Michael Krzyzaniak Leaves Prison of Gym, Movie Theatre and Salad Bar
DESERT HOT SPRINGS, CA – He’s was sentenced to jail for his part in an environmentally damaging Desert Hot Springs development scheme that bilked investors out of nearly $26 million. He’s out of jail now but he did not serve out his sentence. He escaped.
His name is Michael Crosby. Or at least that’s the name he used in Desert Hot Springs. His real name is Michael Krzyzaniak, age 64, fraudster as the Minneapolis Star Tribune newspaper called him when it reported this week Krzyzaniak had escaped a minimum security prison in Duluth, MN.
In 2007 Krzyzaniak blew into Desert Hot Springs and immediately wooed members of the Desert Hot Springs city council, convincing city leaders to help promote a real estate deal that Krzyzaniak said would be a world class destination to put Desert Hot Springs on the map.
Krzyzaniak quickly became the favorite developer of then Councilwoman Yvonne Parks. His talk of putting Desert Hot Springs on the map led Yvonne Parks to take Krzyzaniak’s side in a legal dispute that ended up pitting the city of Desert Hot Springs against almost everyone.
In 2011, Crosby pleaded guilty to wire fraud and tax evasion and was sentenced to 12 years in prison for bilking investors out of nearly $26 million. It was only then the city council learned Crosby’s name was not really Michael Crosby, it was Michael Krzyaniak.
Krzyzaniak, of Minneapolis, has another nine years to serve out of his sentence.
Few Escape Summer-Camp
However, the Minneapolis Star Tribune reports that on Saturday, March 30, the multimillion-dollar fraudster fled a minimum-security federal prison camp near Duluth, Minnesota.
Krzyzaniak, along with another inmate, Gerald Greenfield, 67, were discovered missing from the facility at about 10 p.m. Saturday during a “regularly scheduled prisoner count,” said U.S. Marshal Service spokesman Thomas Volk.
“There aren’t even any walls,” said Volk of the 30-year-old all-male camp, on the former Duluth Air Force Base and located about 7 miles north of the city, explaining inmates are “pretty much there on the honor system,” as opposed to a high-security setting with locked cells.
The Duluth camp offers a gym, movie theater, private sleeping quarters resembling a college dorm room and food service that includes a salad bar. Fresh hot cinnamon rolls are served at breakfast. Escapes are few with prison officials unable to recall any in the last 13 years.
Federal officials refused to speculate if the convicts might be headed to Desert Hot Springs where the scheme cost the public and investors millions of dollars.
Yvonne Parks’ Connection
It was Yvonne Parks who introduced Michael Crosby to the city. Yvonne Parks used Crosby’s Ponzi scheme as justification for the city to fight the nature preserve known as MSHCP. That fight ending up costing the county of Riverside and Coachella Valley cities over a million dollars, only to have Michael Crosby unmasked as Michael Kryzinaik and discovering his world class development was never anything more than a Ponzi scheme.
The 1,766 acre “mega resort” was enthusiastically promoted by council member Yvonne Parks as the “future of the city of Desert Hot Springs.” Desert Hot Spring was dragged into the suit when the city rushed the EIR and approval process in a joint planning commission and city council meeting on December 23, 2006, a meeting that required city staff to work overtime to draft project approvals, working into the scheduled Christmas. The con-man was previously convicted of fraud in 1993.
A Familiar Story
Promoting projects that never happen is a familiar story in Desert Hot Springs. In recent years city officials invested public funds in a music festival that never happened, a community center (via Jewish Temple) that never happened, the Brian Bescoby Flamingo Hotel remodeling project that never happened, and another residential development billed exactly as Palmwood named Tuscan Hills that remains as a graded mess.
Tuscan Hills developer Walter Luce was another favored developer of Yvonne Parks.
Hundreds of acres of land remain to this day grubbed up all over the city with unfinished developments that never happened. As mayor, Yvonne Parks has steered the city forward by enthusiastically promoting every project that never happened.
The man introduced by Parks as Micheal Crosby flew into the desert on chartered jets and drove around the city in a customized $130,000 Mercedes wining and dining to curry the favor of Mayor Yvonne Parks’ endorsement. Lavish spending by Crosby won coveted political sponsorship and the favoritism of good old-fashioned patronage. The endorsement of Mayor Yvonne Parks, along with the added gravitas of support by councilman Scott Matas, added the appearance of legitimacy Crosby needed to sell his project and persuade investors to part with their money.
The project of Crosby’s that was often talked up by Yvonne Parks was supposed to be 45 holes of golf on courses designed by Phil Mickelson, a golf school, an outlet mall, and an exclusive self-contained 2,000 unit residential housing development along with thousands of high-end condos to be built on the western edge of the city, accessible primarily by Highway 62 so wealthy residents would not have to shop and mingle with low income city residents.
Instead, the project promoted by Yvonne Parks evaporated, leaving huge bills for the city. The city was forced, among other expenses, to pay $140,000 settlement for legal bills for plaintiffs in the case against Desert Hot Springs and the city’s own legal bills that totaled more than $100,000. It all added to the sense of frustration that Desert Hot Springs city officials are little more than willingly gullible dupes.
The nature preserve known as the Multi-Species Habitat Conservation Plan was a political trade-off for the construction of the freeway overpasses on the 10 freeway that had been held up for a decade due to wildlife concerns. Crosby promised Yvonne Parks he would personally finance the city’s legal expenses to oppose all the rest of the cities in the Coachella Valley, Riverside County, the state of California, various federal agencies and the Sierra Club. It was a battle doomed to fail.
Mayor Yvonne Parks allowed Crosby to isolate the city as she led the effort to oppose the MSHCP. Additional legal expense of over a million dollars were incurred by the Coachella Valley Association of Governments in order to write the city back into the MSHCP.
Krzyzaniak started soliciting investors in 2003, using some of the the proceeds to finance a lavish lifestyle, including a house in Laguna Beach, CA., courtside seats for Minnesota Timberwolves games, travel on chartered jets, generous campaign contributions while using other investment funds to keep the project afloat with “lulling” payments to investors.
Not everyone was duped; some had their eyes wide open as some city watchdogs were not fooled by Crosby. Comments following news articles pleaded for real investigative reporting exposing the foolishness of the Crosby-Parks scheme, instead of public relations promotions. Investigative reports also ran in the city’s only newspaper, the Desert Valley Star [now the Desert Star Weekly] expressing support for the nature preserve, encouragement for a united Coachella Valley and reporting astonishment about the naivety of council members working with – or for – Crosby.
When the Desert Valley Star first ran reports in 2008 that Crosby was, in reality, Michael Krzyzaniak, a convicted felon and impostor, the whisper campaign of the public relations Mayor Yvonne Parks’ machine cast criticism on the media for reporting that the Twin Cities man was convicted of fraud in 1993.
The scheme was not limited to Desert Hot Springs but reached nationwide. A NASCAR-style race track in the Elko New Market area south of the Twin Cities was also promoted by Krzyzaniak. He also lured investors over the eight-year scheme with a solar energy project in Colorado and Internet-based communications kiosks for hotels and airports in Southern California.
Michael Krzyzaniak simply walked away from incarceration with Gerald Greenfield, 67, at about 10 p.m. Saturday according to U.S. Marshal Service spokesman Thomas Volk.
Greenfield, of Bloomington, had a projected release date of Nov. 2, 2015, from his more than four-year sentence for conspiracy to commit money laundering for a $2.5 million mortgage fraud scheme.
Michael Krzyzaniak is described as white, 6 feet tall and 200 pounds, with brown hair and hazel eyes. Greenfield is white, 5 feet 9 inches tall, 150 pounds, with blond hair and blue eyes.
Anyone with information about either escapee is encouraged to contact the U.S. Marshal Service at 1-218-720-3214 or call 911.
Thanks to reporting by Paul Walsh of the Minneapolis Star Tribune
Search warrant reveals luxury life on investors’ tab by Dan Browning of Star Tribune