax laws, Barry. By not issuing K-1s in 2002 and 2003 to the people who had legitimate write-offs, you are a lawbreaker,” the accountant claimed. There was no convincing him otherwise. Simply put, a K-1 is a form given to people who have lost money in an investment so that they can write it off on their taxes.

“Brother, you know I love and respect you, but for the first four years of the Fraud Discovery Institute’s existence, we did not even have a checking account because we uncovered fraud for free,” I explained, desperately trying to sound benevolent.

“Yeah, but FDI did generate speaking income and book writing income for you,” he protested. “How did you record that?”

“On my personal returns. I always pay taxes personally for that income and have recorded it on my personal returns for years. W...