4) ZZZZ Best frauds
ZZZZ Best was a carpet-cleaning company set up in Inglewood, California in 1982 by the then 16-year-old Barry Minkow, while he was still in school. The company initially struggled for survival. Minkow (pictured) only survived by engaging in credit card fraud, stealing money from relatives, and staging burglaries in order to collect on the insurance. However, the company seemed to find a way to make large amounts of money when it branched out into carpet restoration for insurance firms. The apparent success of this business enabled ZZZZ Best to float in 1986, reaching a peak market capitalization of $280m.
Minkow created a fake firm, Interstate Appraisal Services, which posed as ZZZZ Best’s client. To keep the business running, Minkow took loans from various dubious figures, and shuttled money between bank accounts, in a Ponzi-style scheme.
It collapsed in 1987, costing investors and lenders $100 million: one of the largest investment frauds ever perpetrated by a single person, as well as one of the largest accounting frauds in history.
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