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Pvt. Danny Chen, 1992�2011
He was 19 years old, a scrawny six-four, and wanted nothing more than to join the Army. Just like so many other young men. But very few from Chinatown.
By Jennifer GonnermanPublished Jan 6, 2012

Private Chen's bedroom on January 5.
(Photo: Ashley Gilbertson/VII Photo for New York Magazine)

On the evening of October 3, 2011, Su Zhen Chen heard a knock at the door. In the hallway outside her apartment on Avenue D stood three soldiers. Su Zhen doesn't speak English, and none of the men spoke Taishanese. She couldn't understand what they were telling her, but figured it must have something to do with her 19-year-old son, Danny, an Army private stationed in Afghanistan. She called her brother in Staten Island, and he handed the phone to his wife, Melissa, who speaks fluent English.

The soldier on the other end of the line asked her who she was, then quickly got to the point: �Can you tell Danny's parents that Danny died?� Danny had been on guard duty, the soldier told his aunt, and had been found with a gunshot to his head. �He's dead,� he said. �Can you tell his mother that?�

Melissa turned to her husband. �What am I supposed to say?�

�Just say whatever you heard.�

So she did, telling Danny's mother, �They said he died. He had a gunshot to his head.�

At first, Danny's mother did not seem to understand. �Okay,� she said. �He has a gunshot to his head. Is he okay?�

�No,� Melissa said. �He's dead.�

Slowly, the news sunk in. In Staten Island, on the other end of the phone line, Su Zhen's relatives could hear the sound of a long, tortured scream.

Danny's mother had never wanted him to become a soldier. If it had been up to her, after high school he would have attended a college close to home and grown up to be something else, something safer. Maybe a pharmacist. Danny was her only child, born in 1992, just five years after she'd immigrated to New York City from the Taishan region of China and three years after she brought over her husband. Growing up in Chinatown, Danny had always seemed an exemplary son: obedient, studious, devoted. And very attached to his mother. While Danny's father, Yan Tao Chen, had put in ten-hour days working in the kitchens of Chinese restaurants, his mother had been the one who raised him.

She didn't want to see him join the Army, and made it known. Danny told his best friend, Raymond Dong, that he feared his mother might disown him if he enlisted, so he signed up without telling her first. But Raymond agreed with Su Zhen; he too thought Danny would be better off sticking around New York and earning a degree, maybe at Baruch College, where he'd taken prep courses the summer after high school. �You could do a lot better than join the Army,� he told Danny. �You're so smart.� It was true: During his senior year, Danny would fall asleep in math class, wake up when the teacher called on him, and still give the right answer.

But in a community of immigrant strivers, Danny wanted something different for himself. During his senior year, while everyone else was polishing their college applications, he was dreaming about the Army. Many Chinese-American families with just one son won't let him join the military, since sons are so highly prized in their culture. But this did not deter Danny. �I want to live for myself,� he told Raymond, �not for someone else.�

When asked about his decision to enlist, his friends and relatives offer up myriad explanations: He planned to join the NYPD and thought the Army would be good training; he wanted a steady income to help support his parents; he thought college would be boring; he loved action and adventure, and wanted more of it in his own life; he was anxious to test himself and prove his mettle. Perhaps he was hoping to strike out on his own, to put some distance between himself and his parents. But one fact looms over all the �others: He joined the Army because he wanted to, not because he needed to, and knowing all the while that he was likely to be catapulted into a combat zone. In fact, he was eager to get there. �hooah for leaving,� he wrote in his diary on his way to basic training last January. �Excited as heck.�

Nine months later, he was found dead in Afghanistan of what the Army has described as �an apparent self-inflicted gunshot wound.� Since Danny Chen's death, details of his story have slowly emerged, relayed by Army officials to his family. A group of his superiors allegedly tormented Chen on an almost daily basis over the course of about six weeks in Afghanistan last fall. They singled him out, their only Chinese-American soldier, and spit racial slurs at him: �gook,� �chink,� �dragon lady.� They forced him to do sprints while carrying a sandbag. They ordered him to crawl along gravel-covered ground while they flung rocks at him. And one day, when his unit was assembling a tent, he was forced to wear a green hard-hat and shout out instructions to his fellow soldiers in Chinese.

Chen in 2010.
(Photo: Courtesy of the Chen Family)

The Army recently announced that it was charging eight soldiers�an officer and seven enlisted men�in connection with Danny Chen's death. Five of the eight have been charged with involuntary manslaughter and negligent homicide, and the coming court-martial promises a fuller picture of the harrowing abuse Chen endured. But even the basic details are enough to terrify: What could be worse than being stuck at a remote outpost, in the middle of a combat zone, tormented by your superiors, the very same people who are supposed to be looking out for you? And why did a nice, smart kid from Chinatown, who'd always shied from conflict and confrontation, seek out an environment ruled by the laws of aggression?

Danny Chen was born in New York City, but he couldn't speak much English before starting Chinatown Head Start in the fall of 1996. Mostly he spoke �Taishanese�his parents' Chinese dialect. The Head Start program was filled with the children of restaurant and garment-factory workers, and there was nothing unusual about being unable to speak English, even if you'd spent your whole life in America.

Compared with his peers, Danny had an advantage. �He had such a loving mom,� says Renny Fong, who taught him in pre-K and kindergarten. Later, as Danny grew up, a friend had another name for it: �mama's boy.� While other kids were raised by grandparents, with both parents working long hours, Danny had a mother who dropped him off and picked him up every day, who went on school trips and made sure he stayed focused. By the time he reached first grade, Danny was not only fluent in English, he'd won a slot in the school's gifted program.

The family lived in an Elizabeth Street apartment so tiny that the stove and fridge occupied a corner of the living room. There was only one bedroom, and for ten years Danny slept in a bed just a few inches from his parents. He was not typically one to complain, but in middle school he made a sign and posted it on the bedroom wall: �I want a room!� Not long after, his parents got him one, moving out of Chinatown to find it. The new place was more spacious, with two bedrooms and a separate kitchen, but its location was much less safe: in a housing project on Avenue D.

�I want to live for myself,� Chen said. �Not for someone else.�

Twice over the next few years Danny was set upon by other kids in the neighborhood. Once they stole his cell phone; he called home from a subway station, and when his father came to retrieve him, he found Danny so shaken up that he was in a huddle, his arms wrapped around himself. Another time, a group of boys tried to rob him, but he got away, called the cops, and drove around with them to track down his assailants. When he discovered how young they were, he declined to press charges, saying he worried that a conviction might harm their futures.

In middle school at M.S. 131 on Hester Street, he was a gentle kid, his friend Jing Mei Huang recalls, and would often go straight home from school to do his homework. He tried to avoid confrontation, though one day during gym class he accidentally hit a girl with a ball, enraging her boyfriend so much that he started kicking Danny. �Danny didn't flinch at all,� Huang recalls. �He just kept going to his locker.� When a friend asked him later why he didn't fight back, he just said: �Let it go.�

In high school, things began to change. He started lifting weights, spending every afternoon at the Y on Houston Street with his friend Raymond Dong. Danny wasn't very athletic, but he was determined to try to put some muscle on his skinny frame. He didn't have any girlfriends in high school��He was really, really shy,� says a friend�and when he wasn't working out, Danny would pass the hours playing handball and video games like Call of Duty. Or eating. Most days, he and Raymond would eat all afternoon�one meal right after school, then another after they worked out, then home for dinner. But Danny couldn't seem to gain any weight. By the end of high school, he was six foot four and towered over his friend, but he still looked as thin as a feather.

The letters home from basic training were handwritten on Army-issued stationery, adorned with the boldfaced motto: army strong. �Dear Mom and Dad,� Chen wrote in January 2011. �I'm suffering here but it's not too bad so far.� He was then in week two at Fort Benning, with seven more weeks to go. While his friends were sitting in college classrooms back in New York�Dong was at St. John's, Huang was enrolled at St. Francis�Chen was limping around training camp, a giant blister on his foot. But he had no regrets. �I love this place,� he wrote.

Chen's parents on January 5.
(Photo: Ashley Gilbertson/VII Photo for New York Magazine)

The letters he sent home over the next two months offered a running commentary on basic training and at times read like letters from camp:

�I've taken 6 showers since I got here, 2 of which are 30 second ones. If this letter stinks � o well.�

�Everyone here likes country music � Lots of people here are from the south too so they know every song. Weird as hell to me.�

�We call each other by our last names here. I might not even respond to Danny anymore.�

�Random Facts�we running out of toilet paper, TP is like money here.�

�I might come back using curses like crazy, everyone here even the Drill Seargants say fuck like every sentence.�

�In the showers � people bust out singing songs. Tonight they took their waterproof headlights and started dancing and singing. Weird as fuck but it was fun.�

Unlike his fellow recruits, Chen didn't have to worry about using expletives in his letters, since he knew his parents would never read them. They couldn't read English, and, like many first-�generation �Chinese-Americans, he couldn't write in Chinese. His parents would have to enlist a relative to translate, and he knew his curses would be edited out. Besides, it felt great to sound like a soldier.

And not just sound like one. For Chen, one of the Army's appeals was the chance to actually fire real weapons. No more just playing shooter video games in his bedroom. �I been shooting the rifle,� he wrote home in January. �It's dam awesome.� Later, he added: �by far the best weapon I shot is the .50 caliber � They didn't let us shoot real ones but the feel was the same. That .50 Cal can rip a man in half as said by the Sergeants � it's like some call of duty shit.�

When he wrote about his family, he could be just as exuberant. �Happy Valentines Day Mom!� he wrote in February. �Dad should have gotten her roses, if he didn't, tell him to, my request from Basic T since I can't get her anything. Still missing both of you.�

Two-thirds of the way through camp, as the training got more strenuous, relations in his platoon became increasingly tense. �People here are getting more angry now,� Chen wrote home. �There have been a shit ton of fights, not fully physical, but more just pushing.� Chen himself didn't like to brawl, and when he did get into a fight with his bunkmate, there was no doubt who prevailed: �got my ass handed to me,� Chen wrote in his diary. �Didn't even stand a chance.�

Inevitably, basic training produced dropouts. By mid-March, many of the recruits Chen had started with were gone, unable to keep up. �People here are leaving left and right now, everyone is getting stress fractures and broken legs,� he wrote. �All of the weaker people have either left or gone home for 30 days to heal. Now I'm the weakest one left.�

Chen stood out in another way, too. �Everyone knows me because I just noticed, I'm the only chinese guy in the platoon,� he wrote home. His fellow recruits called him Chen Chen, Jackie Chan, and Ling Ling. But, he added, �Don't worry, no one picks on me � I'm the skinniest guy and weigh the least here but � people respect me for not quitting.�

Four weeks later, the Asian jokes hadn't stopped. �They ask if I'm from China like a few times day,� he wrote. �They also call out my name (chen) in a goat like voice sometimes for no reason. No idea how it started but now it's just best to ignore it. I still respond though to amuse them. People crack jokes about Chinese people all the time, I'm running out of jokes to come back at them.�

Chen had no friends or relatives in the Army before he joined, so he had no firsthand information about how tough it can be for Asians in the military. Anyone who stands out as different�because of his race or ethnicity, because he's quiet and shy, because he's weaker than the others�can find himself singled out and targeted. Sometimes it's just a matter of getting picked on; sometimes it takes the form of physical abuse. Many former soldiers say that, in part because of low enrollment and in part because of enduring prejudice, the military is especially tough on its Asian soldiers. And in the aftermath of his death, Chen has come to represent the plight of the Asian-American soldier, his family and a local advocacy group joining forces to propel his story into the national press in an effort to end racism and hazing in the military.

One of the most high-profile cases of the past year involved Harry Lew, a 21-year-old lance corporal in the Marines, who was found asleep on guard duty in Afghanistan one night last April. It was the fourth time. After a sergeant announced over the radio that �peers should correct peers,� his fellow lance corporals ordered him to do push-ups, then stomped on his back and legs if he didn't do them right; poured sand in his mouth; punched him in the back of his helmet; and forced him to dig a chest-deep foxhole. At 3:43 a.m., while crouching in the foxhole, he placed the muzzle of his M249 inside his mouth and pulled the trigger.

In the months since Chen died, Harry Lew's story has come up often as an example of how bad things can get for Asian-Americans in the military. But a closer parallel to how Chen was treated may be the story of 20-year-old Brushaun Anderson, one of the few �African-American soldiers in a unit deployed in Iraq. A report in Stars and Stripes detailed how a group of superiors singled him out: overpunishing him for even the smallest mistakes; ordering him to put on his body armor and do extreme physical exercises; calling him �dirty� and forcing him to wear a plastic trash bag. His tour of duty ended in 2010, inside a portable toilet in Iraq, when he fired a bullet into his forehead.

Danny Chen turned 19 years old at Fort Wainwright in Alaska, a new member of the 1st Stryker Brigade Combat Team, known as the �Arctic Wolves.� He had arrived in mid-May, shortly after some 4,000 soldiers from Fort Wainwright had deployed to Afghanistan. For those soldiers left behind, life felt like a waiting game; everyone knew it was only a matter of time until they, too, would be deployed. Some looked forward to shipping out with a mix of anxiety, anticipation, and dread. Chen couldn't wait.

He lived in the barracks, but spent most of his free time at the rental house off-post in Fairbanks where Bryan Johnson, a friend from basic training, lived with his wife, Mary. The Johnsons' house was a favorite hangout; six or seven friends would drop by on weekday nights, ten on weekends. To pass the hours, the soldiers would play Call of Duty, toss a ball around, watch TV, swap jokes.

Chen was the youngest of the group and more innocent. When his friends learned he'd never gotten drunk before, they took it upon themselves to teach him the joys of beer pong�and keg stands. Chen was so tall that it took three guys to hoist his legs over his head, so he could gulp from the tap upside down. �He did pretty good for his first keg stand,� Mary recalls.

Chen and Johnson had expected to deploy to Afghanistan in July, but at the last moment they were told they wouldn't be shipping out just yet. The news enraged them: Soon they were stomping around the house in frustration. �They were throwing a temper tantrum,� Mary says. Chen sent a text to his best friend in New York. �Holy fuck I got bumped off the flight, I go in August now � fml,� he wrote, using the acronym for �fuck my life.�

�All the weaker people have left,� Chen wrote. �Now I'm the weakest one left.�

Phone calls and e-mails are prohibited during most of basic training, so soldiers take to letter writing, often for the first time in their lives. By the time Danny Chen had arrived in Alaska, however, he'd stopped writing letters, since he could call home every day. But communications with his family dried up again once he reached Afghanistan on August 13. From there, he could only phone home every few weeks.

When he got access to the Internet, he'd send Facebook messages to his cousin Banny, who would relay messages to his parents. On August 25, Banny wrote: �Your mom wants to know where you specifically are and if you can ever call back. Also what you are doing there, if it's hard work.� The response from Danny came two days later: �Tell her that no shit its hard work, but its what I signed up for.�

Near the end of August, he was sent to a combat outpost in Kandahar Province, which had been dubbed �The Palace� by the Canadian troops who had been there previously. It was anything but. A Canadian news agency later described this part of the country as �a boiling cauldron of never-ending roadside bombs, booby traps, and ambushes that drove even the best right up to the edge.� The last two Canadian casualties there were suspected suicides.

When he arrived, Chen was at the bottom of the social hierarchy: a newcomer to his unit, a lowly private, still just a teenager, in a combat zone for the first time. And the only Chinese-American in his platoon. In a meeting with Chen's parents on January 4, Army officials said that his superiors had considered him not fit enough when he arrived, and singled him out for excessive physical exercise: push-ups, flutter-kicks, sit-ups, sprints done while carrying a sandbag. Such punishments resemble the �smokings� that drill sergeants mete out at basic training to correct mistakes. But, in Chen's case, it wasn't long before this campaign of �corrective training� escalated into sheer brutality.

The eight men later charged in connection with his death are all white and range in age from 24 to 35; they include one lieutenant, two staff sergeants, three sergeants, and two specialists. Members of this group allegedly harassed and humiliated Chen from almost the day he arrived at The Palace. They belittled him with racial slurs. They forced him to do push-ups with a mouthful of water, refusing to let him swallow or spit any out. And, on September 27, a sergeant allegedly yanked him out of bed and dragged him across about 50 yards of gravel toward a shower trailer as punishment for supposedly breaking the hot-water pump. He endured bruises and cuts on his back. Army officials told Chen's family that although the leader of his platoon found out about this incident, he never reported it as he was required to.

One week later, on the morning of October 3, Chen was scheduled to report for guard duty at 7:30 a.m. But when he got to the guard tower, he realized he'd forgotten his helmet and didn't have enough water. A superior sent him back to the trailer to get what he needed, then allegedly forced him to crawl, with all his equipment, across some 100 meters of gravel in order to return to the tower so he could start his shift. While he was on the ground, two other superiors pelted him with rocks. And once he reached the tower, a superior grabbed him by his body armor and dragged him up the steps.

He entered the tower at about 8 a.m. The soldier he was relieving asked him if he was okay. �No sweat,� Chen answered. The �other soldier left. At 11:13, from inside the tower, the sound of a gunshot echoed through the Palace.

These days, inside the Chens' apartment, the loudest sound is the hum of the two fish tanks in the living room. For the past three months, a shrine to Danny Chen has been sitting atop a foldout table in the corner of this room. A framed photo of him in his dress blues looks out over a scented candle, a vase of lilies, the �folded-up American flag that once covered his casket, a folded-up Alaska flag (sent by the governor of Alaska), a few medals, and a thick pile of condolence letters typed on official stationery�from the secretary of the Army, the chairman of the Joint Chiefs of Staff, the secretary of Defense.

In the center, a plate holds Danny's favorite foods. One morning in December, there are cookies, clementines, and an open bag of Skittles. A few packets of ketchup are visible underneath, at the bottom of the plate, left over from earlier meals. His mother changes the offering every few days, usually American food, since that's what he preferred: sometimes Burger King, sometimes Subway, sometimes pizza. Two plastic bottles�one Coke, one water�stand next to the plate.

Down the hallway, inside his bedroom, the doorway still shows the marks he made recording his high-school growth spurt. His collection of video games�mostly shooter games like Dead Space and Left 4 Dead�line a shelf above his desk. And now three plastic crates cover the bedroom floor, each filled with clothes that were shipped back from Afghanistan.

For his mother, walking by this empty room every day has become too painful to bear; she and her husband have put in for a transfer to move to another apartment. On an afternoon not too long ago, she and Danny's father showed me into Danny's room. His mother remained in the hallway, a tissue in one hand. When asked how she is holding up in the wake of her son's death, she lifts the tissue to her eyes. �I'd rather go with him,� she says.



What Defines a Meme?
Our world is a place where information can behave like human genes and ideas can replicate, mutate and evolve
By James Gleick
Photographs by Stuart Bradford
Smithsonian magazine, May 2011, Subscribe
View More Photos » With the rise of information theory, ideas were seen as behaving like organisms, replicating by leaping from brain to brain, interacting to form new ideas and evolving in what the scientist Roger Sperry called "a burstwise advance."
Illustration by Stuart Bradford
What lies at the heart of every living thing is not a fire, not warm breath, not a 'spark of life.' It is information, words, instructions," Richard Dawkins declared in 1986. Already one of the world's foremost evolutionary biologists, he had caught the spirit of a new age. The cells of an organism are nodes in a richly interwoven communications network, transmitting and receiving, coding and decoding. Evolution itself embodies an ongoing exchange of information between organism and environment. "If you want to understand life," Dawkins wrote, "don't think about vibrant, throbbing gels and oozes, think about information technology."

We have become surrounded by information technology; our furniture includes iPods and plasma displays, and our skills include texting and Googling. But our capacity to understand the role of information has been sorely taxed. "TMI," we say. Stand back, however, and the past does come back into focus.

The rise of information theory aided and abetted a new view of life. The genetic code—no longer a mere metaphor—was being deciphered. Scientists spoke grandly of the biosphere: an entity composed of all the earth's life-forms, teeming with information, replicating and evolving. And biologists, having absorbed the methods and vocabulary of communications science, went further to make their own contributions to the understanding of information itself.

Jacques Monod, the Parisian biologist who shared a Nobel Prize in 1965 for working out the role of messenger RNA in the transfer of genetic information, proposed an analogy: just as the biosphere stands above the world of nonliving matter, so an "abstract kingdom" rises above the biosphere. The denizens of this kingdom? Ideas.

"Ideas have retained some of the properties of organisms," he wrote. "Like them, they tend to perpetuate their structure and to breed; they too can fuse, recombine, segregate their content; indeed they too can evolve, and in this evolution selection must surely play an important role."

Ideas have "spreading power," he noted—"infectivity, as it were"—and some more than others. An example of an infectious idea might be a religious ideology that gains sway over a large group of people. The American neurophysiologist Roger Sperry had put forward a similar notion several years earlier, arguing that ideas are "just as real" as the neurons they inhabit. Ideas have power, he said:

Ideas cause ideas and help evolve new ideas. They interact with each other and with other mental forces in the same brain, in neighboring brains, and thanks to global communication, in far distant, foreign brains. And they also interact with the external surroundings to produce in toto a burstwise advance in evolution that is far beyond anything to hit the evolutionary scene yet.

Monod added, "I shall not hazard a theory of the selection of ideas." There was no need. Others were willing.

Dawkins made his own jump from the evolution of genes to the evolution of ideas. For him the starring role belongs to the replicator, and it scarcely matters whether replicators were made of nucleic acid. His rule is "All life evolves by the differential survival of replicating entities." Wherever there is life, there must be replicators. Perhaps on other worlds replicators could arise in a silicon-based chemistry—or in no chemistry at all.

What would it mean for a replicator to exist without chemistry? "I think that a new kind of replicator has recently emerged on this very planet," Dawkins proclaimed near the end of his first book, The Selfish Gene, in 1976. "It is staring us in the face. It is still in its infancy, still drifting clumsily about in its primeval soup, but already it is achieving evolutionary change at a rate that leaves the old gene panting far behind." That "soup" is human culture; the vector of transmission is language, and the spawning ground is the brain.

For this bodiless replicator itself, Dawkins proposed a name. He called it the meme, and it became his most memorable invention, far more influential than his selfish genes or his later proselytizing against religiosity. "Memes propagate themselves in the meme pool by leaping from brain to brain via a process which, in the broad sense, can be called imitation," he wrote. They compete with one another for limited resources: brain time or bandwidth. They compete most of all for attention. For example:

Ideas. Whether an idea arises uniquely or reappears many times, it may thrive in the meme pool or it may dwindle and vanish. The belief in God is an example Dawkins offers—an ancient idea, replicating itself not just in words but in music and art. The belief that Earth orbits the Sun is no less a meme, competing with others for survival. (Truth may be a helpful quality for a meme, but it is only one among many.)

Tunes. This tune has spread for centuries across several continents.

Catchphrases. One text snippet, "What hath God wrought?" appeared early and spread rapidly in more than one medium. Another, "Read my lips," charted a peculiar path through late 20th-century America. "Survival of the fittest" is a meme that, like other memes, mutates wildly ("survival of the fattest"; "survival of the sickest"; "survival of the fakest"; "survival of the twittest").

Images. In Isaac Newton's lifetime, no more than a few thousand people had any idea what he looked like, even though he was one of England's most famous men. Yet now millions of people have quite a clear idea—based on replicas of copies of rather poorly painted portraits. Even more pervasive and indelible are the smile of Mona Lisa, The Scream of Edvard Munch and the silhouettes of various fictional extraterrestrials. These are memes, living a life of their own, independent of any physical reality. "This may not be what George Washington looked like then," a tour guide was overheard saying of the Gilbert Stuart portrait at the Metropolitan Museum of Art, "but this is what he looks like now." Exactly.

Memes emerge in brains and travel outward, establishing beachheads on paper and celluloid and silicon and anywhere else information can go. They are not to be thought of as elementary particles but as organisms. The number three is not a meme; nor is the color blue, nor any simple thought, any more than a single nucleotide can be a gene. Memes are complex units, distinct and memorable—units with staying power.

Also, an object is not a meme. The hula hoop is not a meme; it is made of plastic, not of bits. When this species of toy spread worldwide in a mad epidemic in 1958, it was the product, the physical manifestation, of a meme, or memes: the craving for hula hoops; the swaying, swinging, twirling skill set of hula-hooping. The hula hoop itself is a meme vehicle. So, for that matter, is each human hula hooper—a strikingly effective meme vehicle, in the sense neatly explained by the philosopher Daniel Dennett: "A wagon with spoked wheels carries not only grain or freight from place to place; it carries the brilliant idea of a wagon with spoked wheels from mind to mind." Hula hoopers did that for the hula hoop's memes—and in 1958 they found a new transmission vector, broadcast television, sending its messages immeasurably faster and farther than any wagon. The moving image of the hula hooper seduced new minds by hundreds, and then by thousands, and then by millions. The meme is not the dancer but the dance.

For most of our biological history memes existed fleetingly; their main mode of transmission was the one called "word of mouth." Lately, however, they have managed to adhere in solid substance: clay tablets, cave walls, paper sheets. They achieve longevity through our pens and printing presses, magnetic tapes and optical disks. They spread via broadcast towers and digital networks. Memes may be stories, recipes, skills, legends or fashions. We copy them, one person at a time. Alternatively, in Dawkins' meme-centered perspective, they copy themselves.

"I believe that, given the right conditions, replicators automatically band together to create systems, or machines, that carry them around and work to favor their continued replication," he wrote. This was not to suggest that memes are conscious actors; only that they are entities with interests that can be furthered by natural selection. Their interests are not our interests. "A meme," Dennett says, "is an information-packet with attitude." When we speak of fighting for a principle or dying for an idea, we may be more literal than we know.

Tinker, tailor, soldier, sailor....Rhyme and rhythm help people remember bits of text. Or: rhyme and rhythm help bits of text get remembered. Rhyme and rhythm are qualities that aid a meme's survival, just as strength and speed aid an animal's. Patterned language has an evolutionary advantage. Rhyme, rhythm and reason—for reason, too, is a form of pattern. I was promised on a time to have reason for my rhyme; from that time unto this season, I received nor rhyme nor reason.

Like genes, memes have effects on the wide world beyond themselves. In some cases (the meme for making fire; for wearing clothes; for the resurrection of Jesus) the effects can be powerful indeed. As they broadcast their influence on the world, memes thus influence the conditions affecting their own chances of survival. The meme or memes comprising Morse code had strong positive feedback effects. Some memes have evident benefits for their human hosts ("Look before you leap," knowledge of CPR, belief in hand washing before cooking), but memetic success and genetic success are not the same. Memes can replicate with impressive virulence while leaving swaths of collateral damage—patent medicines and psychic surgery, astrology and satanism, racist myths, superstitions and (a special case) computer viruses. In a way, these are the most interesting—the memes that thrive to their hosts' detriment, such as the idea that suicide bombers will find their reward in heaven.

Memes could travel wordlessly even before language was born. Plain mimicry is enough to replicate knowledge—how to chip an arrowhead or start a fire. Among animals, chimpanzees and gorillas are known to acquire behaviors by imitation. Some species of songbirds learn their songs, or at least song variants, after hearing them from neighboring birds (or, more recently, from ornithologists with audio players). Birds develop song repertoires and song dialects—in short, they exhibit a birdsong culture that predates human culture by eons. These special cases notwithstanding, for most of human history memes and language have gone hand in glove. (Clichés are memes.) Language serves as culture's first catalyst. It supersedes mere imitation, spreading knowledge by abstraction and encoding.

Perhaps the analogy with disease was inevitable. Before anyone understood anything of epidemiology, its language was applied to species of information. An emotion can be infectious, a tune catchy, a habit contagious. "From look to look, contagious through the crowd / The panic runs," wrote the poet James Thomson in 1730. Lust, likewise, according to Milton: "Eve, whose eye darted contagious fire." But only in the new millennium, in the time of global electronic transmission, has the identification become second nature. Ours is the age of virality: viral education, viral marketing, viral e-mail and video and networking. Researchers studying the Internet itself as a medium—crowdsourcing, collective attention, social networking and resource allocation—employ not only the language but also the mathematical principles of epidemiology.

One of the first to use the terms "viral text" and "viral sentences" seems to have been a reader of Dawkins named Stephen Walton of New York City, corresponding in 1981 with the cognitive scientist Douglas Hofstadter. Thinking logically—perhaps in the mode of a computer—Walton proposed simple self-replicating sentences along the lines of "Say me!" "Copy me!" and "If you copy me, I'll grant you three wishes!" Hofstadter, then a columnist for Scientific American, found the term "viral text" itself to be even catchier.

Well, now, Walton's own viral text, as you can see here before your eyes, has managed to commandeer the facilities of a very powerful host—an entire magazine and printing press and distribution service. It has leapt aboard and is now—even as you read this viral sentence—propagating itself madly throughout the ideosphere!

Hofstadter gaily declared himself infected by the meme meme.

One source of resistance—or at least unease—was the shoving of us humans toward the wings. It was bad enough to say that a person is merely a gene's way of making more genes. Now humans are to be considered as vehicles for the propagation of memes, too. No one likes to be called a puppet. Dennett summed up the problem this way: "I don't know about you, but I am not initially attracted by the idea of my brain as a sort of dung heap in which the larvae of other people's ideas renew themselves, before sending out copies of themselves in an informational diaspora.... Who's in charge, according to this vision—we or our memes?"

He answered his own question by reminding us that, like it or not, we are seldom "in charge" of our own minds. He might have quoted Freud; instead he quoted Mozart (or so he thought): "In the night when I cannot sleep, thoughts crowd into my mind.... Whence and how do they come? I do not know and I have nothing to do with it."

Later Dennett was informed that this well-known quotation was not Mozart's after all. It had taken on a life of its own; it was a fairly successful meme.

For anyone taken with the idea of memes, the landscape was changing faster than Dawkins had imagined possible in 1976, when he wrote, "The computers in which memes live are human brains." By 1989, the time of the second edition of The Selfish Gene, having become an adept programmer himself, he had to amend that: "It was obviously predictable that manufactured electronic computers, too, would eventually play host to self-replicating patterns of information." Information was passing from one computer to another "when their owners pass floppy discs around," and he could see another phenomenon on the near horizon: computers connected in networks. "Many of them," he wrote, "are literally wired up together in electronic mail exchange.... It is a perfect milieu for self-replicating programs to flourish." Indeed, the Internet was in its birth throes. Not only did it provide memes with a nutrient-rich culture medium, it also gave wings to the idea of memes. Meme itself quickly became an Internet buzzword. Awareness of memes fostered their spread.

A notorious example of a meme that could not have emerged in pre-Internet culture was the phrase "jumped the shark." Loopy self-reference characterized every phase of its existence. To jump the shark means to pass a peak of quality or popularity and begin an irreversible decline. The phrase was thought to have been used first in 1985 by a college student named Sean J. Connolly, in reference to an episode of the television series "Happy Days" in which the character Fonzie (Henry Winkler), on water skies, jumps over a shark. The origin of the phrase requires a certain amount of explanation without which it could not have been initially understood. Perhaps for that reason, there is no recorded usage until 1997, when Connolly's roommate, Jon Hein, registered the domain name jumptheshark.com and created a web site devoted to its promotion. The web site soon featured a list of frequently asked questions:

Q. Did "jump the shark" originate from this web site, or did you create the site to capitalize on the phrase?

A. This site went up December 24, 1997, and gave birth to the phrase "jump the shark." As the site continues to grow in popularity, the term has become more commonplace. The site is the chicken, the egg and now a Catch-22.

It spread to more traditional media in the next year; Maureen Dowd devoted a column to explaining it in the New York Times in 2001; in 2002 the same newspaper's "On Language" columnist, William Safire, called it "the popular culture's phrase of the year"; soon after that, people were using the phrase in speech and in print without self-consciousness—no quotation marks or explanation—and eventually, inevitably, various cultural observers asked, "Has 'jump the shark' jumped the shark?" Like any good meme, it spawned mutations. The "jumping the shark" entry in Wikipedia advised in 2009, "See also: jumping the couch; nuking the fridge."

Is this science? In his 1983 column, Hofstadter proposed the obvious memetic label for such a discipline: memetics. The study of memes has attracted researchers from fields as far apart as computer science and microbiology. In bioinformatics, chain letters are an object of study. They are memes; they have evolutionary histories. The very purpose of a chain letter is replication; whatever else a chain letter may say, it embodies one message: Copy me. One student of chain-letter evolution, Daniel W. VanArsdale, listed many variants, in chain letters and even earlier texts: "Make seven copies of it exactly as it is written" (1902); "Copy this in full and send to nine friends" (1923); "And if any man shall take away from the words of the book of this prophecy, God shall take away his part out of the book of life" (Revelation 22:19). Chain letters flourished with the help of a new 19th-century technology: "carbonic paper," sandwiched between sheets of writing paper in stacks. Then carbon paper made a symbiotic partnership with another technology, the typewriter. Viral outbreaks of chain letters occurred all through the early 20th century. Two subsequent technologies, when their use became widespread, provided orders-of-magnitude boosts in chain-letter fecundity: photocopying (c. 1950) and e-mail (c. 1995).

Inspired by a chance conversation on a hike in the Hong Kong mountains, information scientists Charles H. Bennett from IBM in New York and Ming Li and Bin Ma from Ontario, Canada, began an analysis of a set of chain letters collected during the photocopier era. They had 33, all variants of a single letter, with mutations in the form of misspellings, omissions and transposed words and phrases. "These letters have passed from host to host, mutating and evolving," they reported in 2003.

Like a gene, their average length is about 2,000 characters. Like a potent virus, the letter threatens to kill you and induces you to pass it on to your "friends and associates"—some variation of this letter has probably reached millions of people. Like an inheritable trait, it promises benefits for you and the people you pass it on to. Like genomes, chain letters undergo natural selection and sometimes parts even get transferred between coexisting "species."

Reaching beyond these appealing metaphors, the three researchers set out to use the letters as a "test bed" for algorithms used in evolutionary biology. The algorithms were designed to take the genomes of various modern creatures and work backward, by inference and deduction, to reconstruct their phylogeny—their evolutionary trees. If these mathematical methods worked with genes, the scientists suggested, they should work with chain letters, too. In both cases the researchers were able to verify mutation rates and relatedness measures.

Still, most of the elements of culture change and blur too easily to qualify as stable replicators. They are rarely as neatly fixed as a sequence of DNA. Dawkins himself emphasized that he had never imagined founding anything like a new science of memetics. A peer-reviewed Journal of Memetics came to life in 1997—published online, naturally—and then faded away after eight years partly spent in self-conscious debate over status, mission and terminology. Even compared with genes, memes are hard to mathematize or even to define rigorously. So the gene-meme analogy causes uneasiness and the genetics-memetics analogy even more.

Genes at least have a grounding in physical substance. Memes are abstract, intangible and unmeasurable. Genes replicate with near-perfect fidelity, and evolution depends on that: some variation is essential, but mutations need to be rare. Memes are seldom copied exactly; their boundaries are always fuzzy, and they mutate with a wild flexibility that would be fatal in biology. The term "meme" could be applied to a suspicious cornucopia of entities, from small to large. For Dennett, the first four notes of Beethoven's Fifth Symphony (quoted above) were "clearly" a meme, along with Homer's Odyssey (or at least the idea of the Odyssey), the wheel, anti-Semitism and writing. "Memes have not yet found their Watson and Crick," said Dawkins; "they even lack their Mendel."

Yet here they are. As the arc of information flow bends toward ever greater connectivity, memes evolve faster and spread farther. Their presence is felt if not seen in herd behavior, bank runs, informational cascades and financial bubbles. Diets rise and fall in popularity, their very names becoming catchphrases—the South Beach Diet and the Atkins Diet, the Scarsdale Diet, the Cookie Diet and the Drinking Man's Diet all replicating according to a dynamic about which the science of nutrition has nothing to say. Medical practice, too, experiences "surgical fads" and "iatro-epidemics"—epidemics caused by fashions in treatment—like the iatro-epidemic of children's tonsillectomies that swept the United States and parts of Europe in the mid-20th century. Some false memes spread with disingenuous assistance, like the apparently unkillable notion that Barack Obama was not born in Hawaii. And in cyberspace every new social network becomes a new incubator of memes. Making the rounds of Facebook in the summer and fall of 2010 was a classic in new garb:

Sometimes I Just Want to Copy Someone Else's Status, Word for Word, and See If They Notice.

Then it mutated again, and in January 2011 Twitter saw an outbreak of:

One day I want to copy someone's Tweet word for word and see if they notice.

By then one of the most popular of all Twitter hashtags (the "hashtag" being a genetic—or, rather, memetic—marker) was simply the word "#Viral."

In the competition for space in our brains and in the culture, the effective combatants are the messages. The new, oblique, looping views of genes and memes have enriched us. They give us paradoxes to write on Möbius strips. "The human world is made of stories, not people," writes the novelist David Mitchell. "The people the stories use to tell themselves are not to be blamed." Margaret Atwood writes: "As with all knowledge, once you knew it, you couldn't imagine how it was that you hadn't known it before. Like stage magic, knowledge before you knew it took place before your very eyes, but you were looking elsewhere." Nearing death, John Updike reflected on

A life poured into words—apparent waste intended to preserve the thing consumed.

Fred Dretske, a philosopher of mind and knowledge, wrote in 1981: "In the beginning there was information. The word came later." He added this explanation: "The transition was achieved by the development of organisms with the capacity for selectively exploiting this information in order to survive and perpetuate their kind." Now we might add, thanks to Dawkins, that the transition was achieved by the information itself, surviving and perpetuating its kind and selectively exploiting organisms.

Most of the biosphere cannot see the infosphere; it is invisible, a parallel universe humming with ghostly inhabitants. But they are not ghosts to us—not anymore. We humans, alone among the earth's organic creatures, live in both worlds at once. It is as though, having long coexisted with the unseen, we have begun to develop the needed extrasensory perception. We are aware of the many species of information. We name their types sardonically, as though to reassure ourselves that we understand: urban myths and zombie lies. We keep them alive in air-conditioned server farms. But we cannot own them. When a jingle lingers in our ears, or a fad turns fashion upside down, or a hoax dominates the global chatter for months and vanishes as swiftly as it came, who is master and who is slave?

Streaming DreamsYouTube turns pro.by John Seabrook
January 16, 2012 On TV, airtime is a scarce resource; on YouTube, it's infinite.
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YouTube; Television; Internet; Google; Robert Kyncl; Salar Kamangar; Netflix On a rainy night in late November, Robert Kyncl was in Google's New York City offices, on Ninth Avenue, whiteboarding the future of TV. Kyncl holds a senior position at YouTube, which Google owns. He is the architect of the single largest cultural transformation in YouTube's seven-year history. Wielding a black Magic Marker, he charted the big bang of channel expansion and audience fragmentation that has propelled television history so far, from the age of the three networks, each with a mass audience, to the hundreds of cable channels, each serving a niche audience—twenty-four-hour news, food, sports, weather, music—and on to the dawning age of Internet video, bringing channels by the tens of thousands. "People went from broad to narrow," he said, "and we think they will continue to go that way—spend more and more time in the niches—because now the distribution landscape allows for more narrowness."

Kyncl puts his whole body into his whiteboard performances, and you can almost see the champion skier he used to be. As a teen-ager in Czechoslovakia, he was sent to a state-run boarding school where talented young skiers trained for the Olympics. At eighteen, "I realized then that all I knew was skiing," he told me. After the Velvet Revolution of 1989, he applied to a program that placed Eastern Europeans in American summer camps as counsellors, and spent the summer in Charlottesville, Virginia. The following year, Kyncl went to SUNY, in New Paltz, where he majored in international relations.

People prefer niches because "the experience is more immersive," Kyncl went on. "For example, there's no horseback-riding channel on cable. Plenty of people love horseback riding, and there's plenty of advertisers who would like to market to them, but there's no channel for it, because of the costs. You have to program a 24/7 loop, and you need a transponder to get your signal up on the satellite. With the Internet, everything is on demand, so you don't have to program 24/7—a few hours is all you need."

For the past sixty years, TV executives have been making the decisions about what we watch in our living rooms. Kyncl would like to change that. Therefore YouTube, the home of grainy cell-phone videos and skateboarding dogs, is going pro. Kyncl has recruited producers, publishers, programmers, and performers from traditional media to create more than a hundred channels, most of which will début in the next six months—a sort of YouTV. Streaming video, delivered over the Internet, is about to engage traditional TV in a skirmish in the looming war for screen time.

Kyncl attacked the two-dimensional plane with his marker, schussing the media moguls, racing over and around them to the future. He drew a vertiginously plunging double-diamond run representing the dissolution of mass TV audiences as cable channels began to proliferate. Then he drew the bunny slope of Web-based channels that will further fragment audiences. According to Forrester Research, by 2016 half of all households will have Wi-Fi-enabled devices on their televisions, which will bring all those new channels into the living room, tempting people to cancel their pricey cable subscriptions. The only way for the networks and the cable companies to grow will be to buy Web-based channels.

from the issuecartoon banke-mail thisIsn't that more or less what happened thirty years ago? I asked. The networks, which had originally disparaged the new cable channels as cheap-looking and too narrowly focussed, ended up buying them when cable took off.

"Absolutely that's what happened," Kyncl said, with a slight Czech accent. "And it will happen again."

He set the marker down on the conference-room table, and smiled. YouTube had won the gold.

YouTube was created by three former employees of PayPal, in a Silicon Valley garage, in early 2005. According to two of the founders, Chad Hurley and Steven Chen, a graphic designer and a software engineer, respectively, the idea grew out of a dinner party at Chen's home in San Francisco, in the winter of 2004-05. Guests had made videos of one another, but they couldn't share them easily. The founders envisioned a video version of Flickr, a popular photo-sharing site. All the content on the site would be user-generated: "Real personal clips that are taken by everyday people," as Hurley described his vision.

The third founder, Jawed Karim, also a software engineer, had an additional source of inspiration: Janet Jackson's "wardrobe malfunction" on CBS's broadcast of the 2004 Super Bowl halftime show. The incident spawned an enormous amount of commentary, an F.C.C. fine, and a lawsuit that went all the way to the Supreme Court, but if you missed the live broadcast you were out of luck.

On the evening of April 23, 2005, Karim uploaded the first video to YouTube—an eighteen-second clip of him, standing in front of the elephant enclosure at the San Diego Zoo, wearing an ill-fitting hiking jacket. He says, "The cool thing about these guys is that they have really, really, really long trunks, and that's cool," smirks a little, and ends with "And that's pretty much all there is to say." Civilization would never be the same.

By the time a beta version of YouTube went live, in May, 2005, its archive held several dozen videos, supplied mostly by the founders and their friends; Chen contributed a couple of his cat, Stinky. Not surprisingly, traffic was light. YouTube was like "America's Funniest Home Videos," without the fun. The founders had no outside financing at the time, and they were paying for equipment and bandwidth with the payouts they had earned from PayPal when eBay bought the company, in 2002; some of the costs went on Chen's credit card. The situation looked bleak. In a video shot that month in a garage, the founders discuss their predicament. Chen says, "I was getting pretty depressed toward the end of last week." Someone says, "This is lame." The founders decided that videos of good-looking babes might help, and they placed ads on Craigslist, offering attractive women a hundred dollars for ten videos. No one responded.

On June 20th, Karim wrote in an e-mail to Chen and Hurley, "If we want to sign up lots of users who keep coming back, we have to target the people who will never upload a video in their life. And those are really valuable because they spend time watching." What the watchers wanted was music videos, skits from "Saturday Night Live," and episodes of "South Park"—professional content. "And if they watch, then it's just like TV, which means lots of value," Karim added.

In e-mails that later became the centerpiece of a billion-dollar copyright-infringement suit brought by Viacom against YouTube, in 2007, both Karim and Chen advocated a laissez-faire response toward copyrighted content. If the content owners asked YouTube to take a video down, the site would comply; otherwise, the founders would leave it. Hurley presciently wrote, "OK man, save your meal money for some lawsuits." But he, too, went along with the relaxed approach.

In June, the site incorporated a number of new features, including the ability to embed YouTube videos in other sites and links between videos, and traffic began to pick up. By December, YouTube had several million views a day. That month, "Lazy Sunday," a skit from "Saturday Night Live," in which Andy Samberg and Chris Parnell rap about eating cupcakes from Magnolia Bakery and going to a Sunday matinée of "The Chronicles of Narnia," was posted on YouTube, and viewed more than five million times before it was removed at NBCUniversal's request.

I discovered the pleasures of YouTube around this time. Someone sent me a link to a music video, and I followed it to the site. The whimsical D.I.Y.-ness of the home page, with its clutter of clickable offerings, many sophomoric in nature, made the place feel like a college dorm. Adorable babies, angry cats, embarrassing falls, and child prodigies mingled with the music videos and great concert footage of bands I loved performing at their peak. I e-mailed links to my friends. One of them wrote back, "This is like public television was supposed to be!"

At the beginning, I used YouTube more as a radio. Almost every song I wanted to hear, from any era, was on it. (It never occurred to me that someone may have violated the owners' copyright by uploading those videos; streaming seemed more like borrowing than stealing.) Before long, I was taking online Delta-blues guitar lessons from a guy who called himself BlindBoy, and whose face never appeared onscreen—it was just the guitar, his hands, and his Lennon-like Liverpudlian accent. BlindBoy was a talented teacher and a prolific poster, and soon I was spending more time watching this headless Englishman than, say, the "The Daily Show." I was definitely one of the watchers: I would never have thought of uploading a video myself. But watching YouTube was nothing like watching TV. It was user-generated anarchy.

In October, 2006, Google bought YouTube, for $1.65 billion. (Hurley and Chen made the announcement in a YouTube video entitled "A Message from Chad and Steve"; Karim, who had left the company by that point, was nowhere to be seen, and henceforth all but disappears from official company history.) Within a year, Google had tamed the Wild West of copyright infringement that characterized YouTube's pioneer days, both through licensing deals with major content providers and through a content-management program, called Content ID, that alerted copyright holders automatically whenever any part of their content went up on YouTube. Owners can choose to remove the content, sell ads against it and share the money with YouTube, or use it as a promotional tool. Content ID generates a third of YouTube's revenue. (In June, 2010, Louis Stanton, the judge in the long-running Viacom v. YouTube case, granted summary judgment to YouTube. Viacom is appealing that ruling, and a decision is expected soon.)

Having dealt with YouTube's copyright problems, Google's C.E.O., Eric Schmidt, turned to the issue of monetization. YouTube's expenses—mainly the bandwidth costs of streaming all those videos—exceeded its revenues, which, like Google's, came from ad sales. The general impression among advertisers at the time was that YouTube was not "brand safe," because its streets "were not clean and well lit," as David Cohen, an executive vice-president at the ad agency Universal McCann, put it to me. YouTube needed to devise a strategy similar to Google's paid search. But although YouTube is the second most popular search engine in the world, many people are searching for entertainment, which is different from searching for information and harder to match ads with; "lol" is one of the most popular search terms on the site. Keyword searches are confined to the "metadata"—the labels and titles of the videos; search can't go inside the videos themselves. Often, videos are poorly labelled, and, if they come straight from cell phones, as many do, they may not be labelled at all.

If anyone at Google could solve the monetization problem, it was Salar Kamangar. Born in Iran in 1976, Kamangar came to the United States with his parents shortly before the Iranian Revolution. He got a degree in biology from Stanford, and stayed in Palo Alto to work on a degree in economics. In 1999, he attended a job fair on campus, where he met Sergey Brin, who was manning the booth for Google, a start-up that he and Larry Page had founded a year earlier. Kamangar became Google employee No. 9. Steven Levy, in his recent book about Google, "In the Plex," describes Kamangar as having "a glow of success around him . . . as a result of his work in developing Google's ad system." That glow, however, does not translate into physical presence. Kamangar is slight of build, soft-spoken, and shy, especially around reporters. He brought his laptop to our meeting, and looked at it from time to time while we talked. His eyes relaxed whenever they hit the screen.

In the fall of 2008, at Schmidt and Hurley's request, Kamangar began working at YouTube headquarters, in San Bruno, California. (Hurley remained at YouTube, but he ceded day-to-day management to Kamangar, and left altogether in October, 2010.) The airy, light-filled offices were originally designed for the Gap. There is a putting green in the atrium, with garden gnomes placed around it; red helium balloons float above the desks of new employees; the downstairs conference rooms are named for well-known video games; and a very large, triple-chute slide, also in YouTube red, is installed in the two-story central workspace. Underlying these whimsical touches is a seriousness of purpose that one encounters in small start-ups but only rarely in companies the size of YouTube (more than seven hundred employees and growing fast, to judge by all the red balloons).

Under Kamangar's leadership, YouTube has continued to grow. Today, it has eight hundred million unique users a month, and generates more than three billion views a day. Forty-eight hours of new video are uploaded to the site every minute. According to Nielsen, it drew eight times more video viewers last year than Hulu, which is jointly owned by NBCUniversal, News Corporation, and the Walt Disney Company, among others. It is the first truly global media platform on earth.

YouTube's Partner Program, begun in 2007, has also flourished. YouTube sells advertising against popular channels created by homegrown YouTube stars—vloggers, sit-down comedians (a form of comedy unique to YouTube), mashup artists, bedroom auteurs, Mr. Fix-Its—and shares the revenues with the channels' creators. For most of YouTube's thirty thousand partners, this means a few hundred dollars a month, but the top five hundred partners earn more than a hundred thousand a year, and in some cases—Real Annoying Orange, a socially inept talking citrus who converses with other pieces of fruit; Shane Dawson, a madcap twenty-three-year-old sketch comedian; and Michelle Phan, a Vietnamese-American beauty guru, among them—they earn much more. Tweens are more familiar with these "welebrities" than they are with the stars on TV, a grim augury for the future of traditional television.

As YouTube has grown, Kamangar and his team have struggled to keep its algorithm up to speed. The algorithm is that secret software machine that determines which videos the home page suggests for you, based on your watch history, trending videos, and the most popular videos on the site. Weighting each of those factors properly, while maintaining a sense of serendipity—those stumble-upon videos that are one of the delights of YouTube—has been a challenge. When the top hits become overly dominant, the algorithm is tweaked to encourage greater diversity. Too much diversity, however, and you get seemingly random suggestions on the home page, and you stop watching.

But there is one category in which YouTube has made little progress. The average 'Tuber spends only fifteen minutes a day on the site—a paltry showing when compared with the four or five hours the average American spends in front of the TV each day. The standard block of programming on TV lasts twenty-two minutes; on YouTube, it's three minutes. As Rick Klau, a former YouTube product manager who is now a partner at Google Ventures, said, "We give people seven or eight opportunities in the course of a half hour to opt out." People tend to watch YouTube on their computers at work. A three-minute break every couple of hours isn't really goofing off; it's more like a trip to the virtual water cooler. On TV, programmers bracket certain shows together in the hope that you won't change the channel, and channels promote upcoming shows during commercial breaks. But on YouTube you're the programmer, and every time a video ends you have to make a programming decision: what should you watch next? All too often, the algorithm isn't much help.

If YouTube could get people to stay on the site longer, it could sell more advertising, and raise the rates it charges advertisers for each thousand views, which are known in the industry as C.P.M.s. (In spite of the fact that YouTube has a much larger number of users, it lags behind Hulu in C.P.M. rates, possibly because Hulu's longer-format programming keeps viewers from leaving the site as quickly, and because advertisers prefer to be associated with the made-for-broadcast content that Hulu offers.) Advertisers spend some sixty billion dollars a year on television; they spend only about three billion on online video.

Clearly, YouTube would benefit from premium content, the kind of stuff you could watch on Netflix and Hulu. But the owners of that content were reluctant to license it to YouTube, either because they could make more money selling it elsewhere or because they didn't trust YouTube/Google. Kamangar needed someone who would make content owners realize how valuable YouTube's audience could be to them.

Robert Kyncl started his career in entertainment in the mailroom of a talent agency, J. Michael Bloom, in Los Angeles, and later worked for HBO in New York before returning to the West Coast to join a dot-com start-up called ALFY, a Web site for kids. In 2003, Netflix recruited Kyncl to help secure movies for its thriving DVD-by-mail business.

In 2005, Kyncl volunteered to look into the business of streaming video. At that time, the usual method of obtaining music as well as video over the Internet was to download the file. Apple's iTunes store, which launched in 2003, sold downloads. Streaming video, which enables the viewer to play a file that resides on a remote server, was believed to be a less desirable method of delivery, because the picture quality was often inferior. "Every single company was focussed on downloading at that time," Kyncl told me. "And then one day I saw this thing called YouTube, and I thought, Wow, a lot of people are watching grainy videos on this; obviously they're willing to trade fidelity for utility. That was a revelation."

The streaming service débuted on Netflix in 2007, offering movies and television programs, and it quickly caught on with subscribers. For the price of a subscription to Netflix, which was about ten dollars a month, you could watch as many movies as you wanted; if you didn't like one, you could start another. "It brought channel-surfing to movies," Kyncl says. For many people, Netflix was the first glimpse of a kind of content holy grail: limitless choice, all on demand, and available on any Internet-connected device. By 2010, streaming had become a major part of Netflix's business. Its stock price soared.

But, big as the streaming-video business became for Netflix, its potential was even greater. Computers were already beginning to change the experience of watching TV, by allowing viewers to access programs and movies on laptops, phones, and gaming devices. The next phase would be televisions that connected to the Internet through Wi-Fi, which would allow users to stream Web-original content on the TV. Netflix, with one foot in the old world of DVD delivery—the world of atoms, not bits—might not fully realize the new medium's potential. (Indeed, in September, 2011, when Reed Hastings, the co-founder and C.E.O. of Netflix, tried to separate the DVD-by-mail side of the company from the streaming side, and to charge customers more if they wanted both services, subscribers were outraged.) But someone was going to figure it out.

In the spring of 2010, a recruiter called Kyncl at Netflix and asked him if he would be interested in meeting Kamangar. Although the two men seem miles apart in temperament—Kyncl is outgoing and personable; Kamangar is introverted and intense—they hit it off.

The senior vice-president of YouTube wanted Kyncl to help chart YouTube's future. "Because YouTube is focussed on a lot of different types of content at the same time," Kyncl told me, "it has many opportunities, and the hardest thing is to figure out which ones you shouldn't do, and focus on the ones you should."

Kyncl's relationships in Hollywood would help in securing premium content; and, more important, he understood entertainment culture. He brought "the skill set of being able to bridge Silicon Valley and Hollywood—an information culture and an entertainment culture," he told me. The crucial difference is that one culture is founded on abundance and the other on scarcity. He added, "Silicon Valley builds its bridges on abundance. Abundant bits of information floating out there, writing great programs to process it, then giving people a lot of useful tools to use it. Entertainment works by withholding content with the purpose of increasing its value. And, when you think about it, those two are just vastly different approaches, but they can be bridged."

In TV, airtime is a scarce resource, and quality programming is scarcer still, and expensive to create. Writers spend months or years developing an idea, which they then pitch to network and cable executives, who make decisions based, at least in part, on their "gut." The majority of the ideas never get produced. If a project is green-lighted, the networks or cable channels buy it and fund its production, and the creators have to give up some or all of their control over the material.

But on YouTube "airtime" is infinite, content costs almost nothing for YouTube to produce, and quantity, not quality, is the bottom line. "YouTube green-lights everything," as Tim Shey, the director of the site's division for coaching content creators, YouTube Next Lab, told me. It's up to the audience, not the executive gut, to decide what's worth watching. "I've worked in TV, and I've been the one green-lighting projects," Shey went on. "Believe me, the YouTube way works much better." Kyncl told me that at Google it makes no sense to bring "a gut-based decision-making process to a culture that is based on numerically quantifying everything. Ultimately, that kind of decision-making gets rejected, as if it were a foreign body."

When I met Kamangar, in California, he told me he thought that screen time in general was going to expand, so the battle for eyeballs wasn't a zero-sum game. "Our data suggests TV watching is on the rise," he said. "It seems to have increased from four to five hours in recent years, and we think it will keep increasing. Screen time in general will increase. I wake up with a Droid next to my bed, and I immediately look into the screen for my instructions." At the mention of a screen, his eyes stole a longing glance back toward his laptop. "That's the trend—more screen time—and we think that will benefit YouTube."

Kyncl sees the situation in more absolute terms. He showed me a bar graph depicting the enormous advantage that TV has over YouTube in screen time. "We're absolutely nothing compared to TV," he said. "And this is why I came to YouTube. I want to take this"—he pointed to YouTube's screen time—"up, and in a big way, because I think we can. And, if we do, this industry"—TV—"is worth three hundred billion dollars, worldwide, and we hope to see value shifting hands."

In his first months on the job, Kyncl concentrated on beefing up YouTube's streaming-movie-rental business—the company's first foray into paid content—which, at that point, had mostly indie titles. He helped negotiate deals with Warner Bros., Sony, and NBCUniversal, among others. In May, 2011, the new service went live, heralded by a rare posting on the YouTube blog from Kamangar himself, entitled "Welcome to the future of video. Please stay a while." More than three thousand titles were available for rent, at prices comparable to iTunes movie rentals. But, since most of the same films were already available for instant streaming on Netflix, for a flat monthly fee, the new service was something of a non-starter.

And popular TV shows like "Mad Men," which Netflix also offered, were notably lacking on YouTube. When I spoke to Kamangar about this during my visit to company headquarters in July, he said that the deals were taking longer than expected to work out because so many shows were tied up in syndication and ancillary-rights deals that had been negotiated back when "no one thought that content would be watched on the Internet at this volume." He added that making broadcast-content owners comfortable putting their stuff on YouTube "would require an attitudinal shift," from scarcity thinking to abundance thinking, but that "there are signs this is happening."

While Kamangar and Kyncl were expanding YouTube's movie titles, they were also exploring a more radical idea. What if YouTube could get professional writers, directors, and producers to create original content for the site? As Kyncl put it, "YouTube already had many channels, but they were used more as a way for content creators to set up their relationship with YouTube and upload videos, rather than as a discovery mechanism for the viewer." YouTube would not want to own or develop the content. "We're a technology company, and that's not in our DNA," Kyncl said. "The focus would be on developing channels, and brands, rather than individual shows." He added, "There is a fundamental difference between the way AOL and Yahoo behave and the way we behave. They commission individual pieces of content. What we do is commission channels. We don't tell people how to program the channels. We have certain volume requirements"—for instance, channels would be required to supply a minimum number of hours of programming each week—"but we are not making show-by-show decisions."

Early in 2011, Kyncl began meeting content creators in a variety of media—film, TV, music, print—whiteboarding the future of television, and inviting them to participate in it by creating new YouTube channels. He offered several million dollars in funding, in the form of advances against future ad revenues, to be used as development money. Once the advances are earned back, YouTube will share ad revenues with the creators. YouTube will have an exclusive right to the content for a year, but the creators will retain ownership. YouTube will be responsible for selling ads but will not invest in promoting or marketing the channels in the way that traditional television channels do. (There will be no lavish premiere parties, and no billboards in Times Square.)

Michael Hirschorn was among the people who heard Kyncl's presentation. Hirschorn began his career in print but made his name in television, at VH1, where, as the head of programming, he oversaw hits like "Flavor of Love" and "Celebrity Rehab." He now runs an independent production company called Ish Entertainment. Larry Aidem, the former president of the Sundance Channel, knew Robert Kyncl, Hirschorn told me, and he said he thought they should meet. "None of the stuff Robert described was happening yet, of course, but I felt, having been late to several revolutions previously, that we needed to go all out for this," Hirschorn said. "I called Larry and said, 'We need to start a company now.' "

In all, Kyncl received more than a thousand proposals for new YouTube channels. He and his staff heard more than five hundred pitches, and winnowed them down to just over a hundred channels that would be awarded advances. Hirschorn attended more than twenty meetings. The winning proposals—branded "YouTube Original Channels"—were announced late on the Friday evening just before Halloween, at a time usually reserved for scandals and resignations, signalling that the third age of television, whatever it might be, would not be show business as usual.

Hirschorn and Aidem's company, IconicTV, has been given advances for three channels: Life and Times, which will focus on Jay-Z's cultural and artistic interests; 123UnoDosTres, an urban channel for Latin American young adults; and myISH, a channel for scouting musical talent. Madonna and her longtime manager, Guy Oseary, are developing a dance channel called Dance On. Amy Poehler is creating a channel called Smart Girls at the Party. Shaquille O'Neal is behind the Comedy Shaq Network, and there is a skateboard channel, RIDE, from Tony Hawk. Brian Bedol, who started the Classic Sports Network in the nineteen-nineties, and his partner Ken Lerer, the co-founder of the Huffington Post, got funds for four channels: Network A, an action-sports channel; KickTV, featuring soccer; Official Comedy, a standup-comedy showcase; and Look TV, a fashion-and-beauty channel. The Onion, Slate, and the Wall Street Journal are also creating channels, as are Hearst and Meredith. Even Disney, which had not made its films available to YouTube until November, agreed to partner with the company.

Although most of the entertainment channels fall into the variety-show format (a staple of the early years of television), some creators are attempting long-form dramas. Anthony Zuiker, who created the crime show "C.S.I." for CBS, got a deal, along with his colleagues, to develop a channel called BlackBoxTV, a "Night Gallery"-like chiller theatre. When I asked him what attracted him to the opportunity, he said, "This world of online video is the future, and for an artist you want to be first in, to be a pioneer. And that time is now. We've had amateur content on the Web, and we've had network shows rebroadcast on the Web, but now we are combining those two into a bigger game." He added, "You know, even with a hit show like 'C.S.I.' there's a lot of cooks in the kitchen. There is a lot of interference and a lot of rules. With YouTube I will have a very small crew, and we are trying to keep focussed on a single voice. There aren't any rules. There's just the artist, the content, and the audience."

And the advertisers. Like television itself, the business of TV advertising has had to learn to cope with audience fragmentation. Through the nineteen-sixties and seventies, it was not unusual for the three major networks to capture eighty-five to ninety per cent of the available prime-time audience. That made it possible for advertisers to create national brands. In the eighties, as cable caught on, with channels like CNN, TBS, MTV, and Lifetime, it began to chip off pieces of the audience from the networks. "The Cosby Show" was the last TV series to command a mass following. During the 1985-86 season, more than thirty per cent of all households with televisions tuned in. (Last year, "American Idol," the most popular show on TV today, pulled in fewer than nine per cent of all television viewers in the U.S.) On any given day, most viewers are watching niche programming, from Rachel Maddow to Rachael Ray. The niches deliver fewer people to advertisers, which isn't good, but in theory they also deliver a more engaged and more quantifiable audience, which might be good if it means that you can efficiently target the people who are especially receptive to your message. Nevertheless, many of the biggest brands continue to pursue what remains of the mass audiences of old, which is why ad time during the Super Bowl is so expensive.

On YouTube, the niches will get nichier, and the audiences smaller still. But those audiences will be even more engaged, and much more quantifiable. Advertisers have to rely on ratings and market research to get even a rough approximation of who's watching which show. Because YouTube is delivered over the Internet, the company will know exactly who is watching—not their names but their viewing histories, their searches, their purchases, their rough location, and their online social connections. As Shishir Mehrotra, YouTube's head product manager, explained to me, "Advertising will be done at the level of the audience rather than at the level of the show. Content is no longer proxy for an audience—we know who the audience is. We know what your preferences are, the types of shows you like to watch." If you posted a video of your trip to Hawaii on YouTube, chances are YouTube is going to advertise airfare to Honolulu to you. Advertising can therefore be highly focussed, not the blunt instrument it is now.

That's the theory, anyway. But audience-based buying is kind of creepy, privacy-wise, and it has alarming demographics-as-class implications. Would the one per cent watch Mercedes ads during the Super Bowl, while the rest of us watched ads from Walmart? Is audience-based advertising even practical? An agency would have to make thirty ads for thirty sub-niches. Say that a client wants to target the twenty-one thousand people who currently subscribe to Vegan Black Metal Chef's YouTube channel. "So you'd have to hire a media buyer who was an expert in Vegan Black Metal," David Cohen, of Universal McCann, said. "From a human-resources standpoint, that doesn't make sense, unless you can figure out how to automate it." According to Cohen, that's beginning to happen.

Several weeks after YouTube announced the arrival of YouTube Original Channels, it held a training program at Google's New York headquarters. Some sixty people, of varying ages, were in attendance, most with jobs at the production companies that would write, shoot, and edit the videos. They packed into conference rooms (which, like those at YouTube, are themed) for thirty-minute presentations from experienced YouTube creators on best practices. Sometimes people fanned out for breakout sessions around the vast Google floors that run the entire block from Eighth to Ninth Avenues, and which Google workers use scooters to navigate. The sessions I attended, in a room called Brass Monkey (the theme was New York bars), had the aspect of a nerdy summer camp.

Ben Relles, an employee at YouTube Next Lab and the creator of the Barely Political channel on YouTube, who had an early success with his 2007 "Obama Girl" video, featuring the actress Amber Lee Ettinger as a young Obama groupie, led off the first session. His subject was why certain videos go viral, and whether it was possible to study the data and deduce techniques that all producers can use to increase traffic. "It's not true that viral videos are always accidents," he said. Although people tend to think that viral videos are serendipitous, in fact, Relles said, six of the top ten most-viewed YouTube videos in 2010 were scripted and produced just like TV shows. The difference is that the poetics of YouTube favors authenticity over production values. But what looks good enough on your desktop may look cheap in your living room.

The day's second session, on Audience Development, was led by Next Lab's Andres Palmiter and Ryan Nugent. "The point is to bring people back on a daily basis," Nugent said. "How do you leverage one viewer into many?" He reminded the participants to study the habits of their audience. Thanks to YouTube Analytics, the traffic-analysis program that YouTube makes available to everyone who puts up a video, creators can know both the size of their viewership and where people are watching—by country and state—as well as when they watch and how long they spend watching. If your audience is young, you want to post your video around 3 P.M., when kids are getting home from school. "Find out what it's like to be a user," Nugent advised.

Everybody took lots of notes, but I sensed a disconnect between the information people and the entertainment people. Familiar concepts from television, like "comedy" and "act structure" were spoken of with vocal quotation marks around them. During the Q. & A. period, someone asked, "What do you mean by 'a show'?"

"What do you mean, 'What do I mean by "a show"?' " Nugent replied.

"Well, can you talk about the difference between shows, playlists, and channels?"

Toward the end of the year, Kyncl came to New York for various meetings, and I went back to Google to see him. This time, I went to the eleventh floor, which Google has recently taken over. These conference rooms are themed according to both famous painters (an iconic work of each room's namesake is rendered in glass around the door) and hit television shows from the past and the present. We met in the "Cosby Show" room, a nice touch.

Kyncl was excited about the new YouTube home page, which represents a major change to the interface. The cluttered old home page has been replaced by a sleek and streamlined menu of categories against a luscious black background on the left side of the screen. Not surprisingly, the redesign has been unpopular with some of the old-time users.

Most of the new content, Kyncl said, would begin "rolling out" in the first half of 2012. "I think it's fair to say we spread our bets wide, and we can watch how things develop and decide which areas we want to go deep in."

A number of people I had spoken to about the channel initiative were having trouble defining what exactly it is. Is Kyncl building a Web-based Comcast or Time Warner? Some believe that to be the case, but Jim Louderback, the C.E.O. of Revision3, an Internet video network, told me, "I don't think he's building a cable-TV competitor. I think he's building the flip side of the cable business—a bundle of premium content that viewers just can't live without. I see them more focussed on creating and nurturing new original properties similar to HBO, Showtime, and Comedy Central." Is YouTube attempting to seize the means of production from Hollywood? James McQuivey, an analyst with Forrester Research, thinks so. "They're saying, Fine, you don't want to sell us your content, you want to tie everything up in distribution deals—fine, we're going to make our own deals. Not just U.S. deals but global-rights deals, because YouTube is the largest video platform on the globe, and we're going to sign Madonna and Amy Poehler, and guess what, this train is leaving the station, get on it or not."

A prominent Hollywood insider told me, with a note of nostalgia in his voice, "I can tell you what YouTube is not going to do—generate shows like 'Friends,' '24,' and 'C.S.I.' The world of TV I grew up with, where hit shows threw off hundreds of millions for the creators and networks—that's not going to happen." But others think it will; all it takes is a hit.

I wondered if there was any danger to the brand, in moving so decisively from the user-generated anarchy of the old YouTube to YouTV, where control and surveillance are centralized in the heart of the Googleplex. In its attempt to increase watch time, attract more viewers, and provide advertisers with as customized a customer as possible, YouTube risks alienating its core constituency—Chad Hurley's "everyday people." MySpace suffered steep reductions in traffic when it altered the user experience with redesigns and increased ads. Netflix lost more than half its value in the stock market and provoked a customer revolt after announcing its plan to separate the streaming and the DVD sides of the business. It's possible that YouTube could make a similar mistake, by offering bigger, more professional niches than its amateur-niche audience wants right now. For all the information that new-media companies have about their customers, they can still fundamentally misjudge when those customers are ready for change.

"It's certainly not going to be easy," Kyncl said of the new venture. "There's a lot of work to be done, to make sure this works. But, as a friend who just landed a job at one of the networks said, 'At least you guys are swinging for the fences. There are a lot of other people who are just sitting around and watching things happen.' " ♦



On the Trail of an Intercontinental Killer
In 1990, trash bags of human remains were discovered in Vinegar Hill, Brooklyn.

By NICHOLAS SCHMIDLE
A little after 9 a.m. on Sept. 15, 1990, the owner of a steel-products company pulled up to her office in Vinegar Hill, near the Brooklyn Navy Yard, and spotted a black garbage bag sitting on the sidewalk out front. She parked her car and went to move the bag when she noticed it leaking blood. The woman called 911. Within the hour, Ken Whelan, a homicide detective from the 84th Precinct, peered into the bag. It was full of human body parts.

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Whelan, who was 42 at the time, with a fleshy face and sandy brown hair, roped off the area. While he was waiting for the crime-scene technicians to arrive, another Vinegar Hill resident approached and told him about a second suspicious garbage bag just around the block that was buzzing with bees and flies. Inside that bag Whelan found two arms and a leg. Hours later, a few blocks away, he discovered a third bag containing a torso.

The medical examiner concluded that the body parts belonged to one woman, between 5-foot-6 and 5-foot-7, approximately 195 pounds. (Her head and hands were never found.) According to the autopsy, the victim had been dismembered post-mortem with a band saw, a carving knife and a hacksaw. Whelan scanned the missing-person files, but without fingerprints or a face, the possibilities seemed endless. He spent the next few days canvassing Vinegar Hill for clues. No one recalled seeing or hearing anything unusual.

On Sept. 26, the missing-persons bureau called Whelan with a potential lead: a 61-year-old resident of the Bronx named Mary Beal had disappeared on the day the trash bags were discovered. Beal, a real estate agent and part-time court translator, lived in a brick apartment building off Mosholu Parkway. She shared a cramped unit with a handful of dogs. "If you ever don't see me with the dogs one day, come looking for me," she told a neighbor. When Beal missed her morning walk, the neighbor called the police, who, in turn, notified the family. Beal's closest relatives, a sister and a nephew from Chicago, informed Whelan that Beal had recently broken her left ankle. Whelan located the X-rays and rushed them to the medical examiner's office, where a pathologist X-rayed the left ankle of the corpse found in Brooklyn. The images matched.

Whelan began investigating Beal's background and relationships. He discovered that in the mid-1980s, Beal, who spoke Serbo-Croatian, translated a custody battle between a Yugoslavian named Smajo Dzurlic and his second wife. Dzurlic was balding and short, barely five feet tall, but Beal apparently found something about him appealing.

Reviewing Beal's telephone records, Whelan noticed "frequent and regular" calls between Dzurlic and Beal until the day she disappeared. A tape recovered from Beal's answering machine contained messages and recorded conversations that pointed to a passionate, yet troubled, tryst. "In my house we [expletive]," Dzurlic said during one call. "Now we are going to [expletive] in your house." On Sept. 13, Dzurlic left five messages, pleading for Beal to return his call. "It sounded like he was getting more and more drunk as the day was going on," Whelan recalled.

"Smajo causes me so much sorrow," Beal told Dzurlic's sister, Muzafera Klicic, just days before she was killed. "Nobody in my life ever hurt me so bad."

By late September, Whelan's investigation had turned into a hunt for Dzurlic. A neighbor reported last seeing Dzurlic on Sept. 15, before he and his third wife, a younger woman named Sadija Agovic, "went to the store and never came back." Around that time, Dzurlic contracted a Bronx-based construction foreman to sand and refinish the floors of his house. When the job was done and the balance owed, however, Dzurlic was gone; the contractor took Dzurlic's living-room furniture as payment.

Dzurlic grew up in Plav, a Muslim-majority town in what was southern Yugoslavia, near the Albanian border. He immigrated to New York City in the spring of 1971 with his first wife and three children, working days as a taxi driver and nights as a doorman. There were run-ins with the law. In 1974, he pleaded guilty to attempted murder after firing a pistol at a suspected home intruder. Eight years later, he beat a pedestrian in Midtown with a nightstick because the man banged the roof of his cab in heavy traffic. Then Dzulric's second wife, Zinka, accused him of throwing her out a five-story window. When they separated, Mary Beal translated the proceedings.

Legal troubles notwithstanding, Dzurlic never let on that he was thinking about leaving the United States. He had recently drawn a loan for a pair of Ford taxis and their prized medallions, leasing one car and driving the other himself, and he made his monthly payments on time. In June 1990, he even bought a row house in the Bronx, where he lived with Agovic, his third wife. Beal brokered the sale.

Four months after the garbage bags appeared, Whelan got a warrant to search Dzurlic's Bronx residence. There was a pile of mail near the entrance. Dishes crowded the kitchen sink. A knife rested on the breakfast table between two glass ashtrays. The crime-scene techs went to work. Having sprayed the house with luminol, they found traces of blood on the kitchen wall and on two black garbage bags. Lab results showed that the blood was "consistent" with Beal's, though forensic technology at the time precluded them from being more precise. And without any witnesses to assist in building a case or the slightest notion of Dzurlic's whereabouts, the D.A.'s office opted against pressing charges.

Years passed. Whelan left, and another detective, Thomas Hickey, took over the case. In 1994, Hickey interviewed Agovic, Dzurlic's estranged third wife, over the phone. Agovic, who was living in Belgium at the time, denied any firsthand knowledge of Beal's death. But she claimed that Dzurlic's sister, Muzafera Klicic, had sent a letter revealing Dzurlic as the murderer. So Hickey knocked at Klicic's door in the Bronx and threatened to arrest her unless she talked. Klicic subsequently appeared before a grand jury and recalled, under oath, that on the morning of Sept. 14, 1990, Dzurlic came to her house and announced, "There will be no more Mary."

Klicic asked what he meant. Dzurlic said Beal was "sleeping" in his house.

"How can she be sleeping in your house when she has her own place?"

"She is dead."

"How did she die?"

Dzurlic confessed to his sister that he had hit Beal over the head with a hammer.

Finally, on Jan. 18, 1995, Kings County charged Dzurlic with murder. The problem was finding him. He had lived in Belgium for some time, though no one — not the New York Police Department, Interpol, the Belgian police, Europol or the F.B.I. — knew his whereabouts. Belgian officials insisted that Dzurlic had returned to the former Yugoslavia, but the civil war there left authorities far too preoccupied to assist with an American manhunt.

Almost 10 years went by. Whelan and Hickey had long since retired when, in 2004, James Osorio, a detective from the department's Cold Case Squad, reopened the file hoping that fresh eyes might lead to something. Osorio contacted the F.B.I. for information about Dzurlic, but he didn't get far. "There was no record of Smajo," he told me. "He pretty much vanished."

In early November 2006 an F.B.I. agent named Mike Clarke looked across a small lake 10 miles northwest of Tirana, Albania, while a pair of divers rummaged through the muddy water. Two weeks earlier, police responded to a report of something unusual bobbing on the surface. The object was a female body part. The police ultimately found everything but the woman's hands. Following an unsuccessful search for a culprit, Albanian investigators requested help from Americans at the embassy, as they sometimes do on difficult cases. The Albanians had recently discovered another assemblage of body parts, and they didn't want to find a third. "They believed this was a serial killer," Clarke says.

Clarke, who was an athletic-looking 44, walked along the water's edge. Earlier that year, he arrived in the Balkans as the F.B.I.'s first Sofia-based legal attaché, responsible for all of Bulgaria, Macedonia and Albania. The majority of his work involved counterterrorism and organized-crime cases. But there was a macabre element to this crime scene that caught his attention.

Clarke visited the morgue next. He quickly realized that he wouldn't glean any insights from the corpse: doctors had stitched the body back together and incorrectly attached the legs, so that the right limb was fixed to the left hip socket, and vice versa. And the morgue lacked refrigeration, so the unidentified corpse was beginning to decompose. Clarke called F.B.I. headquarters to ask for help. There was no apparent U.S. connection, he admitted, but helping the Albanians on the case would create good will inside their government that he could one day leverage to build organized-crime cases or pursue terrorism investigations. Three agents — a forensics specialist experienced with mass graves in Kosovo and two profilers from the F.B.I.'s Behavioral Analysis Unit, or B.A.U. — landed in Tirana five days later. (The B.A.U. and its sister organization, the Behavioral Sciences Unit, were created to analyze "unusual, bizarre and repetitive" criminal acts; Jodie Foster played one of these profilers in "The Silence of the Lambs.")

The four agents set out the next morning. Gary Reinecke, the forensics expert, despaired at finding the lake shore littered with cigarette butts and crisscrossed with tire tracks. "Any physical evidence that might have been here is lost," he told Clarke. At the morgue, Craig Ackley and Dan Bermingham, from the B.A.U., pondered the corpse as if it were an abstract painting — "What does this say? What does this show me?" — to try to get inside the perpetrator's head. They all eventually reached the same dire assessment. "You don't know who the victim is, you don't have a crime scene roped off, you don't have an autopsy, you don't know the area," Ackley told me. "Developing a suspect out of that is virtually impossible."

At Tirana's Sheraton hotel that evening, Clarke fielded suggestions. Reinecke recommended shipping the body back to the United States, where he could arrange for a proper autopsy and potentially learn something about the woman. Ackley and Bermingham backed the idea.

Clarke phoned headquarters again and got permission to take the unusual step of transporting the unidentified body back to Washington. The next day he purchased a lead-lined casket for $5,000, placed the corpse inside and paid a welder to seal the casket shut, per airline regulations. On Nov. 17, he watched the ground crew load the casket into the cargo bay of an Austrian Airlines flight, bound for Dulles Airport.

Four days after returning from Albania, Craig Ackley was back in his office waiting for a pair of cold-case detectives from the New York Police Department to arrive. (Besides supporting F.B.I. investigations, the B.A.U. also advises state and local authorities on their more vexing cases.) Ackley continued contemplating the Albanian murder. The autopsy results indicated that the woman died from blunt-force trauma to the back of the head and was dismembered post-mortem, but Ackley still didn't know enough to begin sketching a profile of a suspect.

The homicide detectives arrived, accompanied by a couple of agents from the F.B.I.'s New York office, and Ackley led the group into the B.A.U. conference room. A few hours later, when the group broke for coffee and bagels, one detective, James Osorio, overheard Ackley discussing his trip to Albania and interrupted the conversation. "I wish I would have known," Osorio said. "I have a fugitive on a case that I think is over in that area."

Ackley asked what the fugitive was wanted for. "Murder," Osorio said. He rehashed the details of the Mary Beal case — the dismemberment, the plastic bags, the surgical cuts — and offered his hunch that the key suspect, Smajo Dzurlic, had long since fled the United States and was living somewhere in the Balkans. Osorio also described a rash of unsolved murders that took place around the Belgian city of Mons in 1996 and 1997, near the time Dzurlic was living in Belgium. Each of those crimes featured dismembered female victims.

"You're kidding me," Ackley said. He described the lake and the victim in Albania. "What are the odds of that?"

The rest of the room watched in disbelief, wondering if they were on to a globe-trotting serial killer. "It's so rare to have the opportunity to work up one of these cases," Barbara Daly, one of the New York F.B.I. agents present, recalled. Ackley phoned Clarke, the F.B.I. agent, to let him know what had come of the floater in Albania. "Now we had a New York nexus," Clarke told me. "The F.B.I. had an interest. It was off to the races."

Having located Dzurlic's birthplace, Plav, on a map of Montenegro, Clarke searched around for a point person, a local law enforcement official with whom he could coordinate the F.B.I.'s investigation. "I'd like to say that there's some superdatabase, Interpol or something, but it really comes down to personal relationships, developing trust between police officers," Clarke told me. He scanned the record of international cops who had attended the F.B.I. academy in Virginia and found a young Montenegrin graduate on the rolls. His name was Miodrag Stijovich, better known to his classmates as Miki.

Clarke reached Podgorica, a charmless city comprised of Communist-era apartment blocks, in the afternoon. Over coffee, he handed Miki a file, which included a digitally enhanced sketch of Dzurlic, since the Americans hadn't seen a photo of him in more than 15 years. Miki quickly leafed through it and declared, "If he's here, we'll find him." Days later, Miki contacted Clarke with good news: a surveillance team had tracked down someone matching Dzurlic's description. The individual was living in the upstairs apartment of a multifamily home in Podgorica. He wore a Yankees cap, drove a taxi for a few hours every morning and tended to his fig, apple and orange trees in the afternoon. There was just one discrepancy; the man went by the name Smajlje Tulja.

Before the police made a move, Clarke wanted proof — fingerprints ideally — that they had the right guy. Miki found one on file from Tulja's ID card application and sent it to the F.B.I.'s fingerprint database in West Virginia, where Dzurlic's prints were stored from his stateside arrests. On Feb. 8, Clarke's phone rang in the middle of the night. The prints lined up.

Since the extradition treaty between Montenegro and the United States does not apply to Montenegrin citizens, Clarke and his colleagues were forced to weigh several options. One was to lure Dzurlic out of Montenegro on a false premise and arrest him in a country from which he could be extradited. They settled instead on extraterritorial prosecution, where Montenegro would prosecute Dzurlic according to its own legal procedures and sentencing guidelines for the crimes he allegedly committed in New York. Just two weeks after Clarke briefed Miki, on a cold, windy night in February 2007, around two dozen Montenegrin policemen fanned out around the terra-cotta-topped wall that surrounded Dzurlic's house. A team of plainclothes officers scaled the aluminum staircase leading to the entrance. One of the officers rapped on the door. No one answered. He knocked again.

Dzurlic came to the door wearing a green zip-up sweater and jeans. The officers spun him around and handcuffed him, then streamed into the apartment to search the premises. After an hour, they brought Dzurlic outside and put him into the back seat of a patrol car.

While the Montenegrin prosecutors leafed through stacks of old police files from New York, Clarke probed the unsolved murders in Albania and Belgium. He couldn't get over the similarities between the murder of Mary Beal, the homicides in Belgium and the victim from Albania. Five months after Dzurlic's arrest, Clarke flew to Belgium, along with Craig Ackley and Dan Bermingham from the B.A.U. They wanted to discuss the possibility that Dzurlic was the person the Belgium press had coined le dépeceur de Mons, or the Butcher of Mons. Between January 1996 and July 1997, five women were murdered and dismembered in the vicinity of Mons, a quaint city of about 100,000 people in southern Belgium. Ackley too had been examining the placement of the cuts and the instruments used, and, like Clarke, found the murders to be "very, very similar."

Soon after the F.B.I. delegation arrived at the police station in Mons, Ackley broke out his laptop and briefed the Belgian authorities on all these commonalities. The Belgians, however, were not persuaded. "The party line was that Smajo Dzurlic was a 'person of interest,' " Clarke told me. "They knew about Smajo and had a picture of Smajo. They said they had done everything in their power to try and put Smajo in Mons during the time frame of the murders but had come up empty." According to cables acquired through the Freedom of Information Act, the Belgian police believed Dzurlic had fled the country as early as June 1995 — six months before the first murder occurred in Mons — when his son tipped him off that the Americans wanted him in connection with Beal's death. When Dzurlic was finally in custody, Belgian officials were so certain that he wasn't the Butcher of Mons that they showed no interest in questioning him about it. "The trail of Dzurlic has been explored," Dominique Francq, a prosecutor in Mons, told me. "Was he in Belgium? Yes. But not in Mons. If that was the case, he would now be in prison, and I would be drinking Champagne."

On March 19, 2008, Dzurlic entered the courtroom in Podgorica wearing a dark brown suit and a white dress shirt unbuttoned at the neck. He read a statement aloud that declared his innocence and described his arrest as an F.B.I. conspiracy. "This is the biggest-ever setup by the F.B.I.," he said. "They have brought great shame to my close and more distant family. I repeat, I have nothing to do with her murder and I am not guilty." Dzurlic sat back down, flanked by a pair of husky bailiffs. He wouldn't speak again for the remainder of the trial.

Back in Brooklyn, Jon Besunder, the lead homicide prosecutor for the Kings County district attorney's office, corralled witnesses to testify via videoconference. One by one, neighbors, family members, landlords and employees of Dzurlic's and Beal's squeezed into a small conference room in the Kings County courthouse, facing a single video camera, their statements broadcast over a sometimes fuzzy connection into a courtroom 4,600 miles away. John Figueroa, Beal's nephew and the first witness, told the jury that Beal's murder had "deteriorated the fabric" of his family. "To find out one of her daughters was dismembered and her hands and head will never be found?" Figueroa told me. "That pretty much destroyed my grandmother."

Agovic, Dzurlic's third wife, testified by video from a town in eastern Belgium after an F.B.I. agent and a Belgian cop tracked her down. When asked what she knew about the murder, Agovic claimed that Muzafera Klicic, Dzurlic's sister, told her that Dzurlic "made some problem." The judge asked if "some problem" meant killing Beal. "Something like that," Agovic replied.

Dzurlic's lawyer, meanwhile, worked to exploit a procedural loophole that would exempt Klicic, the prosecution's key witness, from having to speak in court. In Montenegro, close family members of a defendant can evoke a legal privilege excusing them from testifying, a practice not recognized in the United States. Ultimately, Klicic showed up in person in Podgorica and exercised the exemption clause. The development sent Besunder, who had been following the case for nearly two decades, into a panic. Without Klicic, whose grand-jury statements formed the basis of the longstanding warrant for Dzurlic's arrest, the jury panel had only piles of circumstantial evidence and suspicious behavior around the time Beal's body was discovered. "Did anybody see my father kill Mary Beal?" said Selman Dzurlic, Smajo's son. "Do we have a witness like that?"

A five-member panel of judges began its deliberations on June 22, 2010, nearly 20 years after Beal's death. (In Montenegro, like many other European countries, an investigating judge, joined by another judge and three "lay" judges, constitute the jury.) Dzurlic faced a maximum penalty of 15 years for the murder and six months for the 14 bullets police found when they searched his house. The panel deliberated for 10 days before filing back into the courtroom, where the presiding judge rose and read the unanimous decision aloud: guilty on all counts. Dzurlic received a sentence of four months for the bullets, a 100 euro fine for court fees and 12 years for murder. He didn't flinch as the verdict was being read.

Montenegro's main penitentiary sits in a narrow valley five miles northwest of Podgorica. I arrived at the prison on a damp winter morning last year. A tall guard in a navy blue jumpsuit escorted me into a visiting room equipped with a Samsung television and a kitchenette.

Smajo Dzurlic, who is now 71, shuffled into the room, his wrists and ankles unbound. He wore a brown argyle V-neck sweater, and his head barely came up to the guard's chest. "Do I look dangerous to you?" he asked, as we sat beside each other at the end of a long, rectangular table. "They figured I was some big man, like Son of Sam or something," Dzurlic said in rusty English. "But they gave me time for no reason. I'm not a murderer. Not a murderer whatsoever."

Dzurlic's lawyer, Drasko Djukanovic, told me that he had already appealed to the superior court. "After the superior court," he said, "I will write to the constitutional court, and after that I will write to Strasbourg" — the site of the European Court of Human Rights, Europe's premier appellate court. The appeal questions the source of the blood found in Dzurlic's kitchen, suggesting that it could have been from Beal's accidentally cutting herself on a previous visit rather than an on-site butchering. It also emphasized that there was no witness. (Dzurlic's younger brother told me that Muzafera Klicic, his sister, testified before the grand jury only after being "psychologically tortured.")

Dzurlic's memory went in and out during our conversation. One minute he recalled specific times and Manhattan intersections where he had been when pivotal episodes occurred; the next minute, when discussing events in September 1990, the month Beal was murdered, he forgot basic life facts, like whether or not he was ever actually married to Agovic. Then he claimed not to drink alcohol, despite references throughout the police file to the contrary, a photograph of him and Beal sitting on the couch with a bottle nearby and a D.W.I. arrest in 1985. "That was a setup, and I didn't want to blow," he said. "I was upset and I didn't want to blow. Definitely, that was a setup."

I asked him about his relationship with Beal. Dzurlic, who has a severe underbite, listened intently while his jaw jerked side to side, and he seemed to be gnawing on his tongue. Dzurlic's lawyer maintained throughout the trial that Beal brokered the sale of Dzurlic's home but stated that his client's relationship with her ended there. "Nothing else I had to do with her," Dzurlic told me. I read off evidence suggesting otherwise: phone records, transcripts from taped conversations, neighbors who saw the two of them together and the photograph of them sitting on the couch. "Once I bought the house from her, O.K., we came closer," he conceded. "She helped me to place my children with my sister" — the outcome of the custody battle — "and I respect her for that. But I have nothing to do with her more."

I pushed him on the lewd phone conversation captured on Beal's answering machine, where Dzurlic proposes that he and Beal have sex in her house, since they already did in his.

"That's not me," Dzurlic said. "That's made up. That's not me. No, no, no. That's absolutely not true."

Knowing that Dzurlic had never been questioned about the murders in Mons, I asked him whether he killed the women there. He stared back at me for nine very long seconds. "Do you think I did that?" he said. "Shame on them, whoever is against me for the murder. You know that the cab driver in New York is the most hard-working in the world? You know about that? Think of the cab driver who go to kill somebody like that! I would be out of my mind absolutely. They accused me for 13 peoples. All ladies. But they never convict me for 13. For Mary Beal, they convict me. That was a trick, nothing else. Poor Mary Beal. I feel sorry for her."

Dzurlic was growing irritated, and I sensed his patience running out. (He had warned me earlier, through a guard, that the interview would end if he didn't like my questions.) So I asked him, if he was not the monstrous, globe-trotting serial killer that the New York Police Department and F.B.I. made him out to be, how could he explain the murder in New York City of a woman he knew intimately, followed by the disposal of five women in Belgium in similar fashion, followed, yet again, by the death of a woman in Albania around the time he lived there? Was he simply a victim of bad luck?

"It's odd," Dzurlic replied with a shrug. He was grinding his teeth, looking as if he wanted to add something more. Then he placed his hand on my left wrist and mused that maybe this trail of bodies was "destiny."

Destiny? I asked him what that could possibly mean.

"My destiny," he said. "It's to be accused."

Barry Minkow: All-American con man
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January 5, 2012: 5:00 AM ET
His many lives: entrepreneur, fraud fighter, pastor, movie actor - and serial swindler.

By Roger Parloff, senior editor

Second act: Barry Minkow, the former whiz kid behind the ZZZZ Best Ponzi scheme has grown up - but into what?
FORTUNE -- In 2009 a writer named Jon Meyers was hired to furnish a screenplay for what soon became the strangest movie project of his life. The film was to star a number of well-known actors -- James Caan, Talia Shire, Mark Hamill, Ving Rhames -- and it would chronicle the life of Barry Minkow.

Minkow (rhymes with Kinko) was the boy-wonder business phenom of the 1980s. In 1982, at age 16, he started ZZZZ Best, a carpet-cleaning company, from his parents' garage in Reseda, Calif., in the San Fernando Valley. The business expanded rapidly and went public in 1986, making Minkow, at age 20, worth more than $100 million on paper. But it was a giant Ponzi scheme and collapsed in May 1987. Minkow was convicted of 57 federal felonies, sentenced to 25 years, and ordered to pay $26 million in restitution.

Though raised as a Jew, Minkow then became an evangelical Christian. In prison he also began giving seminars and shooting videos designed to help detectives and accountants catch fraudsters of the type he had been. Paroled in 1995, he became the pastor of a San Diego church, where membership would more than quintuple under his charismatic leadership. In 2001 he founded the Fraud Discovery Institute (FDI), which assisted the Federal Bureau of Investigation, the Securities and Exchange Commission, and others in shutting down at least 20 serious Ponzi schemes, including one that had swept up $500 million in investor money, and another whose ringleader was sentenced to 30 years.

Asked to write a script based on this material, screenwriter Meyers jumped at the chance. But he soon encountered dismaying surprises. To begin with, Minkow was insisting on playing himself. Though Minkow still had the bodybuilder's physique he had acquired through weightlifting and steroid abuse as a teenager, he had never been blessed with a screen idol's good looks. And how could he, then 43, play himself in his early twenties? Furthermore, wouldn't it be thematically undermining for someone to star in a movie about his own redemption from narcissistic criminal to humble servant of Jesus?

Then things got stranger. Rather than receiving paychecks from a production company, Meyers and others working on the film got paid in irregular dribs and drabs over PayPal, with sums that came from Minkow, Minkow's wife, or two companies Meyers had never heard of before, including a trucking company. Sometimes Minkow just gave people $100 bills he peeled off a wad he kept in his pocket.

Finally, one day in September 2009, recounts Meyers, he was in the production booth with headphones on when Minkow and James Caan were schmoozing between takes. Perhaps forgetting about the open mike in his lapel, Minkow leaned over to Caan and whispered, "I financed this movie by clipping companies," Minkow said.

"Clipping," of course, is a slang word for "swindling." Minkow says the incident "never happened." "Not ever," he wrote Fortune in an e-mail in September. "And have him produce the tape."

The film's director, Bruce Caulk, did produce the tape. Scene 71, take 1. Minkow said it.

The movie has since been completed, but it now needs a new ending. That's because in March, Minkow pleaded guilty to conspiring to manipulate the stock of a then-Fortune 500 company, Miami-based homebuilder Lennar Corp. (LEN), which he caused to tank 26% in one day by making false accusations about it and its top executives. He did this, according to his plea agreement, to make money by short-selling (i.e., betting on Lennar's stock price to fall) and to assist a paying client who was attempting to extort money from Lennar that the client claimed to be owed.

In September, Minkow returned to federal prison, where he is beginning a five-year term and facing a new restitution order for $583 million -- the amount Lennar stockholders lost due to manipulation. Meanwhile, a church audit committee has been sifting through its records, where it is now clear that Minkow commingled personal and church funds for years. The movie's main backer, a former congregant, has sued Minkow for the return of more than $4.3 million he sank into the film and other Minkow ventures, alleging that Minkow raided the funds for personal purposes. Another church member -- a retired grandmother with health issues -- says Minkow left her with about $300,000 in unpaid loans; a third says Minkow forged his name on a $100,000 loan guarantee; a fourth alleges that Minkow opened credit cards in his name without his knowledge; a business associate says he is owed $47,000 for supplies; and another says the state's coming after him for $50,000 in taxes that he claims are Minkow's responsibility.

Minkow, meanwhile, is planning his next comeback.

The story of Minkow's life is comic, tragic, and psychologically perplexing. Minkow is blessed with intelligence, courage, indomitable drive, rhetorical gifts, an apparent desire to do good, and a record of documented beneficent deeds. Yet he also keeps doing ghastly things. His story is hard to read without pondering the question, Is character destiny? More narrowly, can a con man ever be redeemed?

Minkow's greatest gift is his ability to inspire others. His greatest failing is his inability to responsibly exercise his greatest gift. His business career is an astonishing morality yarn about that most titillating of subjects: intractable human failing.

"It's freedom I struggle with"

In his only extended interview since his rearrest, Minkow spoke with me for nearly three hours in August, after he was sentenced but before he reported to prison in Lexington, Ky. We met at his house in rural Crossville, Tenn., where he hastily moved his family after resigning his pastorship and pleading guilty in March. It's an unpretentious brick rambler on more than two acres of unwooded land he shares with his beautiful wife, Lisa; his twin 8-year-old adopted sons; two Siberian huskies; and a rambunctious Australian shepherd named Macho.

Minkow was bronzed, toned, and buff in his jogging shorts and a tank top emblazoned MUSCLE BEACH, VENICE, CALIFORNIA. In humid 90° heat he was building a handsome wooden fence. With a friendly hand resting on my shoulder, he explained that he had promised his wife that by the time he went to prison he'd have the fence completed, allowing her to let their boys and dogs roam in the yard with peace of mind. "I've never done anything like this in my life," he said. "I was a cowardly weasel who never liked physical labor. And now I love it."

Fine, but how did his life fall apart? Why is he headed back to prison?

"This is a drug case," Minkow says. "That's all it is." He started taking Vicodin in 2005 to relieve pain from a shoulder injury, he explains, then switched to OxyContin in 2006, gradually working his way up to 1,400 milligrams a day. "You think differently about things when you're on 1,400 milligrams a day," he adds. "And that is the story behind the story. That has kind of been glossed over."

Facing prison after his most recent conviction, Minkow worked out in the yard of his home in Crossville, Tenn.
Minkow says he weaned himself off his drug addiction -- secret even from his wife, he maintains -- by using a methadone-like substitute and then seeking outside help. By Thanksgiving 2010, he says, "I was clean and loving it." But by then he was under criminal investigation.

Did he commit securities fraud? "I was privy to insider information and that is a crime," he says. He didn't realize that what he was doing was illegal, he says, but later learned that there is a legal precedent establishing that it was. "Have you ever read it?" he asks. "It'll blow your mind. Everything going on on Wall Street is a crime. But big deal, I still did it. Please don't make it seem like I'm making an excuse."

Did he leave people with debts? Sure. He hadn't expected to get arrested, so he left some business associates in the lurch. Plus, some worshipers at his church invested in the movie, which may never be released, he says. "But it's not investment fraud," he adds. "We took [the] money, spent it as we said we would. It didn't work out great, I agree."

Did he commingle church funds? Yes, but he claims the church came out far ahead, especially considering that he hadn't accepted a salary there for several years. "I did a lot of things wrong," he says, "but trying to financially support that church was not one of them."

Minkow's lawyer submitted canceled checks in court showing deposits of about $1.6 million from Minkow's side businesses into church accounts over a three-year period. It's not known how much he took out. The church's board of elders declined to cooperate for this article. Current and former church members say the elders have told members to shun Minkow -- not communicate with him in any fashion -- because they don't think he has come clean with them.

The elders' perspective, Minkow says, is clouded by a conflict of interest. Over the years at least three of them shorted stocks on Minkow's recommendations. (Again, the elders declined to comment.) "They didn't do anything wrong in my view," continues Minkow, "and I take responsibility, but I do think it's a different story." He predicts that the FBI will not pursue the church's gripes against him because he was the church's biggest giver. He was "the Jew who laid the golden tithe," he quips.

"The point is, I'm back," says Minkow. "You know when I perform best? In custody. I work good under structure. It's freedom I struggle with. The Bureau of Prisons saved my life, and I hate to bother them again, but it looks like they're going to do it twice."

Barry Jay Minkow have been born with more energy than anyone could dissipate legally. He was diagnosed with attention-deficit/hyperactivity disorder as a child, took Ritalin from ages 6 to 15, and has taken Adderall since 2002. TV clips of Minkow during his ZZZZ Best days -- capped by a bravura performance on Oprah -- show a brash young man who keeps disappearing from view due to the violence with which he jerks his body to punctuate his sentences. Cameramen can't keep him in the picture.

The talented Mr. Minkow: A life of con

Frenetic energy was the signature feature of the ZZZZ Best (pronounced Zee Best) crimes. To launch the business, Minkow borrowed money from a loan shark. To expand it he stole jewelry from his grandmother; stole and forged checks and money orders; kited checks; altered customers' credit card receipts and forged their names on new charges; staged burglaries at his own offices and filed bogus insurance claims; fabricated invoices, financial statements, and tax returns; led lenders on a tour of a phony work project; defrauded banks; and, finally, hoodwinked a Big Eight accounting firm and a Wall Street law firm into helping him pull off a public stock offering. While doing all this he starred in the company's funny TV commercials, which played off the notion that most carpet cleaners were scam artists.

After the company collapsed, but before his arrest, his mother suggested he see her Christian spiritual counselor. (She had converted earlier.) Calculating that a quicky conversion might help him with his looming legal problems, Minkow agreed.

"But God took my wrong motives and accepted me despite my manipulative personality," he later explained in the second of his four autobiographical books. (Minkow disavows the first, Making It in America, which was published during his ZZZZ Best crime spree.)

At first, Minkow's conversion did not crimp his penchant for rococo lying. In a 60 Minutes segment that aired in early 1988 he told Diane Sawyer that all the ZZZZ Best crimes were committed without his knowledge by his top lieutenants. Later, he switched defenses, testifying at trial that, yes, he had committed the crimes, but had done so under duress from mobsters. "Thus," writes Minkow in his second autobiography, "I put my relationship with Jesus (now well over a year old) on the back burner and lied under oath to avoid prison and impress the public."

But Minkow's faith grew stronger, he has written, at the federal prison in Englewood, Colo., where he took correspondence courses in divinity from Jerry Falwell's Liberty University in Lynchburg, Va. While in custody he also gave seminars and even produced a video designed to help accountants and police detect white-collar fraud.

Minkow was released in 1995, obtained his master's in divinity, married, and then landed the head pastorship of the San Diego Community Bible Church in 1997. From Minkow's writings and recorded sermons there is no questioning his mastery of the tenets of evangelical Christianity, where his forte is "apologetics" -- defending the faith against doubters.

In some respects, Minkow appears to have considered his criminal background an asset for his new position, since it gave him an unusually deep appreciation for the miraculousness of Jesus's mercy. "Some of you don't have the advantage of being evil enough. I am uniquely qualified in that category for me to realize my need [for forgiveness]," he said in one sermon. "Good people don't go to heaven," Minkow often told his flock. "Forgiven people go to heaven." "The Christian life is not hard; it's impossible."

Luke 18: 9-14 was critical for Minkow. There Jesus stuns the crowd, as Minkow recounted in one sermon, by revealing that it is the reviled but humble tax collector -- Minkow calls him "a white-collar criminal" -- who will be saved, rather than the observant but proud Pharisee. When the tax collector cries out, "... be merciful to me, a sinner," Minkow explained, "it really means, 'I understand the standard. I'm nowhere near it' ... And yet, He says, 'I forgive you.'"

Minkow never regarded his own redemption as a done deal. Early in his pastorship, he wrote in his third autobiography, he recognized that he was taking an egotistical pride in his church's growing membership that was much like the one he had taken in ZZZZ Best's soaring stock price. "These points of similarity ... unlocked something inside me that I thought had been dead and buried," he wrote. He became a "manipulative" and "self-centered jerk" at elder board meetings, though when he walked out the door he became "the loving caring person I was hired to be. It was too bad I couldn't see out of one compartment into another to assess who I really was."

Minkow's first wife left him in 1999. He was in debt, which alimony exacerbated. "I never was too good at handling money," he wrote.

But he was beloved at the church. According to every current or former member who spoke to me -- including those who say they "got stung" in the end -- Minkow was amazing at helping congregants through personal and family crises. "From a Christian point of view, he was fabulous," says one.

The elders let him pursue side businesses to try to make ends meet.

It takes a thief

In 2001, Minkow met his current wife, Lisa, and took his fraud fighting to a new level. People sometimes sought Minkow's advice about investments they were considering. Over time he heard about some very fishy propositions, where congregants were being offered impossibly high returns. In those instances he posed as a potential investor himself, gathered evidence, and then wrote detailed reports about these dubious operators to his contacts at the FBI and SEC.

Minkow's nose for fraud was good, and his reports led to arrests and convictions of serious bad guys. His contacts in law enforcement were grateful and wrote letters attesting to the valuable work he had performed.

He founded the Fraud Discovery Institute in 2001. It was a for-profit company, though at first its only revenue came from private speaking engagements. He also continued giving free seminars to law enforcement, making regular appearances at the FBI academy in Quantico, Va.

Minkow met his wife, Lisa, in 2001, the year he founded the Fraud Discovery Institute. Unable to have kids because of his steroid abuse, they adopted twin boys in 2004.
With proof of Minkow's good deeds multiplying, Minkow's sentencing judge, Dickran Tevrizian, released Minkow from probation in 2002.

By late 2005, Minkow had uncovered at least 13 Ponzi schemes. In a commendation letter, the FBI acknowledged, "You identified millions of dollars of fraud and prevented further potential economic loss to hundreds of victims."

That year Minkow published his third autobiography, Cleaning Up, which rose to No. 25 on the New York Times bestseller list. One of Minkow's former prosecutors wrote a promotional blurb for its book jacket. Minkow spoke on CNN, NPR, CNBC, and Fox News. In May, 60 Minutes told his story in a segment in which Judge Tevrizian vouched for Minkow's turnaround. The following March, Sen. Patrick Leahy invited him to testify before a U.S. Senate subcommittee studying elder fraud.

But that year, 2006, Minkow's fraud fighting took a fateful turn. A hedge fund manager asked him a tantalizing question, Minkow told me in our August interview: "He said, 'You've had tremendous success uncovering private investment fraud. Do you think it translates to public companies?'"

Minkow had, in fact, been entertaining suspicions about corporations that employed "multilevel marketing" (MLM) strategies, where businesses enlist consumers to become distributors of their products, offering them commissions for signing up still more distributors, in a pyramidal pattern. Though many permutations of MLM are lawful -- Amway is a famous example -- others are outlawed in certain states, and some consumer advocates say MLM is potentially fraught with Ponzi-like peril.

Minkow began targeting several public companies pursuing MLM strategies. As he had in the past, he gathered evidence he alleged inculpated these targets and then sent confidential "fraud reports" to his contacts at the FBI and SEC. But now he also sent the reports to select short-sellers, who he hoped would pay him for the tips. The idea, he explained to me in our interview, was to eventually publicize the report, cause the targeted company's stock to take a well-deserved hit, and reward the short-sellers he'd tipped off in advance. He'd also short the target stock himself.

Is that business model legal? No one's sure. (This isn't what Minkow later pleaded guilty to.) In 1984, when Wall Street Journal columnist R. Foster Winans was caught trading the stocks of companies that he was about to tout or pan in his own newspaper column, he was arrested for securities fraud. It wasn't classic insider trading, though, because Winans wasn't a corporate insider, nor had he been leaked information by one. In 1987, Winans's conviction was upheld on the theory that he had misappropriated nonpublic information from his employer, the Wall Street Journal, and had traded on that.

But someone who works for himself can't be misappropriating information from an employer, observes Columbia law professor Jack Coffee in an interview. Now if he intentionally publishes false information about target companies, Coffee continues, that would be illegal stock manipulation. But if the information is true, or the person believes it is, it probably can't be stock manipulation.

On March 15, 2007, the Wall Street Journal reported that Barry Minkow, the fraudster-turned-private-investigator who "has won praise from the FBI," sent a report attacking the nutritional supplement company USANA Health Sciences (USNA) to the SEC and the FBI. That same morning Minkow posted the report on his FDI website. Its text, which launched a blunderbuss attack on USANA's products and business model, was dense and confusing. But the gist was that USANA's multilevel marketing practices resembled a "pyramid scheme." (Minkow disclosed on his website that he typically shorts the stocks of companies he investigates.)

USANA's stock dropped 15% that day.

The company denied Minkow's accusations, denounced him as a convicted con man, and sued him. But Minkow kept denouncing USANA, and its share price kept sinking -- 42% by July. He posted anti-USANA videos on YouTube and released new reports alleging -- accurately -- that a USANA spokesman and a medical advisory board member had embellished their résumés, claiming degrees or licenses they didn't have. The SEC began an informal inquiry into USANA, and the company was hit with several class-action suits.

Though some short-sellers did pay Minkow for his tips, they weren't very generous. "It was hard to get the business model to work," he told me in August.

But it was thrilling. "It was kind of like a narcotic effect," Minkow said. "Wall Street liked me again. I underestimated the allure of being accepted by the hedge funds, and people calling me. You saw a stock at 60-something, and then it went down to 18 or something. Not all because of me, but [still]."

Through persistence, Minkow did eventually stumble on a business model of sorts. Though the SEC dropped its inquiry into USANA in January 2008, Minkow kept dogging the company. Most of USANA's lawsuit against Minkow was thrown out in March 2008, since most of Minkow's allegations were constitutionally protected, a federal judge ruled. In May, USANA's CEO tried to take the company private to escape Minkow, but his plan failed on a shareholder vote.

Finally, in July 2008, USANA struck a settlement with Minkow. USANA paid him an undisclosed sum, and Minkow pulled down his Internet diatribes and targeted the company no more.

A month later a second Minkow target, Herbalife (HLF), struck a similar bargain. The very next month a third target, Nu Skin, reached a similar deal with Minkow.

In all, Minkow estimates, he made more than $1 million in 2008 from all his trades and tirades. Not a bad year for someone who was also, by now, an OxyContin addict, according to what Minkow told me this past August.

That fall, a new prospective client came to see Minkow. He was San Diego real estate entrepreneur Nicolas Marsch III, and he claimed that the big homebuilder and developer Lennar Corp. was defrauding him.

Lennar was a different breed of prey from Minkow's earlier targets. Lennar was then No. 256 on the Fortune 500 list, with revenue of more than $10 billion. It was being represented in its litigation against Marsch by O'Melveny & Myers, an 800-lawyer corporate law firm. Its lead attorney was Dan Petrocelli (pronounced Pet-ro-CHELL-i), who had handled the civil suit by Ron Goldman's family against O.J. Simpson and had defended Enron CEO Jeff Skilling in his criminal case.

Marsch alleged that Lennar had defrauded him in connection with two ritzy San Diego development projects, including the posh golf-course community known as the Bridges at Rancho Santa Fe. Lennar had misappropriated his $39 million investment, Marsch claimed, and then it cheated him of his share in the proceeds, which Marsch pegged in the hundreds of millions of dollars.

Lennar's legal filings asserted a very different story. The company argued that it owed Marsch nothing, that Marsch was a manipulative, litigious snake who had cheated Lennar of millions, and that Marsch was now trying to extort from the company money he knew no court would ever grant him.

The extortion charge stemmed from a very raw letter Marsch had FedExed to Lennar's seven outside directors in July 2008. In it Marsch asserted that he knew of some "dirty laundry" that Lennar CEO Stuart Miller and COO Jonathan Jaffe would not want "exposed," warned that Lennar might soon be known as "Lenn-ron" if the directors did not listen, and said he was prepared "to air Messrs. Miller and Jaffe's dirty little secrets in public" unless all his litigation was "completely resolved to my satisfaction prior to August 31, 2008."

Lennar's directors rebuffed the overture, and Lennar filed a new suit against Marsch in Miami state court leveling extortion-related charges.

Then Marsch hired Minkow.

Minkow: The Movie

By this point Minkow had substantial experience launching short-selling attacks on public companies. He had set up a side business that combed through databases looking for inflated educational credentials on the part of corporate officers. When he found a discrepancy he would short the stock, leak the story to a reporter, and hope for a price dip when the news hit. He eventually exposed résumé embellishments at more than a dozen companies, including MGM Mirage (MGM), Broadcom (BRCM), and EchoStar (SATS).

Though none of these attacks resulted in arrests or SEC actions, Minkow's reputation remained untarnished in the media, for whom he was a source of both tips and expert commentary. He became a regular guest of Neil Cavuto's on Fox Business Network, and after Bernie Madoff was arrested in December 2008 -- creating a demand for media-savvy Ponzi scheme experts -- he was invited to share his insights with Nightline, the Washington Post, the Los Angeles Times, and USA Today.

For Minkow, each media exposure seemed to trigger a need for more. For several years now he had wanted to star in a dramatic television series about himself. In 2008 he had a half-hour pilot shot. Then he decided that if he first starred in a full-length movie about his life, it might be easier to sell the TV show afterward, he explained to me in August. So he asked a prosperous congregant, Jeff Sachs (no relation to the economist-environmentalist), if he would fund the movie. Minkow told Sachs the movie would "inspire others and glorify God," according to a lawsuit Sachs later filed against Minkow. Sachs spotted him $1 million, and Minkow hired a production company to shoot his life story.

Lennar's lawyer, Dan Petrocelli, persuaded the government that Minkow was conspiring to manipulate the company's stock.
On Nov. 30, 2008, after a two-hour meeting with Marsch, Minkow e-mailed him an engagement letter, to which he attached a six-page "confidential proposal." In Phase I of the campaign, he proposed, he would investigate Marsch's fraud claims against Lennar and make videos of other Lennar "victims" (i.e., others with lawsuits or gripes against Lennar). They'd take this "case foundation" to Lennar, maybe in "early January," to see if Lennar would settle. If Lennar refused, they'd launch Phase II. That would involve going live with a website unleashing a "blitzkrieg" of attacks at Lennar with the "primary, measurable, deliverable" goal of "getting [it] back to the 'settlement' table." The proposal emphasized: "The media is the key [because Lennar CEO Miller] must become convinced that his reputation is at stake if he does not silence the 'squeakiest' of wheels."

Marsch was to pay Minkow $125,000 on the front end, plus a kicker of $1 million to $2 million on the back end "when settlement occurs or trial victory."

Marsch replied the next morning: "Let's proceed." (Marsch's current lawyer, Todd Macaluso, says Marsch hired Minkow solely to track down someone who had anonymously written Marsch claiming to be a Lennar insider who knew of wrongdoing at the company. "That and only that was the purpose of hiring Mr. Minkow," Macaluso says. "Marsch had nothing whatsoever to do with any other aspects of Minkow's investigations.")

In December, Minkow began gum-shoeing his hypothesis (never substantiated) that a $5 million personal loan Lennar COO Jonathan Jaffe had taken out in 2007, secured by his Laguna Beach home, was actually a disguised kickback of some kind. To try to prove this theory, Minkow made a "pretexting" call to the bank of Jaffe's mortgage broker, pretending to be the broker and asking for records. ("Hey, I saw it on The Rockford Files," Minkow told me. "[Rockford] never got in trouble.") The bank officer saw through the ploy and Minkow hung up.

At about the same time, Lennar's general counsel, Mark Sustana, was contacted by a Miami real estate broker, who asked for a private meeting. When they met, the broker said that Marsch had hired Minkow, who was looking closely at Jaffe's personal loan, and that the broker might be able to act as an intermediary if Lennar wanted to settle.

Word of both incidents got back to Petrocelli, who considered them a continuation of what he saw as Marsch's extortion attempt. He subpoenaed the bank officer and broker for depositions. But as Petrocelli was driving to the broker's deposition on the morning of Jan. 9, Lennar CEO Stuart Miller called to tell him that Lennar's stock was "nose-diving." Minkow had just publicized a fraud report on Lennar.

The report -- addressed to Minkow's contacts at the SEC, the FBI, and the IRS -- was posted on a website called www.Lenn-ron.com<http://www.Lenn-ron.com>, along with a YouTube video in which Minkow summarized his findings. Minkow said, among other things, that he believed Lennar "to be a financial crime in progress" and that Lennar treated "their joint ventures exactly like a Ponzi scheme." He also propounded his unsubstantiated hypothesis that the personal loan Lennar COO Jaffe had received might be a "disguised kickback" and an "undisclosed related-party transaction." While the report itself was convoluted and hard to follow, it used the term "Ponzi scheme" four times and made three allusions to Madoff.

Marsch had met with Minkow to review a draft of his fraud report the day before Minkow released it, according to e-mail traffic, and Marsch later admitted in a deposition that he had edited drafts of it. Nevertheless, in an interview, Marsch's current attorney, Macaluso, asserts that Marsch never gave Minkow the final green light to release the report. Marsch and his then-attorney Fred Gordon "were as surprised as anyone when Mr. Minkow elected to proceed on his own to publish," says Macaluso.

The day the report came out, Lennar's stock -- already battered from the burst housing bubble of 2007 and the credit crisis of 2008 -- fell 26%, before recovering some ground after CEO Miller appeared on CNBC to rebut it.

A few days later Minkow expanded his attack with a second website, www.Lie-nnar.com<http://www.Lie-nnar.com>. Lennar added Minkow as a co-defendant in its extortion suit against Marsch.

About a week after the campaign began, Marsch's then-lawyer Gordon contacted Petrocelli about the possibility of Lennar settling its disputes with Marsch and Minkow in one package deal. In e-mails Gordon explained that Lennar "finds itself in the same position as did Nu Skin, Herbalife, and ... USANA," which had all been represented by Denver attorney P.J. Poyfair, who "now represents Mr. Minkow." Gordon explained that after Minkow's previous settlements the stocks of his target companies "witnessed substantial recoveries." He also invited Lennar to pay Minkow and Marsch in Lennar stock, rather than cash, if it preferred. ("These statements are taken out of context," says Marsch's current lawyer, Macaluso. "Marsch did not participate in or approve any settlement or discussions.")

In responses to Gordon, Petrocelli demanded a retraction and apology from Minkow, and ruled out any package settlement. In an interview, Petrocelli says Lennar never considered paying Minkow a dime. That Marsch and Minkow were willing to be paid in Lennar stock -- notwithstanding having just accused Lennar of being a Ponzi scheme -- was "proof positive of extortionate behavior," he says.

Law enforcement authorities, prompted by Minkow's false accusations, initiated a criminal inquiry into Lennar. Minkow's FBI sources tipped him to the confidential probe. In an e-mail Minkow assured his sources that he wouldn't trade on that nonpublic information. Three days later he did anyway, using an account opened in his secretary's name. That constituted unambiguous insider trading.

Minkow fell further off his temperance wagon in April, when Petrocelli forced him to sit for three depositions. Minkow committed perjury at these, he admitted to me. Among other things, he claimed to have never traded Lennar stock, and he offered an array of implausible excuses for not being able to produce e-mails related to the case, including that he "lost [the] ability to receive and send e-mails for some reason," his "files were destroyed in a computer crash," that two of his laptops had been stolen in separate incidents, and that a hacker infiltrated both his personal e-mail and his FDI website, deleting items in both.

It got worse. Later that month Minkow sent Lennar's audit committee chairman an anonymous e-mail that he claimed had been sent to him at his FDI website. The e-mail purported to be from a Lennar insider, who had attached a putative smoking-gun memo revealing a plan to snooker the California Public Employees Retirement System (Calpers) on a land investment.

The attached document was a fabrication. It alluded to a genuine Lennar deal but was way off as to its most basic terms, and it misspelled the name of Lennar's chief investment officer. Though the memo had been redacted to block out both the name of its supposed author and a "cc:" recipient, the redactions had been accomplished electronically, and Lennar's lawyers were easily able to reverse the process. Upon doing so, the writer was revealed to be "abcdefghijklmnowqrstuvwx" and the "cc:" was directed to "abcdefghijklminop." Whether due to unfortunate coincidence or muscle-memory-induced typos, there were two nonalphabetical sequences in those strings of nonsense letters: "min" in the second string, and "ow" in the first. As in Minkow. (In our conversations, Minkow declined to comment on whether he fabricated any documents for his Lennar campaign.)

Meanwhile, USANA's former attorney Poyfair, now representing Minkow, contacted Petrocelli, saying that Minkow wanted to meet. On April 10, Petrocelli and Lennar COO Jaffe met with Minkow and Poyfair at a Las Vegas hotel. Minkow had asked that the meeting be held there because his TV pilot about himself, Redemption, was being shown at a Las Vegas film festival.

A "smoking-gun" memo that Minkow sent to Lennar, which he claimed he had received anonymously, turned out to be a fabrication.
Petrocelli made the case for why Minkow's allegations were false. Minkow responded that he felt he had been misled by Marsch and was willing to drop his campaign, according to Petrocelli. In exchange, though, he wanted $1 million. Jaffe and Petrocelli walked out. (Minkow confirms Petrocelli's account. Poyfair says he agreed to represent Minkow only for the limited purpose of drawing up a settlement document if Minkow were able to negotiate a deal with Lennar on his own.)

During the last weekend of this eventful month, Pastor Barry Minkow departed from his sermon schedule to deliver a special two-weekend homily on "forgiveness." At the second of these, which focused on the concept of confession, he observed: "One of the biggest temptations I have in my other life, investigating fraud, is the very real temptation to become the people and use their tactics that they're using to defraud people ... It's an awful, ugly temptation ... 'Well they're hurting people, and I'm just trying to unhurt 'em.' No, no, no. It's a slippery slope."

As his campaign continued, Minkow claimed to receive more e-mails from the purported Lennar insider, and a Citibank analyst got one too. Petrocelli's legal team, which had been scrutinizing Minkow's modus operandi for months, noticed that this insider's persona closely resembled that of an anonymous USANA insider from whom Minkow had purportedly received assistance on Internet message boards during his 2007 campaign against that company. Both insiders had a playful, taunting persona; both addressed Minkow as "convict" while according him obvious respect; and both used the phrases "Riddle me this, Batman" and "Happy hunting!"

In early May 2009, Minkow launched a fresh attack on Lennar, accusing CEO Miller and COO Jaffe of holding undisclosed bank accounts in the Cayman Islands and Switzerland. Miller and Jaffe immediately executed affidavits denying the accusation. Privately, they also offered bank-secrecy waivers to the government so it could verify that they held no such accounts.

When Petrocelli later forced Minkow, through litigation, to reveal the basis for this accusation, he identified an investigator he had hired, Terry Gilbeau, as his source. Gilbeau, when deposed, said he got the information orally from another investigator, whose name he could not recall, and said he regarded it as just "preliminary intelligence" that he assumed Minkow would "vet out" if he intended to rely on it.

In May, Petrocelli made a written submission -- the first of several -- to the criminal division of the U.S. Attorney's Office in Miami presenting evidence that, in his view, showed that Marsch and Minkow were conspiring to commit extortion and securities fraud. He also alerted authorities to another curiosity he had come across during discovery: Two of Minkow's consultants in the Lennar case had been paid via PayPal accounts belonging to the San Diego Community Bible Church.

"If you can't trust the pastor …"

As the full-length movie about Minkow's redemption was shot in Los Angeles in August and September 2009, litigation nets were constricting around Marsch and Minkow. The trial of Marsch's main allegations against Lennar started in San Diego in June, and over the summer Marsch was cross-examined by Petrocelli for 16 days. At the same time Petrocelli asked the Miami court, which was hearing Lennar's attempted extortion suit against Marsch and Minkow, to sanction Minkow for a wide range of litigation misconduct.

Though Marsch appeared outwardly to be wealthy, the litigations were taking a toll. To fund them he borrowed $3 million from an investor group in exchange for 65% of any potential recovery from Lennar. In May 2009 he borrowed $600,000 from Minkow and his congregant and business partner, Sachs, in exchange for another 5% of his recovery. Marsch also sold the pair a Colorado ski property for $850,000 of Sachs's cash and $500,000 in forgiveness of fees Marsch now owed Minkow, since the Lennar campaign had lasted so much longer than anticipated.

By the close of 2009, Minkow may have been experiencing financial strains of his own. He approached a retired, divorced grandmother in his congregation, whom I'll call Linda. As pastor, Minkow had helped Linda's family through difficult times. Now he asked Linda if she would take $150,000 out of her home-equity line and give it to another member of the congregation, whom I'll call Steve, so that Steve could invest it in Minkow's movie to pay for "post-production" expenses. In exchange, Steve would execute a promissory note to Linda, which Minkow would co-sign as guarantor.

Linda did as asked. "If you can't trust the pastor," she says in an interview, "who can you trust?"

A month later Minkow came back to Linda and asked for another $100,000 loan. This one was to expand a business he had set up owning FedEx delivery routes. (FedEx Ground does not directly employ its delivery truck drivers. Instead, it hires contractors to provide drivers for its trucks.) Linda gave Minkow the money, and he gave her another note. He also said he'd give her a piece of the trucking business, which would yield several thousand dollars a month. (In our interviews, Minkow said he had indirectly paid some money back to Linda -- maybe $50,000 -- by paying Steve to do remodeling work on Linda's house. But Minkow also admitted, "I kind of knew [Steve] was squandering the money and not doing it." Steve did not return e-mails.)

As 2010 began, Minkow was hurtling toward disaster. In January, Minkow got a subpoena from the SEC, revealing that he was being investigated for securities fraud. In February, Marsch declared bankruptcy in San Diego and also put his company, Briarwood Capital, into Chapter 11. In April the ski property Marsch sold to Sachs and Minkow also went into bankruptcy. In July, after Marsch gave seemingly inconsistent testimony in the San Diego and Colorado proceedings, the San Diego bankruptcy judge ousted him from control over his own company, saying he had lost confidence in Marsch's "capacity for candor and honesty."

On Friday, July 16, the judge who had presided over Marsch's 11-month trial against Lennar in San Diego, Superior Court Judge William Nevitt Jr., delivered his decision. While Marsch had been a persuasive witness during his direct testimony, Judge Nevitt wrote, his story "did not withstand close scrutiny and cross-examination." Nevitt concluded that Marsch "repeatedly gave false testimony on material issues." Lennar owed Marsch nothing, he concluded, and, on the contrary, Marsch owed Lennar $17 million.

Nevitt's ruling meant that there would most likely be no payoff for Minkow's long, costly mission for Marsch. Minkow was ruined.

At his sermon that weekend, Pastor Barry alluded to his predicament. "I have a client in the fraud-uncovering world that I live in," he said, "that I felt was just taken advantage of in a horrible way. And it was a big Goliath-type public company and he was the David ... I put my whole heart into it ... and after a year and a half" -- long pause -- "he lost everything. He lost the case."

But Minkow's sermon was not about accepting failure. It was about bouncing back from it. "Remember all the Rocky movies," he told the congregation. "I liked Rocky V the best." He recounted the moment when Tommy Gunn is savaging Rocky in the ring, and Rocky falls backward in slo-mo and all seems lost. But then Rocky has a flashback to what his deceased trainer Mickey -- the Burgess Meredith character -- would have told him. "Dum dede dum dede dum dum dum. And [Rocky] gets up, and he wipes the floor with Tommy Gunn. All because Mickey said, 'Get up ya bum, because Mickey loves ya' ... When you're down, I want you to hear that music. Dum dede dum dede dum dum dum. I want you to think Jesus is saying, 'Get up ya bum, because Jesus loves ya.' " The congregation erupted in applause.

In August, Minkow testified at a hearing on whether he had committed litigation misconduct, as Petrocelli alleged. Though she didn't rule on the spot, Miami judge Gill Freeman commented from the bench, "Mr. Minkow ... will lie, plain and simple. He seems to have absolutely no sense of responsibility for telling the truth."

In September the church elders discovered that the church's income was running below projections by $28,000 per month. It would have to surrender office space and lay off staff. They also learned -- in part due to evidence emerging from the Lennar case -- that Minkow was commingling funds, that he had concealed certain debts from the board, and that he had opened checking accounts in the church's name that the elders hadn't known about. Nevertheless, according to board minutes, the elders concluded that Minkow's "giving exceeded what was reimbursed to him," and retained confidence in him.

In November, Minkow went back to Linda, the retired grandmother. He was now selling his FedEx routes, he explained, and would be buying a gas station instead, and he'd give her a stake in that. To be known as GreenCo, the station would have an environmentalist angle. "People could pay I forget how much more for gas to get their carbon imprinting," Linda says. "It would be the first company of its kind. It was going to be big."

Minkow showed her a photocopy of what purported to be an e-mail from Minkow's accountant at Marcum, an accounting firm, instructing Linda to write Minkow a check for $22,500, which he'd pay back later. This "confusing" transaction, the accountant explained, would protect Linda from adverse tax ramifications from her investment in the gas station. She did as requested. (Linda faxed me the purported accountant's e-mail, which I forwarded to Marcum. A Marcum spokesperson says the e-mail could not possibly have originated from Marcum's servers, as their employees use "@marcumllp.com" addresses, while the one shown to Linda purports to have been sent from an "@marcumllp.net" address. Minkow responds, "If the e-mail to [Linda] is somehow inaccurate, it is in the hands of the FBI ... and I have no clue.")

December brought crisis. First, Minkow learned that he was under federal criminal investigation. Then one of his civil law firms sued him for nonpayment of $34,000 in fees. Finally, two days after Christmas, Judge Freeman ruled on Petrocelli's sanctions motion. She found that Minkow had "withheld key documents," "destroyed or discarded important evidence," "concealed the identity of material witnesses," "willfully violated court orders," "engaged in actions to cloud his misconduct," and "intentionally misrepresented" matters to his own lawyers, to Lennar, and to the judge herself. She ordered the stiffest possible sanction: default. In other words, the only issue left in the case was how much Minkow would owe Lennar in damages. (Lennar wanted $583 million plus attorneys' fees.)

Minkow's GreenCo gas station ("Feeling good about fueling") launched in January 2011. Its manager, Robert Warner, soon noticed something odd. The security camera showed that Minkow was coming in twice a day to clean out the safe.

GreenCo's main gasoline supplier, Eric Dransfield, also noticed puzzling conduct. First Minkow asked to pay him via PayPal. Then, once he set up an account, he began receiving payments from Minkow, Minkow's wife, Minkow's secretary, and, yes, the grandmother I've been calling Linda.

Minkow had asked Linda to set up a PayPal account linked to her Discover card, she explained to me, to which Minkow's secretary would have access. This was, again, supposed to be for tax purposes, she says. Minkow put $21,000 in gasoline charges on her card, she says.

In late January there was a burglary at Minkow's church -- never solved -- in which $50,000 was stolen from the donation box. In conversations with me, Minkow denied any involvement, emphasizing that, as he would have known, the box contained only a couple thousand in cash, that the rest consisted of checks on which congregants were easily able to stop payment, and that the church had no insurance for burglary, so he had "no motive."

In March, after a series of Minkow's payments bounced, Dransfield says, Minkow owed him $47,000. He went to Minkow's home.

Minkow appeared to have just given himself an injection to relieve migraines, according to Dransfield, who remembers seeing the needle and the mark it had left on Minkow's forehead. (Minkow does have a medical history of severe migraines.) He was "walking in a dazed state" with "his belt undone," Dransfield recalls. Minkow admitted owing Dransfield the money and signed over to Dransfield all his rights to GreenCo.

But Minkow never had authority to convey anything he was purporting to convey. GreenCo's lease had never been in Minkow's name in the first place.

A day or two later, on March 16, the church elder board issued a press release announcing that Minkow had resigned the day before and would be pleading guilty to "one criminal count." The board said it was "saddened," that it appreciated "his 14 years of faithful service," and that it would "make no further statements regarding these matters."

By then, Minkow had left town and, by April, he and his family were living in Tennessee.

Minkow's guilty plea was inked on March 22, his 45th birthday. In it Minkow acknowledged having conspired to "artificially depress" Lennar's stock price in order to assist "Conspirator A," who was employing "extortionate means" to induce Lennar to pay him a sum of money. Minkow admitted making "numerous false and misleading statements" on his websites, and "adopting Conspirator A's false assertions with reckless disregard for their truth." He also admitted that he "abused his relationship" with federal law enforcement to get nonpublic information and trade on it.

"We appreciate the good work of the Justice Department in protecting our public securities market," says Lennar CEO Stuart Miller.

Marsch hasn't been charged with any crime. "This case is still open," says a Miami FBI spokesperson. "Therefore, we cannot comment at this time." He also declined to say whether any FBI agents had been punished for sharing confidential information with Minkow.

In my conversations with Minkow, he more than once told me of a joke he recalls his criminal defense lawyer making that, he believed, provided an apt summary of the lessons we should take away from his "relapse." In a sense, I agree.

"We were at this very high-tension meeting, where I'm not allowed to talk," Minkow recounted. He and his lawyers were meeting with federal prosecutor Ryan O'Quinn. Minkow's lead lawyer, Don Re, was participating by phone, while Minkow attorney Alvin Entin was present in person.

According to Minkow, the prosecutor said, " 'Mr. Re, you should be proud of your client. In the ZZZZ Best thing he was running the deal -- he was the head guy. Now he's just a small player. He's getting better.'"

In response, according to Minkow, Re quipped, " 'That's how I know he's innocent. Because if this were a fraud, Barry would be running things.' " Everyone laughed, as Minkow remembers it.

Re did not return calls and e-mails seeking confirmation of his joke. Prosecutor O'Quinn, now in private practice, said he has no memory of such an exchange. "Given the role that Mr. Minkow admitted to playing in his attack on Lennar," he wrote in an e-mail, "I doubt anyone would have called him a small player. I certainly do not remember anyone saying that."

Entin, Minkow's longtime friend and lawyer, also could not confirm the story. "That one I don't recall at all," he said.