A Golden Valley estate salesman has been ordered to pay fines and restitution of $2 million for selling off antiques and other family heirlooms but never giving his customers their money.
Craig Birkeland, 50, also was banned from the moving and estate sales business in Minnesota under the ruling issued this week by Hennepin County District Judge Philip Carruthers in a lawsuit brought by Minnesota Attorney General Lori Swanson
From Apple Valley to Arizona, customers claim Birkeland held estate sales for them, then pocketed the money. One, Linda Pegelow of Bloomington, is still waiting for $21,000 from an estate sale Birkeland held two years ago. And although the state's case is over, she's not done fighting, pushing for criminal charges and a change in state law.
"There's 62 people involved. It's not just that he's a bad businessman," she said. "He's no different from Denny Hecker or Tom Petters … and they're all in jail."
Birkeland didn't show up or have an attorney represent him in recent hearings. Messages left by the Star Tribune weren't returned Friday, and all numbers for his Golden Valley company, Conducted Estate Sales or Birkeland & Associates, have been disconnected.
Estate sales are growing in popularity as more retirees downsize. But companies don't have to be licensed in Minnesota, unlike auctioneers, leaving customers often grieving a family member's death or in transition with little recourse.
The bill to require estate sale companies to post a $20,000 bond didn't get a hearing last session but has now passed the House and is being considered by the Senate.
"This might be controversial," said Sen. Barb Goodwin, DFL-Columbia Heights, because critics don't want added business regulations."[But] it's imperative we protect the public."
Large sale, little check
For two decades, Birkeland ran a reputable estate sale business, gaining supporters like James Ingemunson of St. Paul.
Ingemunson, an antiques collector, hired Birkeland 15 years ago and had a positive experience, so he hired him again last year. He sent a moving truck full of what he estimated were nearly $60,000 worth of antique toys such as European wind up ships and old cars. Birkeland paid him only $5,000.
Such stories from him and other customers prompted Swanson to file a consumer fraud suit against Birkeland in February 2012. But Birkeland continued to have weekend estate sales. And with more business came more lawsuits.
One was Ingemunson's, and although he was awarded a judgment, he still hasn't been paid. "It's unfortunate," Ingemunson said. "I don't know what else I can do."
In Arizona, Mendota Heights retirees Gary and Suzanne Brungardt are still waiting for $6,000 in proceeds from Birkeland selling their belongings. In Florida, Minnetonka retirees Joyce and Larry Johnson got only $3,000 of the $10,000 they estimate Birkeland owes from selling their furniture and grand piano. And in the Twin Cities, Brad Bloedow of Apple Valley hasn't got a cent of the $23,000 Birkeland owes after an estate sale more than a year ago.
'If money's there, we'll get it'
Last October, the state tightened its oversight of the company, getting Birkeland to agree to let them monitor his accounts, financial paperwork and customer contracts before a July trial. Birkeland violated the order and failed to appear in court, according to the default judgment. In this week's court order, Birkeland was ordered to pay the attorney general's office $2 million by May 8. That includes a $1.4 million fine for violating consumer protection laws and about $588,000 in restitution to the 62 customers.
"Realistically, it can be extremely difficult to collect with these types of cases," said Ben Wogsland, spokesman for Swanson's office. "We'll pursue the money, and if it's there, we'll get it."
In Bloomington, Pegelow isn't holding her breath. She doesn't expect to ever see the $21,000 Birkeland owes for selling her late cousin's estate in 2010. That money was supposed to help Pegelow support her cousin's 92-year-old mother. Instead, Pegelow is on her own and fighting for the state law to make sure their story isn't repeated.
"It's kind of devastating," she said. "You hire somebody in good faith. Somewhere in there, it became fraud."