2 multimillion-dollar fraudsters escape from federal prison near Duluth

  • Article by: PAUL WALSH , Star Tribune
  • Updated: April 5, 2013 - 9:48 AM

The two men escaped from a minimum-security federal facility over the weekend.

Gerald Greenfield, Michael Krzyzaniak
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Gerald Greenfield, left, and Michael Krzyzaniak

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Michael Krzyzaniak, 64, and Gerald Greenfield, 67, were discovered missing from the facility about 10 p.m. Saturday during a “regularly scheduled prisoner count,” said U.S. Marshals Service spokesman Thomas Volk. The pair were last seen at a 5 p.m. head count, he said.

Krzyzaniak, of Minneapolis, has nine years to serve of a more than 12-year term for bilking investors out of nearly $26 million. He pleaded guilty in 2011 to wire fraud and tax evasion.

Greenfield, of Bloomington, has a projected release date of Nov. 2, 2015, from his more than four-year sentence for conspiracy to commit money laundering. He helped a developer of the Sexton Lofts in downtown Minneapolis run a $2.5 million mortgage fraud scheme and hid the profits by wiring money to an attorney in Australia.

Inmates at the 30-year-old all-male camp, on the former Duluth Air Force Base and located about 7 miles north of the city, are “pretty much there on the honor system,” as opposed to a high-security setting with locked cells, Volk said. He didn’t know if the pair had to elude guards or the prison layout.

“There aren’t even any walls,” said Volk, whose description was confirmed by Duluth prison spokesman David Baker.

The federal Bureau of Prisons is “extremely good at figuring out who should go where,” Volk said. “Generally, they don’t put someone at a prison camp who fits the profile of walking away.”

“We don’t have [escapes] very often at all,” said Baker, who said he can recall none in his 13 years at this post.

Baker added that prison personnel “found them missing at the same time, but whether they took off together, I have no information about that at all.”

Authorities didn’t know or wouldn’t say if the pair had become friends or had any resources or friends with money outside the prison.

In addition to prison time, Greenfield was fined $10,000 and ordered to forfeit assets valued at “hundreds of thousands of dollars.”

Krzyzaniak, on the other hand, appears to have spent most of the millions he took from investors, including golf pro Phil Mickelson. At his initial court appearance in April 2011, he said he owned no stocks and bonds, had only a few hundred dollars in the bank and drove a 2004 Silverado truck with a loan against it. After his arrest, prosecutors seized just over $4,000, the proceeds from an estate sale in which Krzyzaniak sold items from his former Minnetrista home.

Krzyzaniak’s attorney, Robert Sicoli, said Sunday afternoon he was surprised his client bolted and added that he hasn’t spoken to him since sentencing in 2012.

“In my 26 years, he is the first client who ever walked away” from the Duluth prison, Sicoli said. “I never considered him at risk of fleeing.”

The Duluth camp offers a gym, food service that includes a salad bar and a movie theater. Sleeping quarters resemble a college dorm.

Its most notable inmate of late was auto mogul Denny Hecker, who started his prison time in 2011 at the Duluth facility only to be shuttled to many other federal prisons since.

Joseph Krzyzaniak said late Sunday morning that he was unaware that his son had escaped. The father, who lives in Richfield, said his son called him in the past day or two and “he seemed to be fine ... I’m speechless.”

A three-hour visit two weeks ago was uneventful, Joseph Krzyzaniak said, adding, “He wasn’t complaining about anything.”

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Gerald Greenfield, Michael Krzyzaniak