JNS BLOG ECLUSIVE: Attorney Michael L. Czarnik Was Suspended From Practicing Law For Lying About Income, Was Associated With "Dream Homes" Fiasco...

Stock photo by Hawthorne Hawkman, crappy Dream Homes property, blog post by John Hoff

After the "Hawthorne Hawkman's" latest Dream Homes/Pamiko post--which went up just hours ago--the NoMi-based "Hillside Chronicles" blog recognized one of the names in the post; Attorney Michael Laurence Czarnik. (The name is reportedly pronounced like Sarz-NIK)

A little internet searching turned up information about Czarnik being suspended as an attorney in association with lying about income, and more about his already-known-and-documented association with the Dream Homes fiasco in North Minneapolis. (The suspension was only for 90 days and he was then reinstated)

Though Hillside Chronicles blog could have easily published this information, "HCB" kicked the information to Johnny Northside Dot Com in a community-minded way, because our larger readership can reach more people.

Here is the (long and tedious) disciplinary case, verbatim, unedited except to eliminate "legal headnotes." (If you would like to print out the original document, click here for a link)

Perhaps a pithy summary can be published later. For now, it is important to get the information out there...



Supreme Court of Minnesota.


In re Petition for DISCIPLINARY ACTION AGAINST Michael Laurence CZARNIK, a
Minnesota Attorney, Registration No. 257382.


No. A07-1885.

Jan. 15, 2009.

Martin A. Cole, Director, Patrick R. Burns, First Assistant Director, Office of Lawyers Professional Responsibility, St. Paul, MN, for petitioner.

Jonathan K. Reppe, Northfield, MN, for respondent attorney.

OPINION, PER CURIAM.

On August 28, 2007, the Office of Lawyers Professional Responsibility filed a petition charging respondent Michael Laurence Czarnik with one count of professional misconduct. The petition alleged that Czarnik gave false testimony under oath, in violation of Rules 8.4(c) and (d) of the Minnesota Rules of Professional Conduct. Czarnik answered the petition, and after a hearing, the referee recommended that Czarnik be suspended indefinitely with eligibility to apply for reinstatement after 6 months. We conclude that Czarnik violated Rules 8.4(c) and (d) of the Minnesota Rules of Professional Conduct, and that the appropriate discipline is a 90-day suspension, a requirement that Czarnik take and pass the professional responsibility portion of the state bar examination, and unsupervised probation.

Czarnik was admitted to practice law in Minnesota in 1995. Between January 2001 and July 2005, Czarnik worked for Minnesota Housing Resources, Inc. (MHR), a Minnesota corporation that administers contracts for the rehabilitation of low-income housing. Czarnik served as MHR's employee, legal services contractor, and Chief Financial Officer. Czarnik was also a shareholder in MHR during the same period. In his capacity as Chief Financial Officer, Czarnik was responsible for most of the human resources and financial issues at MHR. While employed at MHR, Czarnik worked with a tax preparer, gathering information eventually used in his 2004 tax return and MHR's 2004 tax return.

Czarnik began working for Dream Home Development (DHD) in February 2004. While working for DHD, Czarnik continued working for MHR as Chief Financial Officer. Czarnik also continued to provide MHR with legal services on a contract basis.

Czarnik left DHD in January 2005. After leaving DHD, Czarnik and other former DHD employees sued DHD seeking *220 past wages and reimbursement for expenses.

On March 10, 2005, Czarnik's deposition was taken under oath in Michael Czarnik, et al. v. Dream Home Development, et al. In that deposition, Czarnik gave the following testimony:

Q. From January of 2004 to January of 2005 did you have any sources of income other than Dream Home Development?

A. Define sources of income.

Q. Did you receive any monies from any other-from anywhere?

A. Stocks, bonds?

Q. Sure, stocks, bonds?

A. Yes.

Q. So with the exception of publicly traded stocks and your bonds did you ever receive any sources of income from anything else?


A. No.

...


Q. Did you ever receive any distributions from Minnesota Housing Resources in 04?

A. No.

Q. Receive any income from them at all?

A. No.

Q. In 03 did you receive any?

A. I shouldn't say-I'll go back. Before I did receive salary from Minnesota Housing Resources, before I moved to Dream Home, before I actually became an employee of Dream Home.

Q. Did Minnesota Housing Resources ever pay any of your expenses?

A. No.

Q. Did you ever receive any payments from them whatsoever?

A. No. In the context again after I became employed at Dream Home Development.

...

Q. As the CFO of the Minnesota Housing Resources you reviewed their budget, reviewed their expenditures, correct?

A. Correct.

Q. Do you know if there were any monies for legal fees paid in the year 2004?

A. I don't remember. I don't believe there-in 2004?

Q. Yes.

A. In 2004 there were expenses for legal.

Q. For who?

A. I think for Bethel & Associates.

Contrary to this testimony, according to Czarnik's 2004 income tax return, MHR paid Czarnik $20,000 in wages in 2004. Czarnik's 2004 tax return also indicated that Czarnik earned $23,172 from a legal consulting business. Czarnik testified at the disciplinary hearing that $10,500 of the amount for legal consulting represented payments made to Czarnik by MHR in 2004 for legal services. Czarnik could not recall the source of the remaining $12,672 reflected on his tax return.

Czarnik admitted at the disciplinary hearing that he received the $20,000 in wages from MHR in 2004. Czarnik testified that MHR paid Czarnik $20,000 to cover back due wages owed to him. Czarnik also testified at the disciplinary hearing that he was significantly involved in helping MHR acquire property and a mortgage on this property. The money from this mortgage loan was used in part to pay Czarnik's $20,000 in wages, according to Czarnik's testimony at the disciplinary hearing.

At the disciplinary hearing, the Director of the Office of Lawyers Professional Responsibility introduced evidence of six checks issued to Czarnik between April and October 2004, after Czarnik joined DHD in February of that year. Each check was signed by Czarnik on behalf of MHR. The six checks totaled $10,500. Czarnik testified at the disciplinary hearing that he spent over 70 hours providing legal services to MHR in 2004, and kept time records reflecting his services. Czarnik testified that he prepared invoices for his legal work based upon his time records and work product. He submitted each invoice to MHR and signed each of the six checks to himself on behalf of MHR.

In light of these facts, which Czarnik does not dispute, the referee found that...

Because of the nature and extent of respondent's involvement in the financial affairs of MHR; the amount of money paid to respondent by MHR in 2004, both as wages and as contract payments for legal services rendered; the number of payments made to respondent in 2004 by MHR; respondent's significant involvement in the MHR transactions that made it possible for him to be paid $20,000 in back due wages; the fact that respondent separately invoiced MHR for each of the six contractor payments he received; that respondent signed the checks from MHR to himself; that respondent, shortly before his March 10 deposition, participated in gathering and providing to a tax preparer information used in preparing both his and MHR's 2004 income tax returns; and the relatively close proximity in time between the payments made to respondent by MHR and his deposition testimony, it is not credible or likely that respondent was unaware of the payments that had been made to him by MHR at the time of his March 10, 2005, deposition. Further, the questions asked of respondent clearly called for disclosure of the payments he received from MHR.

(Emphasis added.)

Czarnik testified that at the time of his deposition, he did not remember receiving payments from MHR in 2004. Czarnik further testified that he did not review any documents relevant to his 2004 income prior to his deposition.

Czarnik contends that his conduct did not violate Rules 8.4(c) and (d) of the Minnesota Rules of Professional Conduct. We disagree.

At a disciplinary hearing, the Director bears the burden of proving by clear and convincing evidence that the attorney violated the Rules of Professional Conduct. In re Westby, 639 N.W.2d 358, 367 (Minn.2002). Because a transcript was ordered, the referee's findings of fact and conclusions of law are not binding on this court.

In re Peterson, 718 N.W.2d 849, 853 (Minn.2006); Rule 14(e), Rules on Lawyers Professional Responsibility (RLPR). We nonetheless give great deference to the referee's findings, In re Wentzell, 656 N.W.2d 402, 405 (Minn.2003), and will uphold a referee's findings and conclusions $B!H(Bif they have evidentiary support in the record and are not clearly erroneous. In re Moulton, 721 N.W.2d 900, 905 (Minn.2006), amended by In re Moulton, 733 N.W.2d 777 (Minn.2007).


Findings that are based on an attorney's demeanor, credibility, or sincerity, are particularly entitled to deference. Id. Findings of fact will be reversed only if upon review of the entire evidence, we are left with the definite and firm conviction that a mistake has been made.$B!I(B Id. (quoting In re Pinotti, 585 N.W.2d 55, 62 (Minn.1998)).

Every attorney admitted to practice law in Minnesota must take the following oath:

You do swear that you will support the Constitution of the United States and that of the state of Minnesota, and will conduct yourself as an attorney and counselor at law in an upright and courteous manner, to the best of your learning and ability, with all good fidelity as well to the court as to the client, and that you will use no falsehood or deceit, nor delay any person's
cause for lucre or malice. So help you God.

Minn.Stat. $B!x(B 358.07 (2008) (emphasis added). Building on the attorney oath, Minnesota Rules of Professional Conduct 8.4(c) and (d) provide that [i]t is professional misconduct for a lawyer to: (c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation; [or] (d) engage in conduct that is prejudicial to the administration of justice.


[6] Czarnik does not dispute that his repeated statements-that he did not receive payments from MHR in 2004-were false and made under oath. Czarnik does argue, however, that he did not knowingly lie, but rather did not recall at the time of his deposition receiving compensation from MHR in 2004. There is, however, ample evidence in the record to support the referee's finding that Czarnik was aware of the payments, and still chose to testify falsely. Czarnik was intimately involved in running MHR's financial affairs during his tenure at MHR. With respect to the $10,500 in legal fees Czarnik received from MHR in 2004, Czarnik himself signed, on behalf of MHR, six checks made out to himself. We cannot say that the referee's finding that Czarnik knowingly lied in his deposition was without evidentiary support and clearly erroneous. See In re Moulton, 721 N.W.2d at 905.

Next, Czarnik argues that even if the referee's factual findings are accepted as true, he did not violate Rule 8.4(c) because any false representations were not made with an intent to deceive. We reject this argument as well.

We stated in In re Westby, 639 N.W.2d at 370, and In re Peterson, 456 N.W.2d 89, 92 (Minn.1990), that false representations made with an intent to deceive violate Rule 8.4(c). Based on this precedent, Czarnik argues that intent to deceive is an element of a violation of Rule 8.4(c). Assuming without deciding that an intent to deceive is, as Czarnik suggests, an element of a Rule 8.4(c) violation, the evidence presented by the Director is sufficient to support a finding that Czarnik intended to deceive the attorney taking Czarnik's deposition.

In the context of proving fraud, we have held that $B!H(Ba representation is made with fraudulent intent when it is known to be false....Florenzano v. Olson, 387 N.W.2d 168, 173 (Minn.1986). Further, we have stated that [f]raudulent intent is, in essence, dishonesty or bad faith. What the misrepresenter knows or believes is the key to proof of intent. Id. There is no doubt of fraudulent intent when the misrepresenter knows or believes the matter is not as he or she represents it to be. Id. Discussing the relationship between a speaker's knowledge of his statement's falsity and the speaker's intent to deceive, we have held that intent to deceive ... may be maintained by proof of a false statement, made as of the party's own knowledge, if the thing stated is not merely a matter of opinion, estimate, or judgment, but is susceptible of actual knowledge. In such a case it is not necessary to make proof of an actual intent to deceive.

Saupe v. St. Paul Trust Co., 170 Minn. 366, 369, 212 N.W. 892, 893 (1927) (citing 223 Helvetia Copper Co. v. Hart-Parr Co., 137 Minn. 321, 324, 163 N.W. 665, 667 (1917)).


Here, the referee found that Czarnik made false statements with knowledge of their falsity. Rule 8.4(c) requires nothing beyond these findings to demonstrate that Czarnik acted with intent to deceive.

Next, Czarnik contends that he did not violate Rule 8.4(d) because his conduct was not material to the underlying lawsuit in which Czarnik's deposition was being taken. But Rule 8.4(d), which states that it is professional misconduct for a lawyer to engage in conduct that is prejudicial to the administration of justice, does not contain a materiality element. Further, Czarnik's obligation to answer questions truthfully does not depend on the materiality of the questions' subject matter.


We have stated that $B!H(B[o]ne of the main purposes of [the discovery rules] is the discovery of facts which will enable litigants to prepare for trial free from the element of surprise....(B Gebhard v. Niedzwiecki, 265 Minn. 471, 476, 122 N.W.2d 110, 114 (1963). By failing to answer truthfully in his deposition, Czarnik subverted the discovery procedures and engaged in conduct prejudicial to the administration of justice.

The referee recommended that Czarnik be indefinitely suspended from the practice of law with eligibility to apply for reinstatement after 6 months. Czarnik asks this court to impose a private admonition.

[10] [11] [12] [13] [14] Although this court places great weight on the recommendation of the referee, we retain the final responsibility for determining the appropriate sanction. In re Wood, 716 N.W.2d 341, 347 (Minn.2006). The purposes of disciplinary sanctions for professional misconduct are to protect the public, to protect the judicial system, and to deter future
misconduct by the disciplined attorney as well as by other attorneys. In re De Rycke, 707 N.W.2d 370, 373 (Minn.2006). In imposing discipline, we look to the nature of the misconduct, the cumulative weight of the violations, the potential harm caused to the public, and the harm caused to the legal profession. In re Westby, 639 N.W.2d 358, 370 (Minn.2002). In that evaluation, three specific considerations come into play: (1) the conduct at issue; (2) the presence of any aggravating factors; and (3) the presence of any mitigating factors. In re Wentzell, 656 N.W.2d 402, 408 (Minn.2003). Although discipline is imposed on a case-by-case basis, prior analogous cases may also indicate the proper sanction. Id.

Our review of prior analogous cases leads us to conclude that a 90-day suspension is appropriate under these facts. See In re Johnson, 744 N.W.2d 18 (Minn.2008) (attorney suspended for 60 days based on respondent's false statements, made in a letter to a district court and in the course of disciplinary proceedings); In re Block, 739 N.W.2d 917 (Minn.2007) (imposing a 60-day suspension on an attorney who altered client documents and produced them to opposing counsel without disclosing the alterations, in violation of Minn. R. Prof. Conduct 3.4(b) and (c) and 8.4(c) and (d)); In re Van Liew, 712 N.W.2d 758 (Minn.2006) (imposing a 90-day suspension, subject to conditions, on an attorney who made false statements to a tribunal and failed to file opposition to a motion on behalf of a client, in violation of Minn. R. Prof. Conduct 3.3(a)(1), 4.1, and 8.4(c), and (d)); In re Scott, 657 N.W.2d 567 (Minn.2003) (holding that attorney's conduct of making false statements of fact to court in his own marital dissolution and custody matter warranted 30-day suspension from practice of law, subject to conditions, and payment of $900 in costs).

*224 The Director counsels us to consider our decisions in In re Ward, 563 N.W.2d 70 (Minn.1997), and In re Salmen, 484 N.W.2d 253 (Minn.1992), in determining whether the recommended sanction is appropriate. In Ward, we imposed a 6-month suspension, with no requirement to petition for reinstatement, on an attorney who gave false testimony under oath, presented false testimony of his client, and represented his client despite an impermissible conflict of interest. Ward, 563 N.W.2d at 70-72. In Salmen, we imposed an indefinite sentence of at least 1 year on an attorney who, in a divorce proceeding, intentionally submitted to the court a letter falsely claiming that Salmen's client owed Salmen $83,750 from a prior debt. Salmen, 484 N.W.2d at 253-54.

[15] Czarnik's conduct here does not rise to the level of misconduct at issue in Ward and Salmen. However, we emphasize offering false testimony under oath is a serious offense. It is particularly serious when the violation is committed by an attorney whose oath requires him or her not only to exhibit personal honesty but also to uphold the integrity of the judicial system. Both of these obligations are compromised by respondent's conduct here.

Accordingly, we order that:

1. Respondent Michael Laurence Czarnik is suspended from the practice of law in the State of Minnesota for 90 days, commencing 14 days from the date of this decision;

2. Czarnik shall comply with the requirements of Rule 26, RLPR;

3. Czarnik shall pay the Director $900 in costs, plus disbursements, pursuant to Rule 24, RLPR;

4. Czarnik may apply for reinstatement by affidavit, pursuant to Rule 18(f), RLPR;

5. Czarnik shall take and pass the professional responsibility portion of the state bar examination within one year of the date of this decision. Within one year from the date of this decision, Czarnik shall file with the Clerk of Appellate Courts and serve upon the Director of the Office of Lawyers Professional Responsibility proof of successful completion of the professional responsibility portion of the state bar examination. Failure to do so shall result in automatic re-suspension, pending successful completion of the examination, pursuant to Rule 18(e)(3), RLPR.

6. Once reinstated, Czarnik shall be placed on unsupervised probation for a period of 2 years. While on unsupervised probation, Czarnik shall comply with the Minnesota Rules of Professional Conduct and shall cooperate with the Director's investigation of any allegations of unprofessional conduct that may come to the Director's attention.

It is so ordered.
Minn.,2009.
In re Disciplinary Action against Czarnik
759 N.W.2d 217

Activists Gather Video, Demand Criminal Investigation of Circumstances Surrounding Destruction of Pauline Fjelde House...

I received word an active citizen in South Minneapolis is compiling video on a DVD in regard to the senseless and suspicious destruction of the Pauline Fjelde house, click here for a news story about that awful event.

The video is being compiled for various public officials to review. At first, the only two videos on the DVD were one of mine and one of Shiela Regan's, who writes for TC Daily Planet, but upon getting word of the video compilation effort I promptly downloaded about half a dozen videos to my YouTube profile, "JohnnyHoffa."

These videos are the kind of thing I wouldn't normally publish--not particularly gripping, just "junk shots" like the imperfect still photos one inevitably takes when you shoot a lot of pictures--but in this case, the videos have value. I'm hopeful the videos will assist in a criminal investigation and might even be examined by a structural engineer to hopefully prove BIG FAT WHOPPING LIES were told about the structural integrity of this house.

Anyway, here's a little sample of the videos. Anybody needing documentation about the Pauline Fjelde House Heritage Tragedy is welcome to use and reproduce the videos from my YouTube profile, just be sure to give me credit.

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Applying Some Horse Sense to Pamiko-gate

Guest post and photo by the Hawthorne Hawkman

Thanks to the tireless work of many JNS readers, quite a bit of information has come to light regarding Pamiko, the Koenigs, and their previous Dream Homes venture into NoMi-land. Quite a few posts and more than 150 comments later, I thought I'd try to boil things down a bit; apply some common sense, or horse sense, if you will. And since a lot of folks might be hesitant to wade through the legal documents posted here, I plan to focus on that.

But first, let's start with some numbers...

The Star Tribune reported a breakdown of where Dream Homes were located by neighborhood. They rounded percentages, so we might not get an even 100%:

Willard-Hay: 21%
Hawthorne: 21%
Near North: 20%
Jordan: 14%
Phillips: 7%
McKinley: 4%
Central: 2%
And the following neighborhoods with just 1%: Lind-Bohanon, Webber-Camden, Cleveland, Logan Park, Harrison, and Whittier.

Here's a breakdown of Pamiko properties by neighborhood based on lists on this blog. The same disclaimer about rounding numbers applies, as well as a reminder that some Dream Homes are still (temporarily, at least) owned by Pamiko.

Jordan: 28%
Hawthorne: 23%
Near North: 16%
Willard-Hay: 8%
McKinley: 7%
East Phillips: 3%
Folwell: 3%
And the following neighborhoods with one property (roughly 1.5%): Ventura Village, Whittier, Lind-Bohanon, Webber-Camden, Phillips West, Logan Park, and Central.

These numbers clearly indicate that the Koenigs have basically caused irreparable harm to the same four neighborhoods (Hawthorne, Jordan, Near North, and Willard-Hay) TWICE in the past decade. Also, I want to point out the Dream Homes fiasco came crashing down in 2005, right in the middle of the housing boom. Buying a house was so easy back then that pretty much all you had to do was stand on a street corner and say in a slightly raised voice, "I've been thinking about buying a home." Within moments, dozens of mortgage brokers would lunge at you from out of nowhere, thrusting their business cards into your hands. Even if you somehow didn't qualify for a mortgage, the volume of business cards alone would give you the raw materials to build a better structure than what the Koenigs were putting up at the time.

So how exactly does one fail at such a venture in a historically friendly financial climate? The legal documents provide a bit of insight into that question. But before Koenig failed for the first time at housing in north Minneapolis, he managed to fail at paying his bills entirely. It's ironic that one commenter said Koenig would complain about things like welfare fraud, where people are living off of government money without deserving it.

See, included in the list of creditors who didn't get their money is a list of about every level of government that collects funds from you and me. $6,173 owed to Hennepin County, $1,545 to the IRS, $24,835 to the state of Minnesota, $135 to the city of Eden Prairie, and $326 in bounced checks to the license bureau (If I had to guess I'd say it was for the license tabs so he could keep on driving his Lexus). That's $33,014 that the rest of us paid for with our tax dollars. Now maybe there was a legitimate reason for the bankruptcy and the discharge of those particular debts, but it still diminishes one's credibility when complaining about other people supposedly living off of the government.

The bankruptcy also shows $10,853 in association dues discharged, and my personal favorite bit, $19 to Blockbuster.

Some folks have speculated as to how Koenig got access to credit after the bankruptcy, but keep in mind when this was happening, credit was much looser. You could qualify for a conventional mortgage and most other lines of credit a mere two years after the discharge of a chapter 7 bankruptcy, provided you didn't have any new bad debt since then. (And some subprime mortgages were available the DAY AFTER a discharge of bankruptcy.) That gave him just enough time to turn around and inflict Dream Homes on our neighborhood.

Anyone unfamiliar with what a Dream Home is only needs to drive through north Minneapolis and keep your eyes peeled for a gigantic yellow box, usually with no basement, cheap vinyl siding, no garage, and virtually no distinguishing features whatsoever. That's a Dream Home, which was apparently called such by the Koenigs and Kohlenbergers without a sarcasm font. With no garage, no basement, and six bedrooms, these houses were constructed in such a way that they were and always will be dependent on a property manager. Where will the lawn mower and rakes, snowblower and shovels, and other tools be stored? There isn't a place for the basic accessories to owning and maintaining a home.

Most Dream Homes are currently non-homesteaded, and owned by landlords who have multiple properties. At least one, 2818 Aldrich Ave N, is owned by Highland Bank - meaning it was in all likelihood purchased by Danna D III and then lost to foreclosure. The plan was to build upwards of 350 such homes, and all I can say is thank God they went under before they got much past 80.

I've gone through the legal documents posted here, and I'm not sure if they're complete or if perhaps the cases haven't been fully settled yet. Heck, I'm not even clear about who was lying to who about what. But it is obvious that our neighborhood caught the fallout from their little war. Here's what appeared to have happened:

In August of 2006, Stephen Kranz, Donal (legal docs say "Donal," so if this is a misspelling of "Donald," this blog has not made the error) Parks, and Round Table Properties LLC sued Paul Koenig, Michelle Koenig, Pamiko Properties LLC, and MarkLee Construction LLC. "Dream Home entities" were also listed as relevant parties: DPK Properties LLC, Dream Home Development LLC, and KOKO Property Management LLC, as well as David and Sharon Kohlenberger.

A side note here: The Koenigs appear to have either a narcissist streak or are rather uncreative. DPK = David, Paul, Koenig/Kohlenberger. KOKO = Koenig/Kohlenberger. MarkLee Construction consists of the middle names of Paul and Michelle Koenig. Heck, even Paul, Michelle, Koenig = Pamiko. It's like a slimy version of Donald Trump. Ok...slimiER.

So the plaintiffs here essentially alleged that they were owed money from some Dream Homes they invested in, that they were lied to about the income streams that were being generated, and that the Koenigs and Kohlenbergers were attempting to transfer properties in a way that would prevent them from collecting money owed. A total of 71 properties with a $2 million dollar value was detailed. The plaintiffs alleged insider activities and said that six sales had already happened, resulting in $270,000 being made from those sales.

Also sued were Michael Czarnik, an agent of Dream Homes, and three Realtors, Jay Jasper, Tammi Panning-Jasper, and Amy Jasper-Fenske. Tammi is singled out as acting as a dual agent in the sale of six Dream Homes. Dual agency, or representing both the buyer and the seller, is fairly uncommon and can much more easily allow Realtors to engage in and get away with fraud.

Specifically, the plaintiffs alleged that Jay and Tammi provided a Dream Homes sales brochure that showed rental income of $2,247 per month per home. This dollar amount consisted of two separate portions: Section 8, and a "subsidy" from third-party charitable organizations established to supplement HUD rent payments - specifically to supplement Dream Home's "unique six bedroom houses." DHD (Dream Homes Development) claimed to have contact with over 30 such non-profit organizations, and had been receiving supplemental rent payments from them "for a long period of time."

Based on this information, the plaintiffs purchased six properties. But what was the ACTUAL non-profit subsidy amount?

The court documents allege: "On September 24, 2004, Kranz and Parks discovered that the 'subsidy or grant money' was not coming from third-party non-profits, but that DHD was paying this money out of its own pocket. Kranz and Parks subsequently discovered that defendants' representations concerning the amount of income each rental property generated on a monthly basis, and the multiple sources of that income were false. No non-profit or charitable organization had been supplementing rent payments with grant or subsidy money. That source of income simply did not exist." (Emphasis mine)

Also, Kohlenberger, DPK, and DHD owed plaintiffs money as a refund of $5,160.87 in overpaid closing costs. The defendants issued a check to repay that amount. Well, apparently the plaintiffs never called Mystic Lake Casino or the License Bureau to find out what happens when you try to cash a check from the defendants. And a jury might not be able to do so either, since the Koenigs had filed a motion to have the bankruptcy information excluded from the court proceedings.

The Kohlenbergers settled for $1,000,000, but it's not clear if they actually PAID Kranz, et al. The Koenigs, on the other hand went on to blame this whole thing on the Kohlenbergers. They sued the Kohlenbergers for $1.2 million over the transfer of four properties. Interestingly enough, they claimed that they were "personally liable" for the unsettled debts related to the properties. Wait a minute...I thought this was all done through LLC's...so why are the Koenigs "personally" liable? Could they be mixing personal and business enough to be held personally liable for the colossal scale of foreclosures and slumminess they've inflicted on our neighborhood?

In their suit, the Koenigs attest that the Kohlenbergers listed properties that didn't even exist. This accusation jumped out at me because I thought the Koenigs were doing the same thing with Pamiko properties this time around. Since my notes weren't clear, I went back to Hennepin County and double-checked. It turns out my notes are inaccurate, and there are no currently known fictional properties associated with the Pamiko issues listed on this blog.

The Koenigs also alleged that the Jaspers were listing several Dream Homes for sale without properly notifying them. The Dream Homes, according to the Koenigs, were selling for almost $300,000 at the time. Which leads me to wonder once again, what kind of people can't work together to make money when properties are selling for $300,000 in NoMi?

And that's the summary of the court documents posted on the JNS pdf site. It is not known by anyone on this blog whether this case has been settled. And even though the neighborhood has clearly paid the highest price here, we don't even know who will fix up these homes, how much that might cost, or who might be the next round of buyers. What we do know is that the Koenigs can't shovel enough sidewalks in NoMi to make up for the damage they've caused.

Word Of Arrest In Jordan Pond House Burglary...

Stock Photo by John Hoff, Minneapolis Police

Some weeks ago, this blog reported details of a burglary on the Jordan Pond. (It is technically known as "Logan Pond," but everybody calls it "Jordan Pond.")

Now word comes by voice mail, passed on by text message to yours truly, of an arrest in that particular burglary. This blog is hopeful there will be confirmation and more details to pass on in the next few days.

In the meantime, God Bless The Minneapolis Police Department.

(Do not click "Read More")

JNS BLOG Official Rumor, Scuttlebutt And Dark Innuendo: Is Bank Of America Sitting On Numerous Vacant Homes Until After New Years?

Stock photo by Jeff Skrenes, example of charming fixer-upper, too bad this is a Pamiko property

Today, a friend of mine in the real estate biz passed along what she/he states is a widespread rumor among professionals in the home selling business: Supposedly, Bank of America--which bought out Countrywide--is holding on to numerous vacant homes "for tax purposes" until after the New Year. This is producing an odd and unexpected dearth of homes for sale in places like North Minneapolis, even as we are SURROUNDED by vacant homes.

Don't get me wrong, there are PLENTY of homes for sale in North Minneapolis (NoMi). But the number actually for sale appears to be nowhere near the number vacant. So will we see a sudden bumper crop of real estate signs soon after New Years? I kind of hope so!

Of course, NoMi is rapidly turning into a "slumlord graveyard," so it would be best if enthusiastic owner-occupants arrived in droves while would-be slumlords wisely STAY THE HECK OUT, because otherwise NoMi neighborhood activists will put their figurative head on a metaphorical pole, click here for a fine example of THAT.

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More Photos--"The Devil's Brothel" Goes Down At 3020 6th St. N., NoMi Activists Celebrate With Sausage, Vodka, And Hula Hooping!

Photos By John Hoff and Jeff Skrenes, post by John Hoff

Above, Housing Director Jeff Skrenes holds a hula hoop in front of the demolition of 3020 6th St. N.

Yes, I realize this blog has a tendency to report demolition in extensive detail. There are reasons for this.

First of all, NoMi neighborhood activists fight so long against certain problem properties--places with a fatal combination of decrepit structure combined with criminal thugs--that when the Backhoe of Doom finally arrives, we can't get enough of watching in delight or, as Commander Mike Martin put it so well, "reveling" in the demolition. (Of course, the "delight" is mixed with regret in this case. The house at 3020 6th St. N. could have been a renovation success story before the unsolved arson ruined that possibility)

But on to the second reason for the obsessive demolition coverage:

Though this blog always writes for a CURRENT audience, we also write for the history books. Right now, our neighborhood is being massively transformed, as houses which stood for a hundred years get demolished or--hopefully, and more often--get snapped up by a new wave of enthusiastic owner occupants. Some day, the current generation of children will have their own children and grandchildren in NoMi, and they will be curious about what once stood at the home where they reside. They will be FASCINATED to learn it was the devil's own brothel, or a beautiful historic home tragically fallen on hard times and (quite arguably) prematurely demolished.

So, keeping in mind that 3020 6th St. N. stood for a hundred years and then went down in mere hours, here is more of the story-in-pictures of yesterday's demolition...


Moments before the demolition, one of the workers makes measurements for plastic sheeting to cover the loads of haz mat coming from the house. 

Would you like fries with that? A mysterious order of fries was on the ground as the workman measured out the plastic sheeting. 

As the house was torn apart, we saw a toilet hanging at a sideways angle. I asserted the toilet was made out of steel, like a prison toilet, but another bystander said it was standard porcelain, covered with soot from the fire. I couldn't believe the guy running the backhoe let the toilet hang there and hang there. I would have been all, like, WOO!!! SMASH THE POTTY!!! 

This photo gives a better idea of where the toilet was during the demolition. When you watch a building get demolished, you get caught up in the fate of individual objects, whether it's a bathroom mirror or a historic trunk, tragically and needlessly smashed at the house of Pauline Fjelde, despite the feeble efforts of a toothless and cowardly Heritage Preservation Commission. 

When consuming champagne in a public street, it is very important to make sure you cover the bottle with a paper bag. I offered Commander Mike Martin a drink, but he declined. 

The faces of two little Hmong children watch in a window, fascinated with the demolition. Unlike the little face which watched the demolition of Pauline Fjelde's house, the lives of these children will be made better by the demolition, not worse. 

Knock knock, who's there? 

Tyrone Jaramillo of the Jordan Neighborhood--pictured in his van next to Hawthorne Housing Director Jeff Skrenes--came by to see if any scrap metal could be salvaged at the demo site, but went away empty-handed. He was still in a cheerful mood to see our neighborhood making progress. 

Detail of Tyrone's steering wheel. 

The demolition site was fenced off due to asbestos danger. 

Water used to keep dust down at the site made this oddly-beautiful scene. Look at all that scrap metal. There has to be a better, more environmentalist way to do these demolitions in the so-called "Eco Village." 

Workmen use plastic sheeting to cover the load of Haz Mat. Gee, what if we used biodegradable corn starch plastic instead of petroleum-based plastic? 

The Backhoe of Doom stands on the spot where one drug addict after another knocked on the door. 

Taking a break from watching the demolition, Jeff and I went to the house of "the Polish lady" and her husband for our traditional "demolition day" meal of Polish sausage. Above, "Andy the Sausage Maker" poses proudly with an advertisement in the "Northeaster" community newspaper, which features his likeness. 

Andy is kind of a "sausage maker rock star," an expert artisan whose medium is meat. This Christmas, he made over a thousand pounds of sausage for his employer. If you want to try the great Polish sausages that folks in the Eco Village rave about, Andy works at Sentyrz Liquor and Supermarket in Northeast, click here for more info. 

Above, the ad in Northeaster which made Andy proud. The ad features greetings in Polish. 

Above, Jeff enjoys Polish sausage with Polish mustard on Polish bread. This is the first time we sat down and ate our "demolition sausage" with a plate and silver wear. Usually we just gnaw it cold for breakfast while walking around, checking progress in the Eco Village. (Fortunately, the sausage is just as delicious cold as it is hot!) 


Andy served us this amazing and unique vodka. Zubrowka vodka is flavored with something called "bison grass" which grows in the last bit of untouched, primeval forest in--so the bottle says--all of Europe. The forest is known as the "North Podlasie Lowland" in the region of Bialowieza. This aromatic plant resists cultivation and must be harvested by hand in the wild. What a perfect Eco Village drink! (Here's a link to one of the Eco Village planting projects) 

The aromatic flavor is amazing, complex and very complimentary to the vodka, unlike so many newfangled flavored vodkas where the flavor appears to have little resonance with the vodka itself. In fact, this vodka barely tasted like vodka. The aromatic plant which flavored the alcohol (and gave it a subtle olive hue) seemed to create a wholly new and different drink. Andy brings this stuff all the way from a Polish neighborhood in Chicago. If you can get your hands on some of this stuff, give it a try. You won't be disappointed.




Our meal also featured Tyskie Polish beer and Polish mustard. Even the bread was Polish. Andy brings many of these items from Chicago because he can't obtain them locally. The connection this couple maintains to their native land is amazing. Even their television was tuned to a channel in Poland. Jeff said the beer was fantastic and, "If it wasn't, I would not hesitate to let you know."



"The Polish lady," pictured above, is locally famous for her gardening skills. Mayor Rybak has toured her garden during a visit to the Eco Village. In the winter, she pages through her seed catalogs and dreams of her next garden.

The Polish lady is very dedicated to her Roman Catholic faith. In the picture above, note the "Black Madonna of Czestochowa," Poland's most revered icon.  

After dinner, Jeff played with the Polish couple's big Huskie, named Miko. They also have a small "back up dog" named Sparky. Jeff asserts that a big, fierce-but-lovable dog combined with a smaller "back up dog" is the perfect canine combination.

Now there's a cool dog toy: A rubber beer can. A dog could learn a valuable fetching skill from a toy like that! 

Above, Jeff tests our ongoing hypothesis: there is no family-friendly way to pose with a Polish sausage. As you can see from the photo above, the thesis is still solid.



Yup, the thesis is still solid.

Today, I went to the demolition site and rubble was still being hauled away. But on the public sidewalk, I found half a brick.

I picked up the broken brick and took it with me to add to my ever-growing North Minneapolis brick collection as a war trophy.

Yesterday was a bittersweet victory. But the battle to transform and revitalize North Minneapolis continues.

3020 6th St. N Goes Down At Last--!

Today 3020 6th St. N. went down. This place was a notorious house of prostitution and drugs and the subject of frequent posts on this blog, not to mention getting plenty of coverage in the upcoming Adventures of Johnny Northside movie. The demolition was witnessed by...

...myself, former Hawthorne Neighborhood Chair Peter Teachout, Jeff Skrenes (the Hawthorne Neighborhood Housing Director) and Jordan resident Megan Goodmundson. As reported in an earlier blog post, myself and Jeff Skrenes did the "hula by proxy" to commemorate the words of Joyanne Teachout, who said she felt like "doing the hula" in happiness at the evacuation of the "Apartment Complex of Anarchy," which was just down the street. Champagne was also consumed at the scene, in a brown paper bag to keep it legal legal, especially since Fourth Precinct Commander Mike Martin pulled up at the scene.

Unlike the recent and tragic demolition of the Pauline Fjelde house in South Minneapolis, the house at 3020 6th St. North was relatively insubstantial and broke apart like crispy kindling. At one point, a toilet was sideways as though mounted on a wall. Carpeting hung from the newly-split-level layout like a massive stage drape, and the carpet looked like it was pretty nasty even BEFORE the arson.

The crews at the sight informed us the house was considered "haz mat" due to the arson, and put plastic wrapping around the truckloads of debri leaving the sight. One of the crew members informed us that doing a demolition this way--with the haz mat precautions--costs three times as much.

At one point, Jordan resident Tyrone Jaramillo showed up, hoping to get some scrap metal, but had no luck in that regard. (On a side note, Tyrone is a wholesome and honest scrapper with a wife and three kids. If you know of scrap metal needing to be cleaned up, get in touch with Tyrone. The Jaramillos also put on one great Christmas dinner!)

In the window of a house next door, two small Hmong children watched the backhoe in fascination.

The highlight of the day may have been some of the words of Mike Martin, Commander of the Fourth Precinct, who said he came by just to "revel" in the demolition of 3020 6th St. N.

Martin said, only half-jokingly, that the plunging crime rate was going to put him out of a job. I responded to Martin and said something along the lines of, well, what about white collar crime, like mortgage fraud? What about terrorism and theft of intellectual property such as DVD piracy? Hey, once we get all the violent street crime under control, there are still big swathes of crime needing the time of police officers. In fact, the officers will require MORE TRAINING and, being more specialized, will make more money.

The whole time we spoke, the Backhoe of Doom roared in the background.

Later, Jeff and myself went to the house of "the Polish woman" and her husband, who treated us to Polish beer, Polish vodka, and Polish sausage on Polish bread. (There was a theme with the meal, as you may have noticed) Consuming Polish sausage during demolitions in the Eco Village has become a kind of tradition with Jeff and I, though Jeff remarked this was the first time we did it inside, sitting down, with silver wear and plates instead of gnawing the sausage outside.

Yes, I told Jeff, things are really looking up in the Eco-Village.

2515 3rd Secured, and not by the Owner

Guest post and top two photos by the Hawthorne Hawkman. Bottom two photos by John Hoff.

A heartfelt thank you goes out to the city of Minneapolis today. The house at 2515 3rd St N, which was reported as "flagrantly open to trespass," was very quickly secured and boarded. Not by the owner, mind you, who normally can't even be bothered to pick up garbage at his property despite owning a nice house next door.

I was driving around yesterday, when...

I saw a board-up crew just a block south of my place, and decided to stop by for pictures. A gentleman I'd met before who does artistic board-up work came up to me before I could even get out of my car and asked, "Are you the blogger guy?" (I get such a kick out of having THE as a formal article applied to this blog; like there's only ONE BLOG on the WHOLE INTERNET and this is it.)

So I said, "I'm one of them; I'm the housing director for the neighborhood and I do some blogging on Johnny Northside." He explained that the property was secure, but they were going to do some touch-ups, and asked that I come by the next day for photos.

So I obliged, and the photos above are from the crew putting the finishing touches on the board-up. Thanks again to all involved in making this structure and our neighborhood safe!

Mysterious "Adult Swim" Mural Appears In NoMi...

Photo By John Hoff

For a couple weeks, I've been wondering about a cryptic and mysterious wall mural which appeared on the side of 2230 Washington Ave. N. Finally, a couple days ago, I examined the mural with my friend Connie Nompelis. (No-bell-iss, it's Greek)

Upon further examination, I saw...

The mural had the words "Adult Swim" on the side, click here for their website, which features cartoons for a grown-up sense of humor but isn't really "adult" humor in the more common sense of the term.

A little Googling revealed these murals have been popping up around the country, and at least one individual thought the murals were asking whether traditional Christmas is still relevant in the modern world. So there. Mystery solved.

While I was looking at the building, I noticed this cool star-shaped feature on the exterior. There are so many cool, historical buildings in NoMi and, for that matter, all over Minneapolis.

Too bad we have a Heritage Preservation Commission that is toothless, powerless and, at times, willfully blind and ignorant...not to mention a few of the commissioners who don't even bother to show up for a meeting.

But, oops, that's a different topic for a different post.

3020 Demolition Starts New Dance Craze!

Guest post by the Hawthorne Hawkman. Video footage from John Hoff and the Hawkman, respectively.

Okay, so there's a REASON why John and I are hula-hooping in front of the demolition of 3020 6th St N. It all started in the spring of 2008...

The apartment complex of anarchy was foreclosed upon, and its tenants were evicted (click here for the full story). Even though the tenants and their friends/associates were a large part of the drug-dealing and prostitution problems we faced AT THE TIME, they managed to call Channel 5 news and the Strib and play the victim. The neighborhood went into full damage-control mode and we told the Strib and Channel 5 what REALLY happened.

Channel 5 reported it almost exactly wrong, showing the "woe is me" tenants without mentioning that they were engaging in criminal behavior, that they had stolen their own copper piping long ago and were willfully living in sub-human conditions of their own making, and had ignored numerous attempts by the neighborhood to attempt to help them find new housing. The Strib at least ran a balanced story, even if the story should have been unbalanced in our favor.

Well the one neighborhood quote Channel 5 used was of Joyanne Teachout, wife of then-board chair Peter Teachout. Joy and Peter still own property in the EcoVillage, although they now live just a few blocks north because their family is too large for that house. Thank God for great neighbors like the Teachouts, who stuck it out through the BATTLES we had to fight over this neighborhood - even to the point of having their truck set on fire (which happened after the apt. complex of anarchy was vacated, and was suspected to be associated with 3020 6th St N, which in case you have forgotten, is the original topic of this post).

So in the midst of all this hoopla, Joy lets out a burst of glee that a horde of bad actors were being forced out of the neighborhood in one fell swoop, and she said to Channel 5, "I'm so happy I could dance the hula in the street..." A whole lot of other substantive things were said by residents, but this is what they ran with to spin the story the way they wanted.

In honor of the Teachouts and their contributions to our neighborhood, John and I danced the hula while 3020 was being demolished.

Johnny Northside Movie, Though Delayed, Is Moving Forward!

The Adventures of Johnny Northside Movie Trailer from Gabriel Cheifetz on Vimeo.

For months, people have been asking me "What's up with the Johnny Northside movie?" and saying they were eager and excited to see the finished product. For months, I've been saying...

"It's delayed. The damn economy. The movie needs funding to move forward."

This is no longer the case. Today, in the midst of 3020 6th Street. N. being torn down, I talked to the movie producers on the phone and got word the project is moving forward. An expensive piece of equipment was needed for editing, but that piece of equipment has been purchased. Editing will take place over the winter. Funding would be nice, but is no longer needed.

Here's hoping we see a finished product by the time the snow melts!

Walking on the Sidewalks Shouldn't Be So Hard

Guest post by the Hawthorne Hawkman. Image from www.failblog.org

I know this might seem like a minor issue, but it's one that really does put pedestrians and drivers in danger. Why is it so common for people to walk down the middle of the street? I've lived near Como Lake in St. Paul, in Uptown, and in SoMi, and I haven't seen this kind of behavior anywhere nearly as often as I do here.

Now before folks think I'm acting like a crotchety old fogey, I do understand...

...about the snow. When sidewalks aren't shoveled consistently and properly, where is someone supposed to walk? But with better enforcement and slumlords easing their guilty consciences, hopefully this problem can be mitigated somewhat.

And I can think of at least ONE good reason to walk down the middle of the street. Okay, two, although the latter is just crossing the street, not walking with or against traffic.

Even so, tonight as I was driving around Hawthorne and Jordan, I almost ran into people at least twice because they were walking in the middle of the street. In both cases, the sidewalks on the block were clearly shoveled and walkable. And in both cases when I honked at them, they looked at me as if it were MY FAULT. I'm surprised people or other vehicles haven't been hit more often when drivers have to swerve at the last moment like this.

For emphasis, I repeat: down the MIDDLE of the street. Even if sidewalks were an issue, no attempt was being made to walk as close to the edge of the street as possible.

The problem goes further as it's not just kids that do this and it doesn't just happen in the wintertime. I've seen adults who should know better - even walking STROLLERS down the middle of the street in JULY. I've ran across groups of at least a dozen kids who walk down the middle of the street like they OWN it (also in the summer).

I'm naming this as an issue in NoMi and asking our fine men and women of the MPD to help us keep pedestrians on the sidewalks or at least out of the middle of the road.

The Devil's House Gets Its Due

Guest post and photo by the Hawthorne Hawkman

I was driving through the EcoVillage today and noticed a demo crew in front of the infamous house at 3020 6th St N. A crew was prepping the house for its demolition. This is progress, victory, a statement of power, even, that the days of open-air drug dealing and prostitution in the area are slipping farther and farther into the past. The Hmong family next door was reportedly thrilled to see the house coming down.

Thanks to the arson at the property, largely suspected to have been carried out by Evannor Haymon or an associate, and the fact that the Devil has taken up residence at 3007 3rd St N we know there's still work to do. But this is a victory nonetheless.

(Do not click "Read More.")

Lifestyles Of The Rich And Fraudulent--Thomas Balko, The T.J. Waconia Fraudster, Lived In This Half Million Dollar Home!

Photo By John Hoff

After finding the secluded, deluxe lake home of imprisoned T.J. Waconia fraudster John Helgason, click here for that story, I thought it was only fair to track down the opulent former digs of the OTHER T.J. Waconia fraudster, Thomas Balko. Like Jon Helgason, Balko is also cooling his heels in federal prison in Duluth.

Unlike Jon Helgason--who apparently managed to create an LLC "holding company" and place a luxurious lake home in its assets, so his family could continue to reside in comfort--Thomas Balko's family does not appear to still reside at this lovely home, located at 12815 Island View Circle, Rogers, Minnesota. The house is located at the end of a cul-de-sac and is, arguably, one of the nicest homes amid homes which are all quite nice.


The property appears to be occupied by a family with a different surname and is no longer in the hands of anybody with the name "Balko," but this information is tenuous and unconfirmed. Anybody who has further info is welcome to forward that info via the comments function.

The house has been in foreclosure and, as of December 19, 2009...

It was listed on the Multiple Listing Service (MLS) as being for sale for 499,900. The house has 5 bedrooms, 7 bathrooms, and is a single family house.

I hope whoever gets the house enjoys the heck out of it and becomes aware of its interesting history. For a period of time, that house was supported on the bleeding back of North Minneapolis. Let's hope the next owner is honest and deserving.

Paul Koenig Fought "Impact Statements" On One Scummy Pamiko Property...

Image from the captured and mirrored "Majestic Farms" Koenig blog, published under First Amendment criticism and commentary

Word comes through the grapevine about a NoMi resident's little adventure with Paul "Pamiko-gate" Koenig last year. Here it is, straight from the horse's mouth:
--------------------------------

In the summer of 2008, I had organized a bunch of neighbors to file impact statements in order to get Paul Koening's property at 3025 Clinton Avenue (South) onto Karen Notch's problem properties caseload. I told Karen that it had gone into foreclosure and some of what has been coming out now regarding Mr. Koening.

I just received a reply from Karen in which she told me that every time she had to address a complaint with Mr. Koening regarding the property that he would immediately contact the Mayor to make complaint that the city
problem properties system was corrupt! Isn't that laughable?!
-----------------------------------
JNS answers: Laughable, indeed! This is a man who wrote bad checks to Mystic Lake and then listed the checks on his bankruptcy. Oh, how I wish the long slow holiday season would end...our city government would ramp up to full speed...and this man would be staring at some kind of indictment or, at least, an invitation to come and answer some pointed questions. Heaven knows he won't answer MY pointed questions.

JNS BLOG EXCLUSIVE: While T.J. Waconia Real Estate Fraudster Jon Helgason Does Prison Time, His Family Enjoys This Spectacular Lake Home...

Photos By John Hoff



T.J. Waconia has almost fallen off the radar since its principals went to prison for investor fraud, an event this blog reported with exclusive pictures, click here. But recent digging into the Pamiko Properties scandal can't help but remind me--and other citizens of North Minneapolis (NoMi)--about the real estate fraud perpetrated by T.J. Waconia. There is considerable overlap: many houses in North Minneapolis gone vacant, and an affluent exurban lifestyle supported on the bleeding back of our neighborhood.

Hopefully, the overlap will extend to Paul and Michelle Koenig going to prison, just like Thomas Balko and Jon Helgason.

For this blog, there are a few pieces of unfinished business involving T.J. Waconia. First, I wanted to publish photos of the spectacular lake home where the family of Jon Helgason still resides. The lake home was mentioned a few times on the "T.J. Waconia victims blog" but, as far as I can tell, no photos or further details were ever published about the lake home. At the time Jon Helgason went to prison, the house was owned by "KCH Holdings," which appears to be an LLC created by Jon Helgason or somebody closely associated with Jon Helgason.

Second, I would like...


...mug shots of Helgason and Balko in their new Duluth prison digs. This has proven harder than I anticipated. Recently, I located online mug shots of two other real estate fraudsters--Donald Walthall and Marlon Pratt--but Helgason and Balko are sitting in a FEDERAL prison, and the "inmate locator" doesn't include a mug shot.

Third...

Well, third is a suprise.

So, yesterday I had an errand to run and I realized I would be near Chisago Lake. It was a great time to take care of T.J. Waconia Blogger Goal Number One.

Finding the lake home was not difficult, but PHOTOGRAPHING the house was a much more complicated matter. Suffice to say, I was forced to cross not-completely-frozen lake ice to get a good quality photo without trespassing. More on that in a moment.

The Helgason residence, located at 30686 Wallmark Lake Drive, Chisago Lakes, has a long driveway that goes in the direction of the lake, and disappears out of sight. The spectacular lake home is, however, visible from the other side of the lake.

From an excursion all around this lake (which is relatively small by Minnesota standards) it is clear the Helgason family occupies the nicest, possibly the biggest and most exclusive piece of property on this lake. The massive, kingly house is visible from the other side of the lake.

In fact, a storage shed appears to be part of the same Helgason land holdings and that shed, alone, is the size of three regular-sized North Minneapolis houses.

What would you KEEP in a shed that size, I wonder? A recreational vehicle like the "rock star RV" owned by the Koenigs? Snowmobiles, motorcycles, three wheelers and other toys? A workshop to putz around with fun hobbies like, I don't know, maybe classic cars? In any case, the unearned affluence and in-your-face-God gluttony is stomach-turning. While our neighborhood struggles to throw off the cruel yoke of slumlords and their destructive influence, ill-gotten Northside gains appear to flow to exurbia, where a man might be in prison until 2016 but his family still lives like royalty. Not such a hard bargain, really, when you consider how badly many people in the world live, how long some folks have to be away from their family to make a living.

Why didn't the authorities go after the Helgason lake home as part of the legal action against Jon Helgason? (Click here for a "consent order" where Helgason admits to being a no-good scammer and gives up his license) The value of this property could do much to compensate the victims of the T.J. Waconia fraud. I'm just saying.



Here, above, is the mailbox for the Helgason family. There are some messed up metal numbers hanging off the box, but the box bears no name. A neighbor going by on a snowmobile was unaware that a jailbird was associated with this property. Now he's aware.



From speaking to the snowmobiler, I found out there is no public access to get to the lake--a situation I find unconscionable in Minnesota, where lakes are supposed to be a public resource and often the DNR finds a way to create at least ONE public access to a lake, so the lake itself doesn't become, in effect, the private holdings of only the individuals who live on the shore.

In any case, I realized I couldn't enter the Helgason turf without trespassing (and let's call the property what it is--the HELGASON property--despite this thin and cynical corporate charade of "KCH Holdings, LLC") but if I could get access to the lake, I could walk on the frozen lake and remain on public property--the lake itself--even if I was mere FEET from their dock. (I couldn't see their dock at that point, but I assume every spectacular lake home has some kind of dock)

But walking on the frozen lake was another matter. I figured sticking near the shore would be the safest and easiest tactic, since even if the ice was thin and mushy I could smash through without much risk, except hypothermia. (And, really, as a native Minnesotan I find mild hypothermia somewhat pleasurable, like being numb with alcohol) The problem was whether the lake shore was CONTINOUS, or did the lake go into some other lake, some inlet, something which would force me to cross ice which concealed deeper water?

Well, I figured I'd find out when I got to that point.

So--over the protests and warnings of my driving companion, Megan Goodmundson, who is NOT FROM MINNESOTA--I found a "fair and square" access point to the lake and walked just a few feet from the shoreline, all along the edge of the lake, toward the spectacular Helgason home in the distance.


One small step for Johnny Northside, I thought...one giant leap for blog-based journalism.

Only feet from the shore, my boot prints would fill with water. I could feel the ice giving way under my feet but, unlike in the movies, you don't really get an auditory warning of lake ice cracking. The ice just gives way. So, all along the shoreline, I went crunching along. In some places, the ice seemed quite solid, but in other places, I was breaking through and sloshing all the way where the lake was only a few inches deep.



And then I got to this area, above. A swampy inlet, where water flowed out of the lake into the marsh or (more likely, I suspect) out of the marsh into the lake. But the ice here was, for some reason, surprisingly solid.

Obviously, when you see reeds growing, you have an indication of how deep the water may be at that point. Reeds don't have stems 30 feet high, but grow in areas of water just a few feet deep, or even INCHES of water, or--often--right in sloppy lake mud. (And, I've heard it said, "reeds create land." The reed matter keeps dying and turning into soil and, after a while, under the right conditions, a small swamp may dry up or a lake shore may advance farther into the lake. Forgive my enthusiasm for reeds, dear reader, I grew up in backwoods Minnesota swamp land with hundreds of Bohunks who were all my cousins)

But, in the meantime, there I stood on the Helgason's lake, looking at that wide space between the reeds, tracking it with my eye, imagining how it looked in summer. I realized there was some kind of watery inlet between the reeds. The water beneath the ice was clearly deeper in that area. The water might be a mere two or three feet, with reeds cleared away by boats being continuously driven through the inlet. But, I figured, the frozen inlet could be as much as five feet.

Well, maybe six. If the flow of water dug the channel deep, that inlet might be relatively deep.

I snapped photos of the still-distant Helgason house while figuring out what to do. I thought to myself how the character known as "Johnny Northside" was born on a chat thread about T.J. Waconia--a chat thread that grew so hot it radiated an unearthly energy, transforming and changing me into a super blogger. At the same time, arch-villian Jim Watkins was born, the "evil anti-Johnny." This blog and everything it does, everything it represents...it all started with a chat thread about T.J. Waconia on Behind The Mortgage Dot Com.

So, I thought to myself, "he that liveth by the T.J. Waconia fraud scandal, by that same scandal, he shall die." So crossing the ice was probably a really BAD idea, a brazen tempting of destiny.

But then I remembered stuff from my days as a Boy Scout--I achieved the undistinguished rank of Tenderfoot, but practically MEMORIZED AND ATE the entire Boy Scout Manual, both the 1970s version and the 1950s version--stuff about rescuing people who break through ice, and how to survive if you break through ice yourself. I figured if I was going to cross the frozen inlet--and I knew I was going to, the crazy urge was rising up in me the longer I stared at that luxurious lake home--then I should distribute my weight and ARMY CRAWL ACROSS THE ICE.

I put the camera in front of me--the same way a soldier keeps his weapon in front as he army crawls--telling myself that if I felt the ice give way, I would hurl the camera forward hard in that moment. Also, I thought to myself, I would keep going FORWARD instead of trying to retreat. Even if I got soaked with water, I'd still find a way to get to the other side and take my pictures. I'd just have to figure out how to get off the lake by another route once I already had my pictures.

Fortunately, I'd already made preparations by leaving my wallet with my friend, Megan Goodmundson, taking only my drivers license in case I were put in a situation where I had to identify myself.

And so--there on where "Swamp of Fraud" flows into "Lake Helgason," I got down on my belly like a snake and--not even daring to get up on knees or elbows--I writhed my way across the frozen inlet to the other side of the reeds.

Pleased with the success of my strategy, I walked all the way to the shoreline in front of the Helgason house and snapped pictures. Nobody seemed to be at home, but a large dog barked constantly. I noticed a paddle boat on the snowy lakeshore, right next to a nice and adequate dock, partly pulled ashore for the winter. A wooden bench with wrought-iron features sat on the end of the dock. What a lovely place to fish, I thought. What a lovely place to IMAGINE you are fishing while serving a prison sentence, I thought.

On the way back, retracing my route, I thought I was in the clear at the other side of the swampy inlet. But when I stood up, my right leg smashed through the ice all the way to above my knee. I felt the bottom of the lake beneath my foot, so the water wasn't THAT deep, at least not at the point where I smashed in.

My camera hit the snow as I fell forward, but I lunged toward the safety of "shallow ice." Soaking wet, I thought first of the snowy camera and the precious pictures it contained. Unable to shake all the melty snow loose, I actually LICKED the snow off the camera.

I wrung some water out of the leg of my pants, and pressed on. A short time later, I bought some long underwear and wool socks at the local CENEX gas station, made do with my damp boots and pants, and had a steak dinner at a place called Trappers. The camera was fine. The pictures were fine. The steak was pretty good, too.

I wondered if Jon Helgason had ever eaten at Trappers.

So, what do we learn from all this?

THE HELGASONS HAVE A SPECTACULAR LAKE HOME DESPITE ALL THE FRAUD, ALL THE VICTIMIZATION OF NORTH MINNEAPOLIS, AND DESPITE RECEIVING A LONG PRISON SENTENCE.

TAKE A LOOK AT THE PICTURE AT THE TOP OF THIS BLOG POST.

SOMETHING IS VERY WRONG WITH THIS PICTURE.