Need More Karma
It was a fair day on Tuesday May 18 when federal agents from the IRS and U.S. Postal Inspector poured into Butler North and raided Swervo Development Corp. Diners on Bar 508‘s sidewalk patio forked cautiously at their plates as agents, protected by MPD officers, processioned numerous boxes into a waiting van.
As soon as the spectacle was over, the media stormed in. Ned Abdul, the commercial real estate magnate of Downtown, was on the verge of becoming the next Tom Petters.
The affidavit filed by Mary Agnew, an inspector for the U.S. Postal Inspection Service, describes a web of deception. The two men skimmed cash from the various nightclubs for Abdul’s personal use and to pay subcontractors on their building projects in cash, according to the affidavit. Agnew said she reviewed the tax returns for Epic Entertainment for 2007 and 2008 and that the club lost about $70,000 and $278,000 in those years.
Of course to many Minneapolitans, Ned Abdul (or Nedal Abdul-Hajj) is renown for less than savory real estate deals and questionable rental renovations which have dotted every neighborhood in the city. When MinnPost’s David Brauer was President of Kingfield neighborhood, he left no stone unturned when it came to Ned’s private market “affordable housing” efforts. Of course its true the prolific developer is shrewd in dealings and has preserved many demolition-ready properties. But perhaps warning signs should have gone off before the housing bubble burst when his defunct Abul-Hajj Group was accused, though never convicted of, mortgage fraud conspiracy.
It’s interesting that partner John Barlow is also allegedly “skimming” cash as well since he forcefully came out to City Pages in March against Councilmember Lisa Goodman’s ban of 18+ shows Downtown. He said Epic would “lose anywhere from $50,000 to $100,000 per month.” Seems like Epic lost that money without the ban. Barlow’s outspoken nature was first discovered by ravenous news media in the late ’90s during his sexual harassment trial with a fellow Brooklyn Center policewoman, of which he was acquitted of all charges. The former cop’s brazen attitude and mouth hasn’t gone away. Perfect Porridge’s Greg Swan was critical of Epic’s redesign of the former Quest nightclub and a fellow blogger sent an email to Barlow who replied with two simple words, “blow me.”
With today’s revelations, the question now falls on the status of Epic and Karma nightclubs, some of the best venues in the Warehouse District. Local music icon Beecher Vaillancourt, now Epic’s general manager, was quoted by the Strib in May saying Epic was “business as usual.” Hopefully Vaillancourt won’t undergo another tumultuous change-up, as was his forced buyout in the former Foundation Nightclub two years ago.
Clubbers should probably ignore the warning signs and continue partying. Others should be worried, especially the city of Brooklyn Park who oversaw Ned’s purchase of a corporate center this spring. MSP Business Journal ran a story in March that quoted investment broker Mark Kolsrud praising the deal, “What stood out in the bidding process was Swervo’s ability to close quickly, pay cash and complete his due diligence quickly.” Paying cash quickly seems to be on the path of the Bodhisattva these days.