(FORTUNE Small Business) – Simon Cowell, the vituperative judge of American Idol, has nothing on Tom Peters. Via his blockbuster business books--starting with In Search of Excellence, which he co-authored with Robert Waterman in 1982--Peters became the business world's first starmaker. Among the entrepreneurial role models he catapulted into bigtime fame: Stew Leonard, whose store he first wrote up in 1985's A Passion for Excellence, co- authored with Nancy K. Austin. The country's top-selling business author, now 60, commands $80,000 a pop on the speaking circuit. FSB writer-reporter Andrew Rafalaf recently asked Peters to discuss his feelings regarding the entrepreneur he once lauded as excellent.

Can Stew Leonard's still be a model of corporate management?

There's no question that Stew Leonard's is a hell of a model for customer service. Long before experience marketing was pushed by the Nikes of the world, Stew Leonard's was doing it, but to me the essence of a brand is its integrity. I thought in the deepest sense Stew Leonard's was revealed as phony. They were selling charm as much as the big rock out front that says THE CUSTOMER IS ALWAYS FIRST. The big rock is hollow.

So what's driving Stew Leonard's success if it isn't customer service?

It is customer service in a technical sense, and I don't deny that for a minute. It's just that I felt personally let down by Stew. I said to many people that I don't have a problem with criminals; they have rights too. But what I didn't like was Leonard traipsing around Mr. Reagan's White House picking up awards. I didn't like the hypocrisy. If you're a street kid in New York and you're going to hold me up--as long as you don't hurt me--I'm not going to hold it against you because you weren't preaching in the Crystal Cathedral the week before. You were honest to your trade.

Are the company's down-home values completely undermined by Stew's improprieties?

As you know, Stew wasn't exactly the end of it. It smelled pretty bad, and it smelled pretty deeply bad.

You don't think Stew's tax-evasion scheme was an aberration? You think it somehow underlies everything Stew Leonard's does?

Look--when you steal seven million bucks, it ain't random. When he went down, it was the biggest federal computer-based fraud conviction at that time.

Stew Sr. says his conviction benefited the business because it gave his son unfettered control. Can you see a valuable management lesson here for family-run businesses?

The kernel of the idea is fine, but it's not likely something I'll put in my next book. Only a fool would deny there isn't a kernel of truth in it, but it's not exactly the conventional way to do it.

Does it surprise you that the business has done so well?

With our short American attention spans, I'm not surprised. It's sad to say, that kind of extraordinary customer service remains as rare today as when we started writing about it in 1983. So in that dimension it doesn't surprise me. The milk is fresh, the strawberries are great, the people still smile at the checkout. They still run a good show.

Is it a good idea for executives to attend Stew University?

I wouldn't go, and I wouldn't send anyone in my company. Is it an awful thing to do? Of course not. At a time when we're reconsidering the integrity of corporate values, it's vaguely oxymoronic to learn customer service lessons from a company whose founder spent four years in the can. To me, it's Crook U.