Holly Damiani entered her plea on tax evasion charges. Jeffrey Wirth and their tax preparer face trial May 29.
The ex-wife of commercial real estate developer Jeffrey Wirth pleaded guilty on Thursday to filing a false federal tax return in an alleged tax evasion scheme that funded a lavish lifestyle.
In a plea agreement reached in U.S. District Court-Minneapolis, Holly Claire Damiani, of Minneapolis, admitted that from "at least" 2003 through October 2006, she conspired with Wirth and their tax return preparer Michael James Murry to defraud the Internal Revenue Service by failing to report and pay their true income and tax obligations.
The 53-year-old Damiani calmly answered a series of questions posed to her by District Judge Ann Montgomery in a hearing that lasted about 35 minutes.
Married to Wirth from 1980 to 2008, Damiani said at the hearing that the duo used his company and other related businesses to fund a lavish lifestyle that included the $2 million purchase of an island in St. Alban's Bay in Lake Minnetonka, and $3 million more to design and construct a mansion there. Damiani also said they plied more than $600,000 into a home near Cedar Lake in Minneapolis, and traveled the world, paid for cars and even dry cleaning -- all on the companies' dime.
Wirth, of Plymouth and head of the Wirth Companies, a real estate company in Brooklyn Center, is best known locally as the developer of the Grand Lodge Hotel & Waterpark in Bloomington and the Grand Rios Hotel and Water Park in Brooklyn Park. He also spent an estimated $54 million turning the old Minneapolis Athletic Club into the luxury Grand Hotel Minneapolis.
Damiani, who has an accounting degree from the University of Minnesota, was an executive at Wirth Companies from 1988 to 2006.
According to Damiani, she and Wirth often recorded personal expenses as business expenses in an effort to understate the company's true income for tax purposes. From 2002 through 2005, they each claimed that they earned only $12,000 a year in wages on their federal tax forms.
Damiani faces a maximum penalty of three years in federal prison. Montgomery will determine her sentence at a future hearing.
In indictments handed down last August, Wirth and Murry each face one count of conspiracy to defraud the United States. Wirth was charged with an additional two counts of filing a false individual tax return and two counts of filing a false corporate tax return.
Murry was charged with two counts of preparing a false corporate tax return and two counts of preparing a false individual tax return.
A jury trial of Wirth and Murry is scheduled for May 29. Damiani has been "assisting" the government in its investigation of her ex-husband and Murry, according to her attorney Andrew Luger of Minneapolis. She may be called as a witness in the trial, he said.
Damiani, through her attorney, declined to comment Thursday.
Janet Moore • 612-673-7752