A:

At 18, Barry Minkow was the youngest CEO to ever take a company public. At 20, he was the youngest CEO to be indicted for securities fraud.
Barry Minkow ran a carpet cleaning company, became the youngest person to take a company public, and very nearly merged it into the largest carpet cleaning company in the country. Although this sounds like a page out of the American dream, it unraveled to become another scandal in a decade that saw Ivan Boesky, Michael Milken, and Charles Keating go down.

Minkow started his carpet cleaning business, ZZZZ Best, at the age of 16 and was in debt troubles from the beginning. In order to meet payroll and equipment needs, Minkow used check kiting and resorted to private loans that were rumored to be connected to the mafia. Facing mounting problems, Minkow began fudging invoices for insurance restoration services for which ZZZZ Best was neither licensed or contracted. Parlaying this paper cashflow into more debt, ZZZZ Best was able to expand even while it was financially unstable. In hopes of finding a way out of debt, Minkow decided to take ZZZZ Best public.

Through various methods of deceit, including fake books, false offices, and claiming the work of other companies as his own, Minkow passed the independent audits and became the youngest person to undertake an IPO in 1986. The IPO made Minkow a paper millionaire but did little to solve the fraud the company was built on. Minkow tried to break into legitimacy by merging with a larger carpet cleaner, but the high profile of Minkow and the deal proved his undoing. Ties to the mafia, allegations of money laundering, reams of paper fraud, and years of operation without an actual profit brought ZZZZ Best crashing down.

Minkow went from owning $100 million of a $300 million company to facing jail time as the result of concurrent SEC and FBI investigations. Minkow served time in prison and is still paying reparations to the investors who lost over $100 million as a result of his fraud. In an ironic twist, Minkow has went on to work for the Fraud Discovery Institute to catch people running schemes similar to his own. (Read about other fraudsters in our article The Pioneers Of Financial Fraud)

This question was answered by Andrew Beattie.

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