One of the most embarrassing ways for a key executive to be removed from office is to be Minkowed.
Getting Minkowed begins when you learn that a guy named Barry Minkow has just shorted your stock, betting that information he has just uncovered can make it go down.
Then you learn that Minkow has discovered those lies that you put on your resume.
Sure, you did it many years ago, just to get hired. But you've had to maintain these mischaracterizations ever since, just to remain employed.
Now, your board has to face investors who are asking "Gee, if there's lie on the resume, are there lies on the books, too?"
Your immediate removal is the only good answer to this question.
You've just been Minkowed.
And here's the most embarrassing part of the whole deal: Minkow is a convicted felon who told more lies as a teenager than you could ever dream up in your whole miserable adult life.
Patrick Avery was president and chief operating officer of Intrepid Potash Inc. (IPI) in Denver until he was Minkowed on Wednesday.
His name is now enshrined on a list of nearly a dozen executives who've been Minkowed, too.
Vahid Manian, former senior vice president of global manufacturing operations for Irvine, Calif.-based Broadcom Corp. (BRCM), got Minkowed in December.
Former MGM Mirage (MGM) CEO J. Terrence Lanni, a powerful figure in the gambling industry, was Minkowed in November.
Gregory Probert, who was president and chief operating officer of Herbalife Ltd. (HLF), got Minkowed in April.
The biggest problem with hyping your resume comes when your company files documents with the Securities and Exchange Commission that include your bloated bio.
When Intrepid Potash, maker of fertilizers, became a public company in April, it claimed that Avery received bachelor of arts degrees in biology and chemistry from the University of Colorado.
Turns out, Avery hung out at the school from 1970 through 1975 but never earned these degrees.
Intrepid Potash also claimed he earned a master's in engineering from "Loyola."
Sure, he hung out at Loyola Marymount University in Los Angeles from 1982 to 1985, but there's no record of a degree.
Neither the company nor Avery are doing interviews.
"The company accepted Mr. Avery's resignation because his misrepresentation of his academic credentials was a violation under the company's code of business conduct," said Chairman and CEO Robert P. Jornayvaz III in a statement on Wednesday.
"Pat Avery came to Intrepid with more than twenty years of service with J.R. Simplot and ARCO and his experience was very helpful to our operations since joining our company in 2007," Jornayvaz said.
(Note to Jornayvaz: Thanks for mentioning the other companies that may have fallen for Avery's fake degrees, too. But remember, Avery got Minkowed on your watch.)
Intrepid stock closed at $23.38 on Thursday, down about 28% from it's IPO price of $32. The stock has taken a bounce for the better since Intrepid announced Avery's resignation.
Minkow would not tell me whether he bagged any profits from shorting Intrepid's stock. He said he still holds a position because he is not done.
"We're still in because we think there are more irregularities," he said, promising to enumerate more red flags any day now.
Minkow runs a for-profit enterprise called the Fraud Discovery Institute in San Diego. Some may quibble with the ethics of shorting a stock and then ratting out the company's executives for a profit. But what else is Minkow supposed to do for a living? He's a felon.
And a famous one at that.
When Minkow was a teenager, he'd started a carpet cleaning outfit called ZZZZ Best Co. and took it public with a dizzying array of lies. He even booked mob money as revenue. And when this amazing Ponzi scheme finally blew, he went to prison for nearly eight years, at age 23.
After prison, he earned several degrees from Jerry Falwell's Liberty University, including a master's degree in divinity. And today, in addition to investigating fraudulent statements from companies, he is pastor of Community Bible Church in San Diego.
So I wondered: Wouldn't it be fun to Minkow Minkow? I called Liberty's registrar's office. And guess what? He really did earn all these degrees. I guess the art of Minkowing isn't all that easy.
Minkow says he has built a database from which he can quickly check the degrees that corporate executives claim.
"We look for skin of the truth stuffed with a lie," he said.
So executives with fake degrees, beware.
You may soon be Minkowed.
--Al's Emporium, written by Dow Jones Newswires columnist Al Lewis, offers commentary and analysis on a wide range of business subjects through an unconventional perspective. He can be reached at 201-938-5266 or by email at al.lewis@dowjones.com.
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