Landscaper helped execs trim taxes

A landscaper for several top executives in the Twin Cities is planning to plead guilty in federal court next week to a charge that he helped certain clients avoid taxes by providing invoices that let them charge work done on their homes to business accounts.

Luther Hochradel, 60, the former owner of Windsor Companies in Maplewood, was charged in late February that he had knowledge of felonies being committed. The alleged scheme has also ensnared two former executives at Kraus-Anderson Companies, one of the oldest and largest general contractors in the Twin Cities.

Hochradel has also done work for William McGuire, the former CEO of UnitedHealth Group Inc. and a significant donor to the Guthrie Theater. McGuire left UnitedHealth in 2006, following an investigation into the backdating of stock options.

According to a sworn affidavit by Mary Agnew, a special agent with the U.S. Postal Inspection Service, a Windsor employee said that McGuire paid only half the going rate for landscaping work done for him, and that he helped Windsor Companies get a landscaping contract for the park adjacent to the new Guthrie Theater in downtown Minneapolis. Gold Medal Park was funded by the McGuire Family Foundation.

McGuire's lawyers, Steven Gaskins of Minneapolis and David Brodsky of New York, said Friday that their client did nothing improper. They said that McGuire had a "cost-plus-20-percent" contract with Hochradel for his personal landscaping.

Hochradel suspended the 20 percent markup for a time, because McGuire had cosigned a bank note for him; the markup resumed after the note was repaid, Gaskins said.

Windsor did get a landscaping contract for Gold Medal Park "by doing a bid with Kraus-Anderson," the general contractor, Gaskins said.

Rogosheske said that, besides Hochradel, "a couple of guys from Kraus-Anderson" are the only people expected to be charged in connection with the investigation.

Hochradel, who sold Windsor to Chaska-based LAC Enterprises, is cooperating with authorities.

According to Agnew's affidavit, Hochradel's company did work for former Kraus-Anderson Vice President Gary Hook and for Scott Crawford, a former project manager in the company's Circle Pines office.

Windsor employees said they printed invoices so that the work on Hook's and Crawford's homes could be billed to other Kraus-Anderson jobs, Agnew said.

Hook, 59, of Woodbury, and his attorney, Thomas Kelly, declined to comment. Crawford could not be reached for comment.

"We believe we acted appropriately to address those violations, but do not, as a matter of company policy, disclose personnel matters," Gerhardt said. "We do not have any indication that these violations affected or harmed any clients or customers of our company."

Gerhardt said that the bills for Hook's and Crawford's landscaping were "likely paid by Kraus-Anderson -- but they were not paid by our customers."

Investigators with the criminal division of the Internal Revenue Service tripped across Hochradel last summer, when they searched the home of William Sandison, an owner of Community National Bank who is under investigation in connection with the failed Ramsey Town Center project.

Investigators found two sets of Windsor's landscaping bills when they searched Sandison's house in June. The bills had the same invoice number on them, but different dates and amounts. One, for $17,883, described charges for work done for Sandison's son, the bank's president, and for "Landscaping at Bill's." While the other, for $14,700, described work done at Vadnais Heights Community National Bank.

Hochradel wrote a note to Sandison suggesting that he destroy the documents once he approved them.