What started as a wage-theft investigation ended with a Stillwater business owner pleading guilty to tax evasion in Ramsey County.

Todd Andrew Konigson, owner of Stillwater Masonry Restoration Inc., was sentenced Friday to up to three years of probation and ordered to pay about $70,000 to the Minnesota Department of Revenue. He won’t be allowed to work as a residential contractor or remodeler in Minnesota or enter into state contracts during his probation, the Ramsey County Attorney’s Office announced Tuesday.

County Attorney John Choi hired an in-house investigator to work full time on wage-theft investigations; they’ve had a St. Paul police sergeant on board since 2022. The Konigson investigation was the first to reach a conclusion, though Choi noted Tuesday: “We felt like the best avenue of accountability was to pursue the tax violations.”

Konigson’s attorney, Thomas Beito, emphasized Tuesday that his client’s case “has nothing to do with wage theft,” which Konigson wasn’t charged with.

“This certainly was not a multimillion-dollar fraud,” he said. “It turned out to be a $70,000 case that he got behind on his taxes. He didn’t file a return seven years ago. That’s what he pled guilty to, so this was blown out of proportion from day one. … This is much more a run-of-the-mill case than the county attorney would lead people to believe when they charged this.”

Investigations into unrelated people and businesses are ongoing. “We’ve got a lot of cases in the pipeline,” Choi said.

“There’s a whole world of people being exploited, taken advantage of that happens a lot in … construction contracts,” Choi said, adding that he’s putting on notice “contractors who are not paying wages, taking advantage of vulnerable people … that we are investigating these cases, we’re watching, and we’re going to pursue accountability and we’re going to seek restitution.”

Pleaded guilty to 1 charge, 15 dismissed

Prosecutors charged Konigson, 57, in December 2023 with 16 felony tax charges. He lived in Texas when he was charged and now has a Florida address.

The Ramsey County Attorney’s Office started investigating Stillwater Masonry after receiving reports that the business wasn’t paying timely wages while contracted to perform work for the Historic Triune Masonic Temple on Iglehart Avenue in St. Paul’s Merriam Park neighborhood, according to a criminal complaint.

Investigators also identified six civil actions in Minnesota alleging that Stillwater Masonry and Konigson hadn’t paid workers, subcontractors and vendors.

The business registered in Minnesota in 2016, but didn’t file tax returns until 2018. A Minnesota Department of Revenue investigation concluded that Konigson and his business didn’t report at least $2.5 million in income for tax purposes, and didn’t report at least $495,680 in wages paid to employees for withholding tax purposes, the complaint said.

“Oftentimes, tax crimes are thought of as a victimless crime because technically the state of Minnesota is the victim, but in this … type of case, there actually are victims,” said Melanie Leslie, Minnesota Department of Revenue criminal investigation division director.

Union says employees were affected

A union found five employees who lost pension benefits and vacation money for a period of time, said Douglas Schroeder, president/secretary-treasurer of the International Union of Bricklayers & Allied Craftworkers of Minnesota and the Dakotas. Their health care coverage was affected, including for as long as two years. There were a few employees who didn’t get paid, who “were owed thousands of dollars during this process,” Schroeder said.

“We’ve pretty much recouped almost everything, but we don’t know all the employees” who were affected, he said.

Beito said the only group that lost out was the Department of Revenue, “and we’re making them whole through this agreement.”

Konigson pleaded guilty to one count of failure to file a withholding tax return and the other counts were dismissed. His probation will be complete when he pays the restitution to the state Revenue Department and the felony conviction will be reduced to a misdemeanor, Beito said.

Beito said his understanding is that Konigson has no plans to resume his business in Minnesota when he’s allowed to.