Forum News Service, Published April 05 2013
Authorities arrest two men who went missing from Duluth prison campAuthorities have apprehended two men who went missing from the Duluth Federal Prison Camp late Saturday.
The U.S. Marshals Service Northstar Fugitive Task Force arrested Gerald James Greenfield and Michael Joseph Krzyzaniak at about 1 a.m. today at a hotel in Burnsville, Minn., according to a news release. Tips led authorities to the hotel, where the two men were located. They were arrested without incident on federal warrants for escape from custody, and booked into the Ramsey County Jail pending an initial appearance in U.S. District Court.
Greenfield and Krzyzaniak, who were in the prison camp after being convicted of defrauding investors of millions of dollars, were discovered missing at about 10 p.m. Saturday from the minimum-security camp near the Duluth International Airport, according to officials from the Federal Bureau of Prisons.
Krzyzaniak, 64, from Minneapolis, and Greenfield, 67, from Bloomington, Minn., were discovered missing during an evening headcount. Krzyzaniak and Greenfield were not considered armed, dangerous or violent, prison officials said.
Krzyzaniak was sentenced to 151 months in prison on one count of wire fraud and one count of income tax evasion in February 2012. His projected release date was April 12, 2022.
In his June 28, 2011, plea agreement, Krzyzaniak, also known as Michael Joseph Crosby, admitted that from 2003 through January 2011, he conducted a scheme to defraud individuals by convincing them to invest money in prospective business projects he claimed to be developing, including Internet terminals at airports; golf courses in various states; a golf club resort in California; alternative energy projects in Colorado; and a NASCAR-type race track in Elko, Minn.
In total, investors provided Krzyzaniak with between $20 million and $50 million for investment, which he used to pay for personal expenses and to distribute lulling payments. In addition, Krzyzaniak admitted that between 2004 and 2007, he failed to file federal income tax returns or pay income taxes.
The 2011 conviction was not Krzyzaniak’s first. In 1993, he pleaded guilty to mail fraud in Minnesota in connection to another investment scheme but fled before the case was resolved. He ultimately was apprehended in Florida and sentenced to 72 months in prison.
At the 2012 sentencing, Chief Judge Michael J. Davis called Krzyzaniak a “sociopath or something close to it.”
Greenfield was sentenced to 50 months in prison on one count of conspiracy to commit money laundering in January 2012. His projected release date was Nov. 2, 2015.
Greenfield and another man were indicted in February 2010 in a $2.5-million mortgage fraud scheme that involved the sale of condominiums in downtown Minneapolis. Greenfield pleaded guilty on May 3, 2010.
In his plea agreement, Greenfield admitted that beginning in September 2006, he conspired with others to launder proceeds of a mortgage fraud scheme Brett A. Thielen was executing. According to the Justice Department, Thielen sold condos during a market downturn by recruiting financially unqualified buyers and fraudulently inducing mortgage lenders to lend those buyers money. To further the scheme, the condo prices were artificially inflated, creating substantial profits that Thielen needed to hide.
Greenfield admitted helping hide those profits by wiring them to an unindicted Australian attorney, who wired portions of those profits to other places to make it appear as if they came from legitimate sources.
Thielen was sentenced in December 2010 to 27 months in prison. Bureau of Prison records show that he was released in January.
In addition to sentencing Greenfield to prison, a federal judge fined him $10,000 and ordered him to forfeit hundreds of thousands of dollars of assets.