Eden Prairie contractor guilty of swindling remodeling customers

Wednesday, March 07, 2018

A Hennepin County District Court jury convicted a local building contractor on two counts of theft by swindle over $35,000 and one count of nonpayment for improvement, Hennepin County Attorney Mike Freeman announced Wednesday.

The jury took about two-and-a-half days to convict Daniel Baker, 51, of Lakeville. After returning the verdict Tuesday afternoon, they heard arguments about whether there were aggravating circumstances that would allow Hennepin County District Court Judge William Koch to impose a more severe sentence.

Those circumstances were that there were multiple victims, that there were multiple incidents per victim, that the scheme was highly sophisticated, that Baker used a position of trust to further the crime and that loss to the subcontractors was substantially more than $5,000. The jury returned its answers Wednesday morning and agreed only that there were multiple victims on all of the counts. On the last count, the jury also found there were multiple incidents per victim and the amount was substantially more than $5,000.

Sentencing is set for May 11. The Minnesota Sentencing Guidelines recommends probation but also potentially one year in the county workhouse. Both sides will argue the sentence before Judge Koch.

“These contractor cases are difficult ones because we have to prove Mr. Baker wasn’t just a bad businessman, but was actually defrauding our victims,” Freeman said. “Great work by our prosecutors in a three-week trial on behalf of the 14 victimized homeowners, contractors and laborers. Baker cheated them all.”

Baker owned Lifestyle Basements of Eden Prairie and Eden Prairie Police Department began receiving complaints about work that had not been done in 2014 and 2015 in Hennepin, Dakota, Scott and Carver Counties. In every case, the homeowners entered into an agreement with Baker or his company and provided a down payment. At first, there were long delays but the work was mostly completed, although the homeowners had liens placed on their properties because Baker did not pay the subcontractors.

Later in 2014 and into 2015, the situation worsened. Little or no work was being done, the subcontractors and suppliers were not paid and liens were placed on the homes because of the nonpayment. At the very end, the homeowners were forced to hire a new contractor and essentially pay for everything twice. Testimony in court showed that Baker was running a Ponzi scheme, using down payments from new jobs to pay for the older jobs.

For instance, in one case, a couple made five payments to Baker from January through April 2014 totaling $108,319. The work started on time but then ran into long delays where Baker told the couple that some of the building materials were not available at the moment. They later learned that was false. In addition, one of the subcontractors contacted the couple demanding payment, which should have come from Baker, but didn’t. Ultimately, the couple paid for some of the materials and subcontractors, in essence paying twice.

During the trial, victims told about significant financial hardship caused by Baker's crimes, including running up high credit card debt and cashing in savings and 401K accounts.

The jury acquitted Baker of two counts of theft by swindle for contracts and work done in early to middle 2014. The guilty verdicts on two counts of theft by swindle over $35,000 were for contracts and work done in late 2014 and 2015. The count of nonpayment for improvement was for failing to pay the subcontractors and the businesses that sold materials for the projects. 

Baker Criminal Complaint (PDF)