Menu

7.21.2011

Securities fraud case handled by Ryan O'Quinn receives national coverage including the LA Times, the Wall Street Journal, CNN and Law360.com, following the sentencing of one of the nation's most notorious securities fraudsters, Barry Minkow.

 

The Wall Street Journal reported:

Barry Minkow, who earlier this year pleaded guilty to defrauding Lennar Corp. in a scheme that cost the home builder more than $580 million in market capitalization, was sentenced to five years in federal prison by a Miami judge on Thursday.

Mr. Minkow was hired by a Southern California real-estate developer, who had several soured deals with Lennar, to investigate the company.

In early 2009, Mr. Minkow, now 45 years old, released an online report accusing Lennar of being a Ponzi scheme. Lennar's stock plummeted and in a matter of days ...

 

Law360.com reported:

Barry Minkow, the notorious former businessman who remade himself into a trusted fraud watchdog after being convicted of hustling investors, was sentenced Thursday in Florida to five years in prison for causing massive losses at one of the U.S.' biggest homebuilders.

The supposedly reformed Minkow, who became a pastor and anti-fraud crusader after he emerged from his previous seven-year prison stint, pled guilty in March to securities fraud for attacking Lennar Corp. with false accusations of widespread improprieties and Ponzi-like behavior.

Though Minkow's claim that Lennar was a "financial crime in progress" was a lie, it received media attention and prompted the FBI to open an investigation, which caused Lennar's share price to sink and allowed Minkow and a co-conspirator to profit through side trades — some of which Minkow made using inside information from his law enforcement sources.

"Minkow was able to take advantage of relationships with gatekeepers, including law enforcement, analysts and news media ... to victimize a Fortune 500 company," said Ryan Dwight O’Quinn, who prosecuted the case until he went into private practice at O’Quinn Stumphauzer PL just after Minkow agreed to a plea deal.

Minkow also milked public sentiment about the then-collapsing real estate market in order to lend more credence to his lies about supposed fraud at Lennar, according to O'Quinn.

"False information can have a big effect on even a large public company," O'Quinn said. "People should be aware that the quality of information is necessary to have an effective and efficient public market."

 

The LA Times reported:

In sentencing Minkow, Seitz ordered him to pay $583 million in restitution to Lennar, a sanction to which Minkow already had agreed in a civil case.

L.A. attorney Daniel Petrocelli, who represented Lennar, issued a statement referring to the ongoing investigation and Minkow's cooperation with federal authorities in hopes of someday having his sentence reduced.

"The Miami offices of the U.S. attorney and FBI deserve high praise for their efforts in prosecuting this case to protect the integrity of our securities markets," Petrocelli said. "We expect that the other individuals responsible for the illegal attack on Lennar's stock and shareholders will soon be brought to justice."

Minkow has turned over thousands of pages of documents concerning the case to prosecutors. His attorney, Alvin Entin, predicted that Minkow would wind up serving a reduced sentence of three years after being credited with completing the drug program and assisting prosecutors.

But a former U.S. attorney who investigated Minkow said that merely trying to cooperate was not enough to warrant a recommendation for a truncated sentence. Minkow would have to provide "substantial assistance" enabling prosecutors to make a case against someone else, said Ryan O'Quinn, who has left the Miami prosecutors' office and is now in private practice.

"Minkow sold himself as a hired gun, willing to employ his network to shake down corporate America," O'Quinn said. "Fortunately, Lennar Corp. withstood Minkow's pressure, helping the U.S. attorney in Miami to reveal the real financial crime in progress."

Contact Us

Our Location

1 SE 3rd Avenue
Suite 1820

Miami, FL 33131

P: (305) 371-9686
Facsimile: (305) 371-9687

Contact Us Today