GRAHAM MESSICK: If you were going to start a hall of fame for con men, Barry Minkow would have to be one of the first inductees. He was one of the most famous stock swindlers of the 1980s, and certainly the youngest. Age 20, he was the boy wonder of Wall Street, CEO of a $300 million company. At 22, he'd been convicted of 57 counts of fraud and was off to federal prison. Now at age 39, Barry Minkow is back in the spotlight, not for committing fraud, but for exposing it. He's seeking redemption as an evangelical minister and by going undercover to help federal law enforcement agencies crack a number of important cases, proving that when it comes to con men, it takes one to know one. Everything you say today, you're going to tell me the whole truth, nothing but the truth, right? BARRY MINKOW: Yeah. Brings back memories. GRAHAM MESSICK: As well it should. 19 years ago, Barry Minkow perpetrated a con so audacious that it's still taught as a case study in business and accounting schools. BARRY MINKOW: Call me when the market closes. GRAHAM MESSICK: He founded ZZZZ Best Carpet Cleaning when he was just 16 years old, then franchised it into a chain, and finally took it public. BARRY MINKOW: We clean carpets with such care, I'll guarantee the work and our price in writing. GRAHAM MESSICK: On paper, he was worth $100 million. He drove a Ferrari, and even appeared on Oprah Winfrey, touting to himself and his stock. BARRY MINKOW: Think big, be big. OPRAH WINFREY: Really? BARRY MINKOW: End of story. I started with the best of intentions. Really, I can say that much. And when economic pressure reared its ugly head and I couldn't make payroll, I lied and stole and cheated. GRAHAM MESSICK: He borrowed money from the mob, cooked the books for accountants, and lied to investors about 10s of millions of dollars in insurance contracts to restore buildings damaged by fire and water. BARRY MINKOW: We were claiming to be doing restoration jobs totaling in excess of $50 million. We weren't doing any. And so-- GRAHAM MESSICK: None? BARRY MINKOW: None. Well, I mean, I did, like, some toilet overflows and Mrs. Jones house. But that's certainly didn't constitute $50 million. GRAHAM MESSICK: How did you manage to convince bankers, and lawyers and investors that this was on the up and up? BARRY MINKOW: By getting an auditing firm and getting them the paperwork, and much to our shame, creating documents that would support earnings and contracts, 22,000 documents. GRAHAM MESSICK: All phony? BARRY MINKOW: Cutting and pasting, white out. GRAHAM MESSICK: When a major accounting firm finally demanded to see one of the restoration jobs, Minkow found a brand new building in Sacramento, paid off a guard, and brought the auditors in on a Saturday morning. BARRY MINKOW: We'd give the guard $50 to recognize us. We'd bring the auditors in. They'd say hi. And we'd walk in, just say, yeah, we just did all this. We'd put signs about ZZZZ Best. It was like a Hollywood production. And we went to great lengths to fool and to deceive. GRAHAM MESSICK: But it worked. BARRY MINKOW: Temporarily. Most frauds, that's the way they are. I call it the second law of fraudo-dynamics. They go from order to disorder. They work, but it's not if you're going to get caught, but when. GRAHAM MESSICK: When it did collapse, he left investors holding the bag for $26 million, wiping out life savings and ruining lives. He spent seven years and four months behind bars. And it was in the hole at Terminal Island in Los Angeles that he had an epiphany. BARRY MINKOW: When I was 1988 in prison, Thanksgiving dinner, I'm sitting there with a bank robber. His name's John Hensley, great guy, 50 some odd years old. He's got spider web tattoos here. There's a toilet here. Here's the bunk. Here's Hensley. They feed me Thanksgiving dinner through a hole in the door. And they nuke it, the salad and everything. Because by the time it got to the hole from the kitchen it was cold, so they nuke it, salad and all, Jello and all. I look at Hensley. I look at the nuked Jello. I look at the toilet. I look at the door that don't open. And I'm thinking, you know, maybe it's me. Maybe there's something wrong with me. Maybe when they go to all this trouble to put you in a place like this, you better do some changing. GRAHAM MESSICK: And he did. He earned masters degrees in religion and divinity, and now preaches to 1,400 parishioners at his Community Bible Church in San Diego. But he doesn't go near the collection box. BARRY MINKOW: The better part of wisdom says alcoholics shouldn't be bartenders. I mean, I just don't want to be part of it. GRAHAM MESSICK: Do you talk about your sins? BARRY MINKOW: All the time. GRAHAM MESSICK: Evangelism has been known to be a refuge for con men. BARRY MINKOW: Yeah. Our church, we we're not like that. We tell people who are visiting not to give. We're not a TV ministry. We don't say, if you don't send me money I'm going to die. It's not that kind of ministry at all. There's this God who created you-- GRAHAM MESSICK: But not all of his preaching is done in church. He founded a company called the Fraud Discovery Institute, and lectures business students, law enforcement officers, and corporate executives on white collar crime. He actually began investigating white collar crime two years ago when a friend asked him to check out a questionable investment. BARRY MINKOW: I'd looked at the thing. It was volumes of information and websites. And I thought to myself, if I was a crook, what would I do to pull this off? And I thought, there's a unique approach. GRAHAM MESSICK: He quickly discovered the company, Mx Factors, was operating without a business license and appeared to be a scam. So he wrote up a report and sent it off to a federal postal inspector named Tim France. TIM FRANCE: He urgently asked me to look into it. GRAHAM MESSICK: It turned out to be a big fraud. TIM FRANCE: Yes, $35 million in losses. GRAHAM MESSICK: And you wouldn't have known about this unless Barry Minkow had brought it to you. TIM FRANCE: That's absolutely right. I probably would not have known about it until it collapsed. GRAHAM MESSICK: Since then, Minkow has helped law enforcement expose 11 suspected scams. He's even gone undercover for the FBI wearing a wire. The biggest case involved Financial Advisory Consultants, run by James Lewis, who's charged with bilking investors out of $300 million in retirement money. BARRY MINKOW: I took one look at him and it was like a flashback. I could just look in his eyes and know he had 80 balls juggling in the air. Phone calls were starting to come in. You have that look. And unless you've been a perpetrator about to be exposed, you don't know what that look is. And I could just tell in his eyes. GRAHAM MESSICK: But despite all the help he's given to law enforcement, working with Minkow can be a frustrating experience. TIM FRANCE: He is a bull in a China shop. He expects us federal investigators to immediately jump on it and have this thing shut down within a couple weeks. You just can't do that. First of all, the information that I'm getting is from Barry Minkow. So I have to re-verify everything he has done already. GRAHAM MESSICK: You trust him. TIM FRANCE: Trust but verify. GRAHAM MESSICK: Minkow is much less interested in prosecuting frauds than he is in exposing them while they're still going on. He searches public records, employs private detectives, and goes undercover to perform the kind of due diligence most investors don't know how to do. BARRY MINKOW: The problem that I have the minute I get the call, Steve, is here's what happens. I get a probable cause. And I'll listen in my mind. The clock ticks. And I know that every day I don't do something, somebody's pouring money into this deal. And they're going to end up feeling like I made people feel back in the 1980s. And that clock is just ticking in my head. I got to just-- I got to shut this down. I've got to-- GRAHAM MESSICK: Before anybody else puts more money in it. BARRY MINKOW: And it's a race against time. GRAHAM MESSICK: While we were researching the story, he received a tip about this Texas couple, Debby and Eric Berry. They control two Dallas-based companies called Genesis Capital Management and Genesis Alliance, which bankroll a nonprofit organization called the Nehemiah Fund. It promises a 100% matching grant to churches willing to put a minimum of $500,000 into a bank account controlled by a representative of the Berrys. BARRY MINKOW: Genesis Capital, Genesis Alliance, and the Nehemiah Fund is what I believe a financial crime in progress. GRAHAM MESSICK: What makes you so convinced it's a crime in progress? BARRY MINKOW: All the red flags, every one of them. No accountability from the Berrys. They just are one man shows. The untenable business model-- normally and regularly, people who are in the grant business don't ask for your money first before they double it. GRAHAM MESSICK: He decided to go undercover and apply for a matching grant. Wearing a hidden camera provided by 60 Minutes, which was concealed in a pair of glasses, and carrying a phony bank statement prepared by the FBI, stating his church add an excess of $2 million, he met the Berrys in a Dallas restaurant. One of the first things he asked was how much money was in the fund. BARRY MINKOW: What can I say without being misrepresenting to my elder board? DEBBY BERRY: Tens of millions. GRAHAM MESSICK: The Berrys told him the money from the matching grants comes from a commercial venture they control called Genesis Capital Management, which they claim pays out a return of 300% on investments totaling more than a billion dollars. BARRY MINKOW: So you guys invest ethanol plants, various apartment complexes, resort hotels? You're in all that stuff? ERIC BERRY: Different stuff, yeah. BARRY MINKOW: Amazing. GRAHAM MESSICK: Minkow searched the public records, but was unable to turn up assets or holdings consistent with the Berry's claims. He did find outstanding tax liens against them totaling more than $240,000, and discovered that they were operating out of three small rooms in this Dallas office park. BARRY MINKOW: They give you three to one your money back if they're in a business with you commercially, one to one if you're a nonprofit? They claim to have $1.5 billion? And yet they operate out of 900 square feet where they share a secretary with everybody else on the floor? I mean, I have a church and our budget's like $1.8 million. It tastes like eight elders and 17 employees to run $1.8 million. How much the more $1.5 billion. It's just misrepresentation after misrepresentation. GRAHAM MESSICK: To get an independent evaluation of the Berrys' operation, we went to Sean Delany, a former Assistant Attorney General in New York state, and an expert in charity fraud. We gave them Minkow's report, and transcripts of all the tape conversations. SEAN DELANY: It has the indicia of a Ponzi scheme. And yes, it appears to be in its early stages. GRAHAM MESSICK: What's your general impression of the work that Barry Minkow has done on this? SEAN DELANY: For someone who does not have the tools of a law enforcement agency at his disposal, Mr. Minkow does quite thorough work. I was impressed with his report. GRAHAM MESSICK: He's familiar with the field of fraud. SEAN DELANY: I've heard that he is. GRAHAM MESSICK: If you had money with the Berrys right now, knowing what you know, would you call up the Berrys and say I want my money back? SEAN DELANY: I'd demand my money back in writing and I'd hire myself a good lawyer. GRAHAM MESSICK: The Berrys have not been charged with any crime. They declined our request for an interview, and for copies of their latest financial statements. But since Minkow issued his report, the FBI, the Texas Attorney General, and the Montana Auditor's Office have all begun investigations. Minkow sees uncovering fraud as an extension of his ministry, but wants everyone to know it's not easy. BARRY MINKOW: One report is wrong, I'm done. When you're Barry Minkow and you say something's a fraud, get law enforcement involved, blow the whistle, and you're wrong, it's over, over. It's called one and done. And that's why I'm so afraid to take on new stuff. Because I'm like, I've been right, like, 11 of 11 times. And it's like, nobody bats 1,000. And I'm going to be wrong and I'm not perfect. And I make mistakes and I don't want to take on cases. And then, the ticking clock, the investors investing, and you've got to move, and you've got this-- but I can't be wrong. But this guy's going to lose money, and the-- [SIGHS] GRAHAM MESSICK: He's now helped authorities uncover far more fraud than he ever perpetrated. And as a result, Judge Dickran Tevrizian, who originally sentenced Minkow 25 years, released him from the terms of his probation. DICKRAN TEVRIZIAN: He has done some good things. He's uncovered several hundreds of million dollars worth of frauds. And I give them credit for that. GRAHAM MESSICK: So you, I mean-- this is real. You've heard from federal authorities, federal agencies, that he has helped them in various investigations. DICKRAN TEVRIZIAN: Not only the federal agencies, local agencies, but the insurance industry in covering the loss of frauds that have been committed. Autographed copy of this book-- GRAHAM MESSICK: And Minkow has not lost his flair for self promotion. He's written a book called Cleaning Up. And his agent is negotiating with several production companies to film his life story. What do you want? What are you looking for? BARRY MINKOW: I want everybody who's ever failed to know that they can come back from failure. You can take what you used to use for evil and manipulative reasons and to hurt people, and use those same talents and abilities to help them. And I believe people can change. GRAHAM MESSICK: One footnote, Genesis and Nehemiah are common names used by many legitimate companies and charities. For more information on the enterprises operated and funded by the Berrys, as well as more of our interview with Barry Minkow, go to our website at 60minutes.com. [TICKING CLOCK] SPEAKER 1: 60 minutes. We're always on cbsnews.com.