Internet fraud is being taken more and more seriously these days. Sounds like a job for the feds.

Federal Bureau of Investigation
111 Washington Ave S # 1100
Minneapolis, MN 55401
Phone: (612) 376-3200

Or at least the local PD. They should have an internet fraud investigator as well.

I've personally reported a similar situation due to an occurance on another message board, and I can tell you from that experience, the police do not look favorably on anyone who tries to get away with such things.