Twin Cities millionaire charged with lifelong tax evasion, allegedly owes Minnesota $357,000

Jeff Day, The Minnesota Star Tribune on Feb 27, 2026

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MINNEAPOLIS — The owner of a Minnesota construction company who has earned millions of dollars in recent years from his business and gambling success has allegedly avoided paying taxes for much of his life.

Richard Ray Hoffman, 48, of St. Louis Park faces 12 felony counts in Hennepin County District Court alleging he failed to to file and pay his taxes in Minnesota from 2019-2025. Messages were left with him seeking comment. No attorney is listed as representing him.

The charges allege that from 2019-2024, Hoffman earned $5.2 million in gross income and owes $356,910 in state income tax for those years. But the charges also allege that Hoffman “has only ever filed one individual income tax return” in 2005 for his 2004 taxes.

Over the last 18 years, the Minnesota Department of Revenue has worked with Hoffman to make him comply with tax laws by “sending letters, calling [Hoffman] and taking collection actions.” In 2013, Hoffman allegedly agreed to pay $200 per month as payment for his outstanding taxes from 2008 and 2009. He never made a payment. From 2013-2025, Hoffman never made contact with the Department of Revenue until he was informed of a criminal investigation into his taxes on July 10.

His company, Midwest Custom Builders, was established in 2005 and worked in remodeling commercial and residential properties and installing fiberoptics. Its license with the Minnesota Secretary of State expired at the end of 2023. The Department of Revenue analyzed Hoffman’s bank accounts and found that from 2019-2024 the bulk of his income came from US Internet Corp., an internet service provider that operates throughout Minnesota. He also won more than $2 million from gambling during those years and placed more than $2.3 million in bets.

His adjusted gross income was: $616,000 in 2019, $734,000 in 2020, $1.1 million in 2021, $878,000 in 2022, $988,000 in 2023 and $862,000 in 2024. His bank records showed “a large amount of discretionary spending on travel, high-end retail shopping and significant gambling.”

During the course of the investigation, it was discovered that Hoffman had met with a tax preparer who provided him with completed individual tax returns in 2015, 2017 and 2018. None were filed. Another tax preparer began meeting with Hoffman in 2024 but Hoffman missed several appointments.

It wasn’t until Hoffman learned about the criminal investigation that he contacted the tax preparer again and provided him with “dozens of letters” from the Department of Revenue and the IRS between 2014 and 2024 regarding missing returns, unpaid taxes and enforced collections.

Hoffman met with Department of Revenue investigators at his home in July and allegedly told them he was working with a tax service to “get things straightened out.” He said he knew he owed taxes and his wife had told him to get it figured out, as well. He said he had no reason for not paying his taxes.

“I just don’t know what I’m doing,” Hoffman allegedly said. “I know they are due. I know I have to pay them. My reasons is, I got overwhelmed. I felt like I got too far behind and didn’t know how to fix it.”

A summons was issued for Hoffman to appear in Hennepin County District Court on March 16.