Michael Hudalla plays fast and loose
Michael Hudalla gripped the handlebars and relaxed his knees, bracing for the curve. It was a hot summer day and the road coiled with twists and turns. His fire-engine-red Ducati spewed a shuddering, violent thunder as though heralding the apocalypse.
On this screaming, wild machine, Hudalla traversed the 1,242 miles to Orlando, Florida, for the annual Yamaha sales conference, to buy bikes to sell at his Minneapolis dealership, Trackstar Motorsports.
Hudalla owned the coolest cycle shop in the Midwest and boasted the broadest selection of café motorcycles: Ducati, Moto Guzzi, Laverda, and Triumphs from Europe, along with Yamahas and Suzukis from Japan.
Each weekend, the dealership brimmed with men clad in rock 'n' roll T-shirts, leather jackets, and knee sliders scuffed from scraping the ground on tight corners.
"Michael was—and attracted—a lot of extremely talented motorcyclists who loved to race," says Jim Schwebel, an attorney and Trackstar customer. "These guys were like the NASCAR racers: They were young, clean, lean, and lived for speed."
Hudalla had a way of making people feel at home when they came by the shop. Bouncers and mechanics liked being around the store so much they volunteered to work for him in return for a discount on merchandise.
Hudalla was a celebrity in local cycle circles. At events like the Blind Lizard Rally on Nicollet Island, he was feted as the pope.
"Being with Michael gave us this elite status," says Jay Golden, one of his best friends at the time. "It was kind of like being a rock star."
Hudalla wore expensive clothes, lived in a Mendota Heights mansion, and zipped around town in a bright yellow Ferrari. Even his petite wife fit the fantasy: a sales rep for Yamaha, she shared his love of bikes.
Hudalla's life seemed too good to be true. Turns out it was.
Last October, Hennepin County prosecutors charged Hudalla with two felony counts of racketeering in connection with a series of bizarre financial transactions at his company, Enzo Mortgage Group. The firm—likely named for racing magnate Enzo Anselmo Ferrari—was Hudalla's biggest venture.
Court documents allege Hudalla 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.
Now Hudalla's many friends in the local motorcycle community are trying to make sense of his secret life.
Says Tracy Wall, who dated him briefly in the late '80s, "I was surprised he did it to his friends."
MICHAEL HUDALLA CUT an imposing figure as a bouncer of the Uptown Bar in the late 1980s.
Cruising the usual lunch crowd one day, he sidled into a black vinyl booth across from Scott Halverson, a rugged 26-year-old who had been spending a lot of time in the neighborhood since moving back from New York.
Hudalla offered good news: There was an opening for a bouncer if Halverson was interested. But then the conversation took an oddly personal turn.
In a flat affect, Hudalla casually mentioned that he couldn't go home to Ohio. When Halverson asked why, Hudalla explained that his whole family had burned to death in a tragic fire, and the memory of the incident was too traumatic to relive.
So it came as quite a surprise some years later when Hudalla offered him another job: working for Hudalla's mom.
Sure enough, when Halverson showed up for the first day of training, Mrs. Hudalla had skin like that in a Dove commercial—no scars or any other evidence of having survived a fire.
"She certainly didn't look like she was dead," Halverson says. "I'm no doctor, but I would have to say he was perhaps a pathological liar."
Broad-shouldered and towering over six feet tall, Hudalla would have made for an intimidating bouncer if he weren't trying to be everybody's friend.
"He was definitely a guy that most people knew," says Halverson. "He was a very gregarious, friendly guy and he was at the door at the Uptown Bar a lot."
Late at night, after the bands went home and the bar closed, Hudalla kept the good times going. He'd coax stragglers to ride up to Duluth, arriving just in time to catch the sunrise over a cup of coffee.
One weekend, he and a dozen bikers took an impromptu camping trip to Carleton Peak near Tofte. They biked at night and pitched their tents in the dark. They zoomed to Clyde's Fisherman Bar in Grand Marais to play pool, then raced back to Minneapolis just in time for work on Sunday.
"It was kind of this raucous, boho scene of alt people," says Kurt Kueffner, a bike enthusiast. "It was a really attractive and seductive kind of culture."
Weekends, Hudalla and his café motorcycle crew could be found at Bob's Java Hut on Lyndale Avenue. In the afternoons, they played pinball at the CC Club. Nights were spent at the Uptown or First Avenue.
"It was the same thing, week after week, but it was great," says Leah Wilkes, an Uptown waitress and one of the few women in the group. "It was a good community to hang out in."
Hudalla was an ideas guy, an entrepreneur by nature. After a while, he hatched a plan to turn his motorcycle lifestyle into a business.
Hudalla paid a visit to Marty Mataya, a gifted mechanic who owned the only Moto Guzzi repair shop in the state: a tiny, two-room affair in Anoka called Trackstar Motorsports. Hudalla proposed that they bring Trackstar to Minneapolis. The men shook on the deal.
For their third business partner, Hudalla recruited Tom Manley, a mechanic and bouncer at the Uptown who'd saved $7,000 toward opening his own cycle shop.
"When he approached me, I thought it might not be such a bad thing," Manley says. "This might be a more affordable way for me to go into business for myself and stop working for other people."
Manley threw his savings in, and Mike Weston—the son of the founder of the restaurant Fuji Ya—became a silent partner with a $35,000 cash investment and a $50,000 line of credit through Deutsche Financial Services.
The group bought a small, beat-up Yamaha dealership on 42nd and Cedar and painted the ceiling black. On a warm summer day in 1994, Trackstar Motorsports opened for business.
FROM THE BEGINNING, Trackstar was more than just a dealership—it was a clubhouse. Hudalla treated customers like personal friends.
"The thing about Michael is he's a really smooth operator," says Golden. "He makes you feel really good about yourself. He's a great talker, and a great storyteller."
The shop quickly developed a following. Manley and Mataya hustled in the garage while Hudalla tended the sales floor and the books. The partners all agreed to paltry paychecks of $500 every two weeks while they poured the profits back into the store.
"We were number one in Triumph and number one in Ducati sales," says Stephanie Anderson, the controller.
But underneath its shiny facade, Trackstar faced serious financial problems. Hudalla filled the showroom wall-to-wall with bikes. The longer they stayed on the floor, the higher the interest payments to Deutsche bank.
About a year after the dealership opened in Minneapolis, Manley strode to the back office to collect his tiny paycheck. But this time, the money wasn't there. Confused, he asked for an explanation. Hudalla didn't have a good one.
"It became clear that there was money coming in, and none of it was making its way back to me, or to Marty, or really, in any capacity, to any of our employees," Manley says. "There was one excuse after another why this was late, or that was late."
Then Manley found out something that really pissed him off. While he'd been living off $500 checks, Hudalla had spent $19,000 remodeling his kitchen.
Disgusted, Manley left the business in 1995. Weston, the silent partner, soon followed.
Hudalla hardly seemed bothered—in fact, he was already planning his next big move.
"We refer to Michael as 'Teflon'—nothing stuck to him," says Joe Anderson, a Trackstar salesman. "It didn't seem like anything bugged him."
One afternoon Hudalla had lunch with motorcycle mechanic Lewis Lakey, who owns Roy's Repair. Lakey described a business proposal: He wanted to build a motorcycle mall, a singular destination like Cabela's is for outdoorsmen. Lakey thought Hudalla would make a good business partner.
But Hudalla decided to do it alone. He bought the old warehouse on 32nd and Snelling 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.
"You also kind of knew that he wanted to be bigger than he was," says Marty Leir, Hudalla's former roommate. "He wanted to be a wheeler-dealer."
The shop got off to a great start. One afternoon, a bus pulled up and Lyle Lovett stepped out. Hudalla attended him personally, and, his friends say, gave Lovett a hefty discount.
Long known for his outlandish tales, Hudalla couldn't resist gilding the lily in describing his motorcycle Xanadu. When a writer from a trade magazine interviewed him, Hudalla bizarrely claimed that the shop had an in-house masseuse.
"We didn't have a massage therapist," says Tom Dale, the tailor who worked at the mall. "He said we had a massage therapist, but he didn't mention Tom the Tailor!"
Even when Trackstar was floundering, Hudalla always seemed flush. He flew to Italy to see the latest motorcycle merchandise and dressed in expensive clothes, all the while driving the latest, coolest bike.
In the summer of 2001, rumors began circulating among employees that the shop was in financial trouble. A few months later, Hudalla made a big announcement: Trackstar was closing its doors. Hudalla and Mataya filed for bankruptcy.
Only after it was all over did Mataya begin to suspect why the dealership had failed.
"Probably a lot of that went into Michael's pocket," Mataya says.
One day a few weeks after Trackstar closed, Manley was flipping through his mail when he came across an official-looking envelope from Deutsche bank. The letter inside contained shocking news: The bank was suing him for $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."
After months on the phone and thousands of dollars in attorney's fees, Manley finally filed for bankruptcy.
"Can you see why I have a little animosity toward Mike?" he says.
WHEN HIS PHONE RANG, Dick Brown answered. Hudalla was on the line, and Brown was hoping he had good news.
For months, he'd been complaining about his paltry retirement savings. He knew the $60,000 he'd saved was far too little.
Hudalla pitched a way Brown might now retire comfortably: investment properties. Hudalla promised to help Brown find renters and loan him the extra money for the down payments. All Brown had to do was sign a few papers.
"He set it in motion," Brown says. "It was like any house closing: Sign this here, sign that, initial this, date that."
By 2007, Hudalla was CEO and owner of Enzo Mortgage Group in downtown St. Paul. The fantastic investment he had for Brown turned out to be three townhomes in Oak Park Heights, a village near the Wisconsin border, where the second-biggest employer is the nearby state prison.
Brown took out $814,000 in loans. Hudalla's colleagues wired money for the down payments to Brown's bank account, and Hudalla allegedly collected commissions of 16 to 26 percent of the purchase price—about $230,000 in total—when the sales closed, according to court documents.
At first, it wasn't hard to find renters. Hudalla kept the properties leased and everything was going fine.
But in 2008, the economy tanked and housing prices collapsed. Suddenly, Brown couldn't find tenants.
"One guy bought a house, I think it was like three doors down, and he was paying $500 a month less than I was charging him for rent," Brown says. "How the hell am I supposed to compete with that?"
Within the year, Washington County foreclosed on all three of Brown's properties. His small nest egg squandered, Brown was forced to file for bankruptcy.
"When we were at Trackstar, I was his best unpaid employee," says Brown. "We'd go in there Saturday morning and have some donuts and hot dogs or whatever was on the grill for the day, and shoot the shit about motorcycling. End of day comes around, and we all went for a ride."
IN EARLY OCTOBER, an official-looking piece of mail arrived at the seven-bedroom, four-bath Mendota Heights home where Hudalla lived. It was a court summons.
The letter leveled two felony racketeering charges against the former motorcycle king. The first count accused Hudalla of 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.
Both charges carry heavy penalties that could land Hudalla in prison for 40 years.
Hudalla's next scheduled appearance in Hennepin County District Court is May 31. No trial date has yet been set.
For now, he's a free man. Although Enzo folded about the time that the criminal charges became public, Hudalla now works for Acceptance Capital Mortgage Corporation, a firm based in Spokane, Washington. The company is licensed to do business in Minnesota, and Hudalla is listed as a branch manager.
He works from the Mendota Heights mansion he shares with his girlfriend and three children: a 12-year-old daughter, an 8-year-old son, and a new baby.
"I have a lot to say about the Enzo case," Hudalla wrote in an email "However, until I speak with my attorney that topic will be off the table—sorry."
Hudalla's attorney, a Hennepin County public defender, advised him not to speak and declined to talk about the case himself.
Friends say that Hudalla seems unfazed by the possibility of spending four decades in prison. He recently bragged of selling millions' worth of product. Bankruptcy paperwork, however, places his income last year at a modest $37,000.
"Michael makes it sound like he's really facing nothing more than a minor inconvenience," says Leir. "Like a DWI."
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