Twin Cities Developer Jailed For $26 Million Fraud

Twin Cities Developer Jailed For $26 Million Fraud

Michael Joseph Krzyzaniak, 63, has been sentenced to 151 months in prison, the maximum allowed, for having scammed investors of $26 million. Krzyzaniak, a Twin Cities man was

Krzyzaniak fraud

Krzyzaniak fraud

sentenced in federal court in Minneapolis. He perpetrated this scam by claiming celebrity endorsement. One of the celebrities in question here was pro golfer Phil Mickelson.

Krzyzaniak proposed an 1800 acre resort in California and got investors to part with their money. The resort, dubbed Palmwood was designed to hold over 2000 homes, 2 golf courses and retail space. The project was to come up around 15 miles from Palm Springs. The project went to seed during the slump in housing and environmental concerns and a handful of businesses associated with Krzyzaniak (also known as Michael Crosby) filed for bankruptcy. The four companies are based in Burnsville and have claimed for bankruptcy citing assets of a mere $ 17 million and debts of a whopping $ 165 million.

Some big names form the creditors list for this project including Wells Fargo Bank, American Bank and Phil Mickelson Design. While Mickelson Design is owed $1.6 million, Jebco, a real estate financing company and another creditor is owed $6.9 million.

A small portion of the investor’s’ money did go into the project but more than $6 million went into the opulent lifestyle of Krzyzaniak. This lifestyle included a fancy Laguna Beach home and courtside seats at Timberwolves games. All of which was designed to woo investors or should one say victims, to the Palmwood project. He had other projects such as a solar project in Colorado and NASCAR style track in Twin Cities in the pipeline as well.

Krzyzaniak, Chief Managing Partner of Palmwood Golf Club came in for some harsh criticism during his sentencing. Michael Davis, the US District Chief Judge who sentenced Krzyzaniak stated he was close to being a sociopath. Even though Krzyzaniak stated that he was ashamed of standing in the orange suit of shame, his victims exhorted people to feel no pity for him since he had destroyed families. Robert Sicoli, defense attorney for Krzyzaniak claimed that he would die in prison because he had a heart condition.

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