Description
Barry Minkow - All-American Con Man?
Can the Perpetual Fraudster be Stopped?
In our readings thus far, we have read about the role of auditors, both internal and external. We have also seen some discussion about the difference between a traditional financial audit and a fraud, or forensic audit. In addition, we have had discussions from Chapters 2 and 3 about various fraud theories and the motivations behind fraud. We have explored evidence and identifying signs of deception.
One of the more "colorful" fraud perpetrators in recent years is Barry Minkow, of ZZZZ Best infamy, among other things. Without going into detail, Mr. Minkow has had a very colorful history stretching from the 1980's to today. To give you a good flavor of his history, I have gathered the following list of resources that tell some of his story.
Minkow movie trailer https://www.youtube.com/watch?v=SLi0Fp8tB6w (Links to an external site.)(Links to an external site.)
Jan. 1988 - ZZZZ Best Founder Minkow Indicted on Racketeering and Fraud Charges
Feb. 1990 - Nothing But ZZZZ Best: Barry Minkow – The Kid Who Swindled Wall Street
Jan. 2012 - Barry Minkow : All-American Con Man
2006 -Barry Minkow ZZZZ Best CEO Profiled on 60 Minutes
March 2011 – Plea Deal Puts Minkow Redemption Movie in Limbo
Sept. 2013 – Ponzi Schemer Barry Minkow Facing Third Strike
Dec. 2013 – Barry Minkow Scam Leads to $1 Billion Verdict
Jan. 2014 – Former Teen Millionaire Guilty of Defrauding San Diego Church
Barry Minkow - Con Man Nonpareil
Once you have a good understanding of his story over the years, please post a one-page summary exploring Barry and his colorful history, specifically focused on your observations of his story and what you, as a potential forensic accountant/fraud examiner, can most learn from his story.
Following your initial post, please interact, discuss, and debate freely with your classmates with at least three substantive responses to other posts. I am truly interested in getting your perspectives that explore the breadth of subject areas we have covered thus far. The content of our discussion is fairly wide open; however, consider any one or more of the following areas to discuss:
What are your most poignant observations?
What are lessons to learn from this story?
What conclusions can you derive about motivating factors?
How does this story impact your opinion of the role of auditors?
How well does the fraud triangle (or other fraud theories) apply to fraudsters like Barry Minkow? How might the application of these theories be different in this case?
What is your opinion of the punishment that Barry has experienced (sentences, jail time, fines, restitution)?
Is jail time an effective deterrent? Why/why not? If not, what might constitute a more effective deterrent?
How do we stop fraudsters like Barry? Why does this type of fraud story continue to repeat itself?
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Explanation & Answer
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Running Head: RESPONSE TO STUDENTS POSTS-FRAUD PSYCHOLOGY
Response to Student’s Posts –Fraud Psychology
Student Name
Institutional Affiliation
Course Code
Date
1
RESPONSE TO STUDENTS POSTS-FRAUD PSYCHOLOGY
2
Response 1
I concur with the claim made by the student in post one that Barry's motivation was his
desire to pay off his debts and live a prosperous life. It is, however, quite evident that he was able
to defraud millions of dollars for a very long time without detection. Minkow does not seem to be
remorseful for his crimes since he shifts the blame to the audit teams and the banks. To ensure
fraudsters like Barry do not thrive in the business environment for a long time, auditors need to
ensure they do not blindly trust what their clients say without due diligence and asking hard
questions. Again, businesses should also collaborate with the criminal justice system since most
fraudsters tend to be perpetual criminals-meaning that they revert to the same crimes several times.
Response 2
While I agree with the...