Former Minnesota dealer faces racketeering charges

admin

A former Minneapolis dealer is facing two felony counts of racketeering in connection with a series of financial transactions at his biggest venture, Enzo Mortgage Group.

Court documents allege Michael Hudalla, former owner of Trackstar Motorsports, made at least $317,000 in illegal kickbacks at the expense of multiple victims. If convicted, he could face penalties of $2 million and up to 40 years in prison, according to the the Minneapolis Citypages.

Trackstar had a reputation as the coolest cycle shop in the Midwest because of its broad selection of café motorcycles: Ducati, Moto Guzzi, Laverda, Triumphs, Yamahas and Suzukis. His wife was a sales rep for Yamaha. But court papers reveal a troubled history.

In 1994 he and two partners – Marty Mataya and Tom Manley – agreed to move Trackstar Motorsports, the area’s only Moto Guzzi dealer, from Anoka to Minneapolis. Manley and Mataya put in some of their own money and agreed to take salaries of just $250 a week so profits could go back into the business. A silent partner, Michael Weston, invested $35,000 and put up a $50,000 line of credit. "We were number one in Triumph and number one in Ducati sales," the dealership’s controller, Stephanie Anderson, told the publication. But floorplan costs were a burden and the dealership started to struggle. Manley left the business in 1995, after finding out Hudalla had done a $19,000 kitchen remodel while Manley was taking home $250 a week, and Weston bowed out soon after.

Louis Lakey, owner of Roy’s Repair, approached Hudalla about teaming up to build a motorcycle mall, Hudalla decided to do it himself. He bought an old warehouse that Lakey had in mind and renovated it with concrete floors and checker-plate countertops. The mall featured the new Trackstar as well as a leather tailor, an insurance dealer, and a coffee shop called the Motor Oil Café. The venture ultimately failed and the business closed in 2001.

A few weeks later, Manley received a letter from the bank saying he owed $296,000.

"Michael led them to believe I was still involved in the business in 1998, and that I was still one of the guarantors," Manley says. "He sold Suzukis between April and September of 2001 that he didn't pay for—to the tune of $296,000." The debt led to Manley’s bankruptcy.

In 2007 he persuaded another Trackstar denizen to invest in a real estate deal, but that failed when the economy tanked. The partner in that business, Dick Brown, took out $814,000 in loans for three condominiums. He estimates Hudalla pocketed about $230,000 of it in commissions. Brown also ultimately went into bankruptcy.

Last October, Hennepin County prosecutors charged Hudalla with participating in a pattern of criminal activity including theft by swindle and concealing criminal proceeds. The second alleged he knowingly invested criminal proceeds in an enterprise or property.

Hudalla's next scheduled appearance in Hennepin County District Court is May 31. No trial date has yet been set. He faces up to 40 years in prison if he’s convicted.

Posted by Holly Wagner

Like Dealernews’ Facebook page: