Water park developer Jeff Wirth pleaded not guilty to tax fraud charges in federal court Friday, with a lawyer finally at his side.
Wirth's arraignment had been postponed twice because he hadn't yet hired an attorney. But this time, Chris Madel, a prominent Minneapolis criminal defense lawyer who was advising Wirth prior to the indictment, showed up with him.
An Oct. 24 trial before U.S. District Judge Ann Montgomery has tentatively been set.
Wirth, of Plymouth, is head of the Wirth Cos., a real estate company in Brooklyn Center. He was indicted Aug. 18 on charges of conspiracy to defraud the Internal Revenue Service and of filing false tax returns in a scheme that ran from at least 2003 to 2010.
The tax fraud case is one of the larger ones handled by the U.S. attorney's office. Prosecutors allege that Wirth, his former wife, Holly Damiani, and their tax preparer cost the Internal Revenue Service millions of dollars in losses.
Wirth developed the Water Park of America in Bloomington and the Grand Rios Hotel and Water Park in Brooklyn Park, and spent millions of dollars turning the old Minneapolis Athletic Club into the luxury Grand Hotel Minneapolis.
On Friday, Madel told U.S. Magistrate Judge Jeffrey Keyes that he assumed he doesn't have to produce any more documents in response to outstanding grand jury subpoenas. The subpoenas suggest federal prosecutors could still be pursuing additional charges, or targeting other people.
Bill Otteson, the assistant U.S. attorney prosecuting the case, told the judge he wasn't permitted to discuss grand jury matters in court.
In an interview after the hearing, Madel said there "were a number of subpoenas served on Wirth-related entities." He said he doesn't know how many, but that they were served some time ago, around 2009 and 2010, and that they remain valid. He said there's no time limit on subpoenas.
"We've just begun to fight and we're going to fight like hell," Madel said.
Wirth's former wife and their tax preparer Michael Murry were also indicted Aug. 18 in the alleged tax fraud scheme. They both pleaded not guilty in federal court on Tuesday, with trials set for Oct. 24.
Prosecutors accuse Wirth and Damiani of manipulating their personal and business finances to lower their tax bills by, among other things, making up management fees, classifying vacations as business expenses and under-reporting their salaries.
They also allegedly diverted several million dollars of company money to develop an unfinished mansion they were building on Lake Minnetonka, without claiming the money as either business or personal income. The villa is up for sale.
Jennifer Bjorhus • 612-673-4683
