Washington County jury convicts man of tax crimes, swindling short-term renters

A Washington County man who ran a short-term rental business at his properties for weddings and other gatherings has been found guilty of swindling customers and tax-related crimes.

Jurors deliberated for about four hours Friday before convicting 56-year-old Karl Evald Auleciems of all 16 charges against him: eight counts of failing to pay or collect or remit sales tax between February 2018 and February 2020, six counts of filing a false or fraudulent return between October 2015 and February 2020 and two counts of theft by swindle for failing to return to customers damage deposits between December 2018 and October 2019.

The four-day trial was heard before Washington County District Judge Douglas Meslow, who set sentencing for Dec. 15.

The Washington County attorney’s office originally charged Auleciems in August 2021 with 74 counts of alleged tax-related violations and one count of theft by swindle. The charges were reduced to 16 at the time of trial in “consideration of presumptive consequence upon conviction, judicial resources and judicial efficiency,” the attorney’s office said in a statement Wednesday.

According to the criminal complaint, Auleciems operated an unregistered business, KEASons Enterprises, which he used as a conduit to rent out his West Lakeland Township house and other properties to short-term renters via Airbnb, HomeAway, Vrbo and other websites.

An investigator with the Minnesota Department of Revenue began looking into alleged tax violations by Auleciems in July 2019.

The investigation determined Auleciems filed false income tax returns by omitting the sale of rental property, omitting consignment business income, omitting substantial amounts of rental income, overstating mortgage interest and property taxes, omitting interest and dividends and creating fictitious net operating losses, the complaint says.

Meanwhile, rental agreements stated the nearly $2,000 security deposit would be refunded within 90 days of checkout, according to the complaint. But Auleciems failed to return security deposits amounting to nearly $18,000 “without explanation or proof of damage,” the complaint states.

Auleciems’ attorney, Robert Ambrose, declined to comment on the verdict Wednesday.

Auleciems faces a maximum of 10 years prison and a $20,000 fine on each theft by swindle conviction and five years in prison and a $10,000 fine on the tax-related convictions.

“We are pleased that the court held Mr. Auleciems accountable for swindling innocent, trusting short-term renters out of thousands of dollars and deliberately refusing to pay taxes like the rest of law-abiding society,” County Attorney Kevin Magnuson said in the statement. “This office will continue to ensure that criminals like Mr. Auleciems face the consequences of their actions by vigorously prosecuting those who exploit the trust of others for personal gain.”

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