Down, But Not Out: 10 Steps for Rebuilding Your Life, Your Career, (and all that other stuff) by Barry Minkow | Hardcover | Barnes & Noble
Down, But Not Out: 10 Steps for Rebuilding Your Life, Your Career, (and all that other stuff)

Down, But Not Out: 10 Steps for Rebuilding Your Life, Your Career, (and all that other stuff)

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by Barry Minkow

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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


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.

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Nelson, Thomas, Inc.
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8.48(w) x 10.88(h) x 0.89(d)

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DOWN, but not out


Nelson Books

Copyright © 2007 Barry Minkow
All right reserved.

ISBN: 978-1-59555-071-2

Chapter One

Step One


The real glory is being knocked to your knees and then coming back. That's real glory. That's the essence of it. -Vince Lombardi (1913-1970), legendary NFL coach

How many?" the waiter asked automatically.

"There'll be three of us," I said, "and if possible, can we have a quiet table off in a corner?" No sooner had I asked the question than I realized that it was three o'clock in the afternoon; not the restaurant's busiest time. The waiter frowned at me, as if I was rubbing it in that the place was virtually empty. But I did not have time to worry about what he thought of me. I was undercover, trying to gather information for the FBI and the SEC on what I knew was a massive, international fraud. But what I knew and what I could prove were two different things. That is the dilemma of being in the fraud-uncovering business.

"Very well, Mr. Minkow. Follow me," he mumbled and proceeded to lead me to a table near a window. Arthur's Landing overlooks the Hudson River and, although it's in New Jersey, it has a stunning view of Midtown Manhattan. I sat down, carefully unfolded my napkin, and tried to let the scenery calm my nerves.

I was worried about two things. The most obvious cause for anxiety was I was meeting with two perpetrators, Kayel Deangelis and Derek Turner. Deangelis, a young and apparently savvy New York stockbroker, knew the markets and, to my disadvantage, was also streetwise. He was the kind of guy who could see through my front if he examined me closely. My plan was to gather enough evidence on Deangelis so the FBI could pressure him into cooperating against Turner, the main player in the scheme.

If there is one thing the FBI taught me back in the 1980s when they successfully prosecuted and convicted me of fraud, it was the valuable nature of a cooperating witness who is on the inside of the scheme. I was certain Kayel Deangelis would cooperate. I just needed to gather the proof and let the FBI handle the rest.

Which brought up my second cause for concern-maintaining my cover. I didn't want the perpetrators to look too hard at the illusion I was creating. In this case, I had the luxury of being able to use my real name and position as the senior pastor of Community Bible Church in San Diego; my cover story was that I was looking to invest money from our church building fund. But there was always a chance that Turner or Deangelis would find out my affiliation with the Fraud Discovery Institute. That would tip them off that I was more than a pastor and that their scheme was probably being infiltrated. And the possibility of infiltration has every con man quaking in his loafers.

After all, there had been some recent press about how an excon had just uncovered a multimillion-dollar fraud, and I worried that either Kayel Deangelis or Derek Turner had read it. I tried to rationalize that with all the newspapers, cable channels, and Internet news agencies, dilution worked in my favor. The fact that Turner was based in the Bahamas also worked to my advantage, as he would not likely receive American newspapers. At least I prayed that was the case.

I reviewed my notes for the meeting and noted what I believed was the smoking-gun evidence that Turner and Deangelis were perpetrating a fraud. I thumbed through the promised returns of 38.8 percent per year dating back to 1997. It was June of 2004 at the time of our meeting, and that meant a seven-year track record of 38.8 percent annual returns from trading index options on Wall Street! In fact, Turner had claimed to be profitable every month of those seven years. But I had done my homework and checked with Wall Street's best index option traders. They all told me the same thing: "No one could ever maintain 38.8 percent annual returns for seven years month after month with no losing months. Too many draw-down periods. Totally impossible."

I also had found an article in an obscure Australian newspaper reporting that the ASIC (Australia's version of the Securities and Exchange Commission) had shut down Turner in November of 2000-something that would make his seven years of consistent returns impossible. You cannot generate these kinds of returns while you are shut down! Moreover, this encounter with law enforcement in Australia was not disclosed in the prospectus that sat in front of me. But the worst part of this deal was the $500 million that Mr. Turner said was invested in the fund by people from all over the world-especially in the United States.

I glanced out at the city skyline, trying to identify Wall Street from across the Hudson, and thought about all the people that had placed their life savings in Turner's investments. I had to stop him. I had to gather the evidence for the FBI. They believed I could and because of their faith and confidence I was even more motivated to perform. I glanced at my watch. It was 3:15 p.m. I turned and looked at the front door of the restaurant. Sure enough, they were entering the room and glancing around for me.

While I took one last sip of ice water the words of my wife, Lisa, invaded my thoughts: Barry, you're a father of twin boys now. I don't want you risking your life going undercover anymore. I don't care that the FBI has sanctioned it. You could still get hurt. She would always end with, "I just don't understand what drives you to keep doing this undercover stuff!" But that is because my wife has never failed like I have.

* * *

The year was 1988 and it was Thanksgiving Day. I was living in the maximum-security unit, affectionately called "the Hole," in Terminal Island Federal Prison. The cell in which I lived was approximately five feet by seven feet. It was decorated in the latest industrial fashion: fine stainless steel (the toilet and sink) and concrete (the walls and floor). Actually, I was surrounded by steel. For example, the bunk beds were made with steel, as was the wire mesh that covered the window so no one residing in the cell could see anything out of the window, assuredly by design.

And of course, there was the cell's steel door that had a trap cut out of the middle for the purpose of passing food through to inmates. The orderlies or guards performed the perfunctory task of sliding our meal trays through the slot three times a day. But at night, even the steel trap door was shut and bolted down. Added security, I thought. Our cell also had the unique distinction of being cluttered with paperwork, transcripts, and court documents from my long, drawn-out criminal trial.

But for me, this Thanksgiving Day was memorable. My four-and-a-half-month trial was coming to an end. The government had called forty-eight witnesses to the stand, all of whom essentially said the same thing: "Barry Minkow was the mastermind of the fraud, he was in control, he knew everything that went on in the company, and the Mafia did not force him to lie to Wall Street."

My defense was to do what I did my whole life when something had gone wrong: blame someone else! I claimed that the Mafia made me lie, cheat, and steal. They forced me to live in a five-thousand-square-foot house and drive a Ferrari Testarossa! Not surprisingly, the jury didn't buy it.

My cellmate was John Hensley, a fifty-four-year-old bank robber with spider web tattoos on his elbows. We got along well, mostly because I was in trial all day and he had the cell to himself. Our dinner routine was simple and never changed.

Hensley had the bottom bunk bed and I climbed down from the top bunk to sit on his while we ate our meals together. Unfortunately for me, that meant facing the stainless steel toilet while gulping down food. How appetizing. But I was really looking forward to a good meal this Thanksgiving. The rumor was that on Thanksgiving, the food at Terminal Island was excellent. Because I was in trial every day and fed at the courthouse, my diet had consisted of baloney and cheese on white bread, two vanilla cream cookies, some stale potato chips, and juice which was so bad the inmates had a name for it: "Jim Jones Juice." Yep, I was looking forward to a good meal.

Unfortunately, the Hole was located so far away from the dining hall that when our meals were delivered in carts they first had to be reheated in microwave ovens before being distributed. The problem was that each Styrofoam tray contained meals with all of the courses (salad, Jell-O, turkey, and so on). I wasn't aware of that grim fact yet. I anxiously grabbed my Thanksgiving meal, sat down on Hensley's bottom bunk bed, and yanked it open. Much to my surprise, the Jell-O was runny and the salad was wilted due to the nuking process. The tiny portion of turkey was sucked dry of moisture and coagulated right before my eyes.

I angrily closed my tray and looked at Hensley who, because of his experience in prisons, had not complained and was already inhaling his meal. After glancing at Hensley, I looked at the stainless steel toilet inches from my face and at eye level, then I looked at the steel door that would not open and only had the trap part of it flipped outward to distribute the meals, then I looked at the concrete walls and quickly to the window that I could not see out of because of the steel mesh, and finally rested my eyes on the paperwork from my trial that littered the cell. I thought to myself, Maybe it's me. Maybe when they go to all this trouble to lock someone up in such an intentional way, maybe there is something wrong with me. Maybe it isn't someone else's fault. Maybe I am where I am today on Thanksgiving Day 1988 because I am to blame. Ouch!

It was one of the most liberating moments in all my life. I instantly had clarity. The lights flickered on and the comeback began, albeit very slowly. I was in the Hole at Terminal Island because of me. Rick Warren may have begun his runaway best-selling book The Purpose Driven Life with the phrase "it's not about you," but in coming back from failure, the first step is acknowledging the opposite-it is all about you.

* * *

In today's society, we have become masters at avoiding unpleasant or harsh terminology. For example, companies do not talk about people getting fired anymore because getting fired sounds so negative. Instead they use terms like rightsizing or downsizing. Car dealers have also succumbed to this methodology. Instead of selling used cars, they now sell preowned cars. I guess it takes the sting out of buying a car that isn't new. In fact, you can even get a certified pre-owned car. Now, in case you are suspicious that it had not really been pre-owned and that the dealer may be trying to pawn off one of those new cars on you, it is certified pre-owned! According to author and pastor John Ortberg, even shoplifters have different names now. They are no longer referred to as shoplifters but cost of living adjustment specialists. In truth, that term could potentially apply to just about everyone!

Now contrast the above examples with a true story from seventeenth-century England. Lord Protector Oliver Cromwell was posing for a portrait and became increasingly frustrated with the artist's inability to paint reality. He stopped long enough to stare deep into the eyes of the artist and then said, "Listen to me, when you paint me you paint me warts and all."

But in my life I discovered I did whatever I could to avoid having people see the real Barry Minkow. Not only was I concealing my fraud, I was also hiding the person behind the fraud. Why? I cared so much about what others thought of me that I wanted to control everyone's impression of me. Particularly when I failed. And I did this in every area of my life.

If I was late for a meeting, it was not because I was irresponsible; it was a traffic problem. If sales were down, it was not because I was lazy and not adequately following up leads, but market conditions. I so desired to control people's impression of me that I was self-deceived. Self-deception is the greatest obstacle to rebounding from failure. Why? Because if the problem is anything but me, then I will never go through the other nine steps that will help me come back from failure. When the blame for failure can be laid at someone else's doorstep, learning my culpability in the failure is no longer relevant.

That is why if you are going to come back from failure, there must come a point in time when the self-deception stops; a time when you resist the temptation to try to control people's impression of you and lay it on the line. A time when you say, "Maybe it's me. Maybe it is not market conditions, the fact that I was not breast-fed as a kid, my ex-wife or ex-husband, my parents, my children, my former business partner, or any other external factors. Maybe I am where I am at today because of me!" It will be your very own Thanksgiving Day experience, minus the cell. But when coming back from failure, the first step is acknowledging that it is all about you.

So what does this step look like? I don't know because I do not know your unique situation. However, I do know what it does not look like. For example, if, in explaining a past or present failure in your life, you use qualifying phrases like: "The business failed but ..." or "I did not make the team because ..." or "My marriage failed due to ..." or "I am in prison on account of ..." you should take a close look at what you're saying. You can fill in the blanks because we have all, in an effort to control people's impression of us, used these qualifying phrases in an effort to explain away failure.

My advice? Try this: "My business failed" (period). "My marriage failed" (period). "I did not make the team" (period). "I am going to prison" (period). "I made serious mistakes as a parent" (period). When you are able to drop the qualifiers while telling your story, you have met and satisfied the requirement of the first step to rebounding from failure. Become comfortable using the first-person point of view, because step one is all about you.

And do you know what's ironic about step one? The very people you sought to hide from so desperately by using qualifiers to explain failure will be far more impressed with your humility and ownership of the failure then they ever would have been when you attempted to justify it. People will forgive you. In fact, they will be more willing to give you a second chance when you have volitionally chosen ownership of past failures instead of playing the qualifying blame game. As Oliver Cromwell would say, "Tell your story, warts and all."

Experience has taught me that because people are forgiving and receptive to genuine ownership of failure, it is highly likely that someone will give you another chance. For a convicted felon, that person is the one who provides the first job upon release. For the entrepreneur, it is the investor who says, "You have learned from your past failures and I am going to give you another shot." For the divorced, it is that special person who decides to assume the best about your potential and not dwell on your past ... and says yes to the proposal.

I have much to say about these special "paramedic" type of people later in the book, but for now it should be noted that for convicted felons the first person to typically believe in us is our criminal lawyer, and in my case that was the very competent David Kenner. The second person who believed in me was far less predictable. In fact, he was the last person in the world I would have ever expected to risk taking a chance on Barry Minkow.

* * *

Within weeks of my release after serving eighty-seven months in federal prison, Dave Nezbit, the very FBI agent who supervised my investigation during the ZZZZ Best fraud, asked me to spend a week in Quantico, Virginia, training FBI agents on the techniques perpetrators use to deceive their victims. He explained that I would have to spend a week at the facility sleeping in the dorms with the agents in training. Since 11 September 2001, the FBI no longer allows nonagents to spend the night at their facilities. But in May of 1995, I was allowed. And there I was: one month sleeping in a federal prison and the next month spending a week at FBI training headquarters teaching agents.


Excerpted from DOWN, but not out by BARRY MINKOW Copyright © 2007 by Barry Minkow. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Meet the Author

Barry Minkow, cofounder of the Fraud Discovery Institute, earned a masters of divinity degree from Liberty University and today divides his time between busting investment scams and serving as the senior pastor of Community Bible Church in San Diego, California, where he lives with his wife Lisa and twin sons Robert and Dylan.

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