Fmr. Grand Rios Owner, Others Charged In Fraud Scheme
MINNEAPOLIS (WCCO) – Three people, including the former owner of Grand Rios Water Park, were charged in Minneapolis Federal Court Thursday with conspiring to evade paying federal taxes.
Jeffrey John Wirth, his ex-wife Holly Claire Damiani and Michael James Murry were charged with one count of conspiracy to defraud the U.S. Wirth was also charged with two counts of filing false individual tax returns and two counts of filing false corporate tax returns. Murray was also charged with two counts of procuring a false corporate tax return as well as two counts of procuring a false individual tax return.
According to an indictment, the three allegedly conspired with each other to obstruct tax collection by the IRS. Wirth owns "The Wirth Companies," a real estate development and management company and about 30 other businesses. Among them is the Grand Rios Hotel and Waterpark in Brooklyn Park.
The indictment states that Damiani was married to Wirth from 1980 to 2008, was a vice president at The Wirth Companies from 1988 to 2006 and was the company's CFO from 2003 to 2006. From 2000 to 2010, Murry was the primary tax preparer for Wirth and his businesses.
The indictment alleges that the three arranged for millions of dollars worth of construction and acquisitions for Wirth and Damiani's Lake Minnetonka custom mansion to be paid by Wirth's companies, but not reported on business tax returns or Wirth and Damiani's personal income tax returns.
Wirth and Damiani are also accused of understating their wages on personal income tax returns. From 2002 to 2006, the wages TWC paid to Wirth and Damiani were $12,000 per year or less, but the fair market value of their labor was far higher than that.
They also didn't report The Wirth Companies' tax returns millions of dollars in fee income during the construction and development of the Grand Rios Water Park and the Grand Lodge Hotel and Waterpark in Bloomington. Wirth and Damiani also allegedly caused the income and losses of TWC and their related businesses to be zeroed out by using losses from certain businesses to offset income from other Wirth businesses.
Wirth also filed false corporate tax returns in 2004 and 2005 that were prepared by Murry. Wirth and Damiani also filed false individual tax returns in those years that were prepared by Murry. The IRS is suffering a total tax loss in the millions of dollars as a result.
All three face a maximum penalty of five years in prison for the conspiracy charge and up to three years on each tax count.
