Federal agents in Minnesota continue to look for two scam artists who apparently walked away from the minimum-security federal prison camp in Duluth on Saturday. Beyond that, they're not saying much.
It’s not a pleasant subject. It’s the second time that one of the two men has fled from justice.
Michael Krzyzaniak, 64, skipped town in 1988 as he faced trial in connection with a bogus scheme to sell $550,000 worth of American veteran commemorative medallions. He was arrested seven months later while walking his dog in West Palm Beach, Fla., where he was setting up another telemarketing operation.
In the meantime, Krzyzaniak had been tried and convicted in absentia on 25 counts. The U.S. Supreme Court reversed the verdict on a technicality in 1993. He eventually pleaded guilty in a plea bargain and was sentenced to six years in prison. His latest stint in custody began a year ago when he reported to Duluth for a 12-year term for bilking investors out of $26.3 million and evading income taxes.
The Duluth prison camp lacks a fence and operates on the honor system. It was rated by Forbes magazine a few years ago as one of the top dozen places to do federal time.
The camp has a gym, a theater, a recreational center and a “hobbycraft area,” where inmates can participate in ceramics, drawing and leathercraft activities. A spokesman said about 840 male inmates live in dormitory-style buildings near the Duluth airport.
Stan Gotlieb was an inmate there in the early 1980s. “Anybody can walk out at any time,” he wrote in an online memoir. Gotlieb wrote that half of those who left while he was there walked back in voluntarily, “usually coming from a [forbidden] trip to the local liquor store or a clandestine conjugal visit at a nearby motel. As one warden put it, prisoners in Duluth have themselves for a guard. If they stay, it’s because they would rather stay than end up in a prison with walls.”
Krzyzaniak apparently left between the regular 5 p.m. and 10 p.m. head counts on Saturday, along with convicted money launderer Gerald Greenfield, 64, of Bloomington.
Krzyzaniak’s attorney, Robert Sicoli, declined to comment Monday. But at the sentencing hearing, he said he feared that his client wouldn’t survive prison. Krzyzaniak suffered a heart attack in jail and had three clogged arteries that can’t be operated on, Sicoli told the judge.
Minneapolis attorney Paul Engh said he was surprised to learn that the Bureau of Prisons authorized Krzyzaniak to stay in the prison camp. Engh had represented one of his co-defendants in the 1988 coin fraud case. “This guy, when he was arrested on the case I had with him, had like 10 different IDs. So he’s a master of disguise and would have no trouble traveling,” Engh said. “He’s in Mexico.”
Greenfield 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 friend in Australia. He has a projected release date of Nov. 2, 2015. At his sentencing, assistant U.S. Attorney David MacLaughlin said that although Greenfield has a pharmacy degree, he’s been a bookmaker for most of his life and ran a sophisticated money-laundering operation.
“He is right, I am absolutely sophisticated,” Greenfield replied. “I did international business all over the world for 25 years, involved in many, many different transactions.” Greenfield said he also had worked as an auto dealer and sold more than 25 million cars.
But he’s not most notable car dealer who’s called the prison camp home. That title goes to former inmate Denny Hecker, who started his prison time in 2011 there, only to be shuttled to many other prisons since.
It’s unclear whether Greenfield or Krzyzaniak have any assets to draw on as fugitives. Greenfield’s attorney, Ron Meshbesher, had little to say Monday. “I’m as surprised as anybody,” he said. “I have not spoken with him since he’s been there.”
Krzyzaniak appeared to have spent most of the millions he took from investors, including golf pro Phil Mickelson. At Krzyzaniak’s 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.
Krzyzaniak is white, 6 feet tall and 200 pounds, with graying brown hair and hazel eyes. Greenfield is white, 5 feet 9 inches tall, 150 pounds, with graying blond hair and blue eyes.
Anyone with information is encouraged to contact the U.S. Marshals Service at 1-218-720-3214 or call 911.