Jeffrey Wirth from KARE files
Holly Damiani exits federal court August 2011
Wirth mansion on Lake Minnetonka from Sky 11
SAINT PAUL, Minn. -- A hotel and water park developer accused of tax evasion made his first appearance Monday in federal court. Jeffrey J. Wirth did not enter a plea because he doesn't have an attorney yet.
In a federal indictment unsealed last week, Wirth and his ex-wife, Holly Damiani are accused of under reporting personal and corporate income. They allegedly conspired to take corporate profits off the books and funnel it into construction of a large mansion on Lake Minnetonka.
That home, on an island in St. Alban's Bay in Greenwood, was never finished and is listed for sale by Coldwell Banker. The federal criminal information, which also names the couple's tax preparer Michael J. Murry, accuses the duping the IRS in order to channel money into the project.
Wirth came to prominence as the developer of several high profile projects, including water parks in Brooklyn Park and Bloomington. He also converted the former Minneapolis Athletic club into a luxury hotel.
Damiani was vice president and chief financial officer of The Wirth Companies until 2006 when the couple separated. They were divorced in 2008. During four of those years, according to the indictment, Wirth and Damiani each claimed earnings of only $12,000 each on their personal tax returns.
They're also charged with falsely "zeroing out" the corporation's books by listing consulting fees, so that the multi-million-dollar operation would escape tax liabilities.
During the same time, the prosecution alleges, the company wrote several checks for the construction of the 19,000-square-foot mansion on the lake. Those included $2.2 million for the land, $175,00 for construction, $84,000 in design fees and $24,000 for a building permit.
In court Monday U.S. District Magistrate Judge Steven Rau formally advised each of the defendants of their Miranda rights against self-incrimination.
They are expected to plead not guilty, but Judge Rau did not take pleas Monday because Wirth hasn't hired an attorney yet. He ordered all three to appear before federal Magistrate Judge Jeffrey Keyes at a later date to formally enter their not guilty pleas.
Wirth, Damiani and Murry all surrendered their passports as a condition of remaining free pending their trials. Wirth asked Judge Rau if he could keep his passport because he had critical overseas trips already planned.
Rau denied the request. He told Wirth the Internal Revenue Service investigation has been underway for several years, and he should have planned accordingly.
None of the defendants would speak to reporters Monday as they left court. Damiani is represented by Andy Luger, while Murry appeared in court with attorney Bill Mauzy.
(Copyright 2011 by KARE. All Rights Reserved.)