SAN DIEGO, Calif. Barry Minkow, a well-known San Diego, Calif. pastor who led a church after serving seven years in prison on Ponzi-style fraud charges, resigned his post March 15 after agreeing to plead guilty to federal charges in a separate case.
"Today Barry resigned as our senior pastor as he is no longer qualified to be a pastor," the abbreviated statement from Community Bible Church read. "Pastor Barry no longer considers himself above reproach as he has agreed to plead guilty to a criminal count related to the Lennar lawsuit."
No other details were provided by the church and the "About us" link on the church website had been erased of all text by the morning of March 16. A report by Bloomberg indicated that talks were still under way for a plea deal.
"Barry is looking forward to getting this behind him and on with the rest of his life," Alvin E. Entin, Minkow's attorney, told Bloomberg in a telephone interview from San Juan, Puerto Rico.
The pastor faces a maximum five-year sentence under the proposed deal in which he would plead guilty to a single securities fraud count. The plea may take a week to negotiate, Entin said.
Minkow was hired as senior pastor of Community Bible Church in San Diego in 1997a decade after his fraud conviction in which investors in his carpet cleaning company were bilked out of as much as $100 million. While in prison, Minkow said he converted to Christianity and later went on to earn a divinity degree. In addition to his pastoral duties, Minkow co-founded the Fraud Discovery Institute and began working with the FBI and other organizations in fraud detection and prevention. He often appeared on national talk shows as an expert in fraud matters. In May 2005, he was the subject of a 60 Minutes segment in which he told CBS correspondent Steve Kroft he was seeking redemption by working with law enforcement. His work, Kroft reported, resulted in a judge shaving off some of his probation time.
"I want everybody who has ever failed to know that they can come back from failure," Minkow told Kroft in the interview. "You can take what you used to use for evil and manipulative reasons and to hurt people and use those same talents and abilities to help them. And I believe people can change!"
Nearly six years after that interview, Minkow was looking at new criminal charges of insider trading, which were levied against him after Florida-based homebuilder Lennar sued Minkow for libel and extortion in a scheme to drive down its stock prices. The developer alleged that Minkowworking for a former Lennar business associatecrafted and released a report that was critical of Lennar's business practices and which contained numerous unsubstantiated accusations.
Before releasing the report to the public, Minkow was said to have short-sold Lennar stock, therefore personally benefiting from insider trading. After Minkow published the report, the homebuilder's stock reportedly declined in value by as much as 20 percent or $500 millionin just two days, LA Weekly reported.
In December, Florida Judge Gill Freeman entered a default judgment against Minkow.
"Minkow has withheld key documents, destroyed or discarded important evidence, concealed the identity of material witnesses, willfully violated court orders and engaged in actions to cloud his misconduct," the judge said.In late January, Minkow reported that the church had been burglarized and that $50,000 in cash and checks was taken from the church safe. That incident was not mentioned in the church statement.
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