Evan M. Flaxman was charged in federal court with one count of mail fraud in connection with an alleged $7.5 million fraud that included a Minneapolis physician as a victim.
Minneapolis doctor is called one victim of $7 million scam
- Article by: Dan Browning
- Star Tribune
- June 15, 2012 - 9:57 PM
A Minneapolis radiologist and the son of his colleague entrusted nearly $7.5 million to Evan Flaxman. He befriended them several years ago and promised to manage their money in conservative investments. Instead, he bought exotic cars, jewelry and other luxury items, according to federal prosecutors.
Court documents describe a bizarre investment scheme in which Flaxman claimed to be a multi-millionaire commodities trader and a partner in a Swiss hedge fund, but actually just helped himself to the cash of his wealthy friends.
Flaxman, 35, of Silverthorne, Colo., was charged Thursday in Minneapolis with one count of mail fraud and faces up to 20 years in prison if convicted. He was charged by way of a “felony information” rather than a grand jury indictment, which indicates that a plea agreement is in the works. He could not be reached for comment.
Flaxman lives with his mother in a mansion about 70 miles west of Denver in the Rocky Mountains.
Dr. Stephen E. Barron, a St. Louis Park orthopedic surgeon, has a home nearby and his son, Eric, 32, had become close friends with Flaxman.
Through the Barrons, Dr. William J. Ford III, a diagnostic radiologist from Minneapolis, met Flaxman during a trip to Colorado in 2008, according to court documents, which identified the alleged victims by their initials only.
U.S. Postal Inspector Mary Agnew outlined the investigation in affidavits filed to obtain search warrants. She said Flaxman told Ford, 56, that he reminded him of his late father. Flaxman said his father had been cheated on his investments and offered to manage Ford’s money so that nothing similar would happen to him.
He claimed to have a partner named Nicholas Saskowitz who ran a successful hedge fund in Switzerland, but investigators say that appears to be a total fiction. Ford gradually turned over $6.959 million to Flaxman, who assured him the money was “un-losable,” court records say.
Eric Barron invested $500,000 that he had collected in life insurance proceeds after the death of his brother in a whitewater kayaking accident in 2008. Investigators say Flaxman offered to manage the money in 2011 and told Barron that he could live off the interest. He referred to himself as the “Bank of Flaxman” and offered to guarantee the safety of the investment with his personal wealth.
Ford did not respond to messages seeking comment. Stephen and Eric Barron declined to comment.
According to federal search warrant and forfeiture filings in Minneapolis, the alleged fraud began to unravel late last summer after Flaxman returned from his honeymoon.
The mysterious 'Vladimir’
He told Ford that he found a new hedge fund client named “Vladimir” who was a former KGB agent and a member of the Russian mafia. Flaxman described him as the scariest person he had ever met and said that “if anyone were to ever cross Vladimir, you would pay with your life.”
Flaxman claimed that Vladimir had hundreds of millions of dollars in the hedge fund and said they were making huge profits on oil trades, the court papers say.
Ford grew suspicious and began trying to withdraw his money last fall. Flaxman allegedly claimed he’d been betrayed by Saskowitz. He wrote an e-mail to Ford Nov. 18 saying his “worst fears were confirmed,” and that he was leaving to decide how to move on with his life. Ford, in a panic, repeatedly e-mailed and phoned Flaxman over the next few days. Flaxman responded with an e-mail on Nov. 19 in which he called him a “leech” and told him to get over it. “Leave me ... alone or I can happily introduce you to Vladimir,” he wrote.
Flaxman, a race car driver, skier and tennis player, grew up in Hollywood, Fla., where his late father, Jeff Flaxman, owned a medical supply company. Evan Flaxman graduated from law school but has never been admitted to any bar association. He worked in the real estate industry in Montana, where his father had owned a large ranch. The ranch was sold in 2005 after his father died. Evan and his mother, Phyllis Flaxman, moved to Colorado.
Evan Flaxman spent lavishly on cars, according to court records. He paid $698,546 for a Ferrari last year and $582,244 for two Ferraris in 2010. He also bought a Porsche 911 GT3 Cup race car, a 2009 Mercedes, a 2010 Land Rover and a Bentley Silver Spur. He bought fine furniture and jewelry, including a $20,223 Rolex watch.
Court records indicate that he also used investor money to pay $104,279 in income taxes.
“He was spending money like a drunken sailor,” said a Colorado neighbor, Don Ferguson. “His behavior is unbelievable. He did a bunch of road repairs in 2009 and … when we didn’t pay what he thought was our share, he started plowing our driveway shut!” Ferguson said.
Federal authorities are seeking to forfeit $5.9 million seized from various investment and bank accounts controlled by Evan and Phyllis Flaxman, as well their home in Silverthorne and a number of vehicles. Phyllis Flaxman could not be reached for comment.
Dan Browning • 612-673-4493
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