Krzyzaniak’s Luxury Lifestyle Funded by Investors
Earlier this year, Michael Krzyzaniak was indicted for orchestrating four investment scams that together bilked at least $20 million from investors. Recently unsealed search warrants reveal that the money was used to fund Krzyzaniak's lifestyle, according to the Star Tribune.
The Minneapolis newspaper cited search warrants that were unsealed on Tuesday. Those warrants, which were not available electronically, reportedly allowed agents to search Krzyzaniak's computer, iPhone, and scanner, and to seize $4,409.61, the proceeds from a recent estate sale.
According to sworn statements by U.S. Postal Inspector Robert Strande that were obtained by the Star Tribune, Krzyzaniak sent an e-mail to an investor in 2006, saying that his golf course development in Desert Hot Springs, California was in serious financial trouble and he would have to shut down the project unless he got more cash.
The investor reportedly doled out $2.05 million to Krzyzaniak, who in turn used the money to buy a home in Wayzata, not to fund the golf course development.
According to the federal indictment, Krzyzaniak-who's also known as Michael Joseph Crosby-convinced investors to put money into business projects that turned out to be fraudulent.
In addition to the golf course development in Desert Hot Springs, Krzyzaniak told investors that their money was being invested in Internet terminals at airports; golf courses in various states; alternative energy projects in Hartsel Springs, Colorado; and a Nascar-type race track in Elko.
But instead, the government says that Krzyzaniak spent large portions of the investment funds to pay for personal expenses, fund his lavish lifestyle, and distribute “lulling” payments to investors.
In some instances, he invested funds, but only as an effort to prevent his fraud from being discovered-and he spent more than $6.1 million of investors' money on himself.
Krzyzaniak faces 14 counts of mail fraud, six counts of wire fraud, three counts of money laundering, three counts of income tax evasion, and four counts of failure to file income taxes. If convicted, Krzyzaniak faces a maximum penalty of 20 years in prison for each count of mail and wire fraud, 10 years for each count of money laundering, five years for each count of tax evasion, and one year for each count of failure to file income taxes.
Click here to read more about the case in the Star Tribune.