Escaped Palmwood Developer Captured

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Convict from Desert Hot Springs Scam Never Returned to Scene of Crime

The Hampton Inn where escaped felon Michael Crosby has been calling home this last week.

The Hampton Inn where escaped felon Michael Crosby has been calling home this last week.

DESERT HOT SPRINGS, CA – Residents of the city can rest easy now that Federal Marshals have arrested the Palmwood fraudster, and his fraudster pal, who escaped from a minimum-security federal prison in Duluth. The prison camp lacking a fence operates on the honor system. It was rated by Forbes magazine a few years ago as one of the top places to do federal time.

Considering it a possibility that fugitive Michael Crosby would turn up at the scene of his crime, the international INTERPOL service took special care to forward Crosby’s mugshot to the Desert Hot Springs police department according to Kate Singer the Police Chief, saying, “If we see ’em we’ll arrest ’em.”

Convicted felons Michael Krzyzaniak, 64 (AKA Michael Crosby) and Gerald Greenfield, 67, were caught early Friday enjoying an extended stay at the Hampton Inn in Burnsville, just outside Duluth Minesota, where they checked in just hours after turning up missing last weekend from the federal prison camp.

The two are now held at the Ramsey County jail, facing the prospect of spending a couple extra years behind bars for their unexcused absence.

“Tip information led investigators to the hotel where Krzyaniak and Greenfield were located together,” the Marshals Service said in a statement. “The pair were arrested without incident.”

On the Down Low

Michael Krzyzaniak

Michael Krzyzaniak on left from Federal Department of Prisons and on right during the heyday of his Palmwood development scam.

Last Sunday the duo registered under an alias after turning over a credit card number and paid for their room with cash. Kryzyaniak has long used the alias of Michael Crosby as well as more than a dozen additional names, according to public records. No mention was made where money or the credit card got into their hands.

“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,” said Minneapolis attorney Paul Engh.

“In our estimation he has something like $8 to $10 million squirreled away,” said Ron Breckner of Minnesota who with his family lost over $17 million of the $25 million that Crosby ripped off from investors, mostly in Minnesota, for the false promise of the Palmwood Development in Desert Hot Springs which lured golf pro Phil Mickelson into the Palmwood web.

“We are not happy that he is enjoying his incarceration at this luxury facility,” said Ron Breckner, “Some of the folks who invested in Crosby were in their 80s and lost their life savings to this crook.”

Yvonne Parks

Mayor Yvonne Parks

Desert Hot Springs Mayor Yvonne Parks at the time of Palmwood scandal was a council member who helped Crosby with the development that ended up costing the city the loss of over a million dollars. She had no comment.

Quiet Capture

It was reported by the Star Tribune in Minnesota that a guest at the hotel from Orange, CA., said she was awakened in the middle of the night by loud banging and voices seemingly right outside her room on the fourth floor. The only phrase she could hear clearly was “Put your hands up.”

The convicts may have been practicing some kind of robbery, although they were not considered dangerous and not armed. The inmates were discovered missing Saturday night during a routine head count at the prison.

Michael Krzyzaniak, of Minneapolis, had nine years to serve of a more than 12-year term for bilking investors by promoting development projects that never happened. Palmwood in Desert Hot Springs was prominent among Krzyzaniak’s fraudulent projects which also included a NASCAR-style racetrack in the Elko New Mexico and a scheme to install ATM kiosks at airports all over the nation.

At his 2011 trial, Michael Krzyzaniak was represented by local attorney Brian Harnak in pleading guilty to wire fraud and tax evasion. His appeal, with Krzyzaniak representing himself, argued the penalty amount assessed was incorrect as he claimed the amount of the fraud pegged at $25 million actually should have been just $20 million. When arrested Krzyzaniak had no money. His appeal was denied January 8 this year.

Prison Camp

The all-male camp from which the escape was made has a fully equipped gym, movie theater, recreational center with musical instruments plus a “hobbycraft area,” where inmates can participate in ceramics, drawing and leathercraft activities. The 840 inmates live in dormitory-style comfort in buildings near the Duluth airport.

Court papers quote judicial sources as saying Michael Kryzaniak has been engaged in criminal activities since youth. Also, in 1988, Krzyzaniak, skipped town as he faced trial in connection with a bogus scheme to sell $550,000 worth of American veteran commemorative medallions. Honored flight veteran Chuck Yager was drawn into the scheme.

Kryzaniak was arrested seven months later while walking his dog in West Palm Beach, Fla., as he was setting up another telemarketing operation. In the meantime, he 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 plead guilty in a plea bargain and was sentenced to six years in prison.

Thanks to Star Tribune reporters Susan Feyder, Chao Xiong Dan Browning and Paul Walsh.


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