SEC Suit Names 14 Linked to ZZZZ Best Scam : Fraud: The civil suit three years after the firm’s collapse accuses Barry Minkow and others of violating securities laws.

Three years after the collapse of fraudulent ZZZZ Best Co., the Securities and Exchange Commission on Wednesday filed a civil suit against its founder, Barry J. Minkow, and 13 others.

The 82-page complaint, filed in U.S. District Court in Los Angeles, accuses the defendants of violating securities laws in connection with a $15-million ZZZZ Best stock offering in 1986.

Minkow founded ZZZZ Best in his parents’ Reseda garage when he was just 16 years old. Within five years, the one-time carpet-cleaning concern was supposedly restoring buildings damaged by water and fire, and had a market value exceeding $200 million.

But the company essentially was a phony. Calling it the largest West Coast securities fraud in years, federal prosecutors estimated that creditors and investors lost $100 million when ZZZZ Best went bankrupt in July, 1987.

Minkow, 24, is now in prison in Englewood, Colo., serving a 25-year prison sentence for his role in the fraud. As part of his conviction, in March, 1989, Minkow also was ordered to pay $26 million in restitution.

Without admitting guilt in connection with the SEC complaint, Minkow and all but two of his co-defendants consented to the entry of an order permanently barring them from the violations in the complaint. If they violate the same laws again, they will face stiff penalties.

The only monetary settlement the suit seeks is $700,000 from Maurice Rind, a former Minkow associate twice convicted of securities fraud. Rind received $700,000 for selling ZZZZ Best generators.

An SEC attorney said Rind and Mark Roddy, who posed as the owner of a sham company created as a ZZZZ Best client, have not agreed to the SEC injunctions.

Of Minkow’s 13 co-defendants, five are in prison in connection with the collapse of the company. Two others completed jail terms.

Wednesday’s nine-count civil action centers on falsified financial and registration statements for the 1986 stock sale. The firm reported $5 million of revenue in 1986 and a subsequent $5 million in the first quarter of 1987 largely from an insurance restoration business that was “virtually entirely fictitious,” the SEC charges.