By Jesse Marx
By Chris Parker
By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
On March 31, the atmosphere in the courtroom of Winona District Court Judge Lawrence T. Collins was just this side of Mayberry. All morning, a procession of wholesome-looking defendants shuffled to the podium, where they entered their pleas or expressed remorse or received their sentences.
A Winona State baseball player fumblingly admitted to his third underage drinking offense in as many months.
A neatly dressed young man confessed he had argued a little too loudly with some fellows at a bar downtown. A fresh-faced St. Mary's senior straightened her blouse, fixed her hair, and quietly owned up to a drunk-driving charge.
So it went, until the clerk called the case of Carl August Fratzke, Jr.
With his wire-framed glasses, silver pompadour and sport coat, the 59-year-old Fratzke looked like he belonged at the Rotarians' pancake breakfast, not in criminal court. And if his appearance was vaguely incongruous, his offenses were doubly so.
In this tightly knit river town, Fratzke has played the part of the respectable salesman/family man for most of his adult life. For years, he served as the president of the Winona Glove Company. When the domestic apparel manufacturing business tanked in the early '90s, he set up shop as a glove wholesaler, running Fratzke Sales, Inc. out of his home. Occasionally, he lectured for business classes at the local college.
But, as many in Winona's business community learned, Fratzke is a more complicated creature than he appeared, a peculiar amalgam of victim and perpetrator, sucker and swindler. According to Winona County Attorney Chuck MacLean, he engineered the biggest financial fraud in the county in recent memory, possibly ever. In a brazen, if poorly conceived, scheme, he conned seven local businessmen out of approximately $250,000--only to be hustled out of every ill-gotten penny.
"This is a case of abuse of trust, abuse of friendship," MacLean said before reading one of seven victim-impact statements that were entered into the court record. "Carl Fratzke is a liar and thief," wrote one of the victims. "And Carl Fratzke is only sorry that he got caught."
Fratzke's appearance before Judge Collins represented the culmination of a sorry misadventure that commenced about 15 years ago, when he received an intriguing business proposal via fax from Nigeria. All the details of that initial contact are not available. (Fratzke was unwilling to discuss his case before his sentencing; his attorney, J.P. Plachecki, says he knows little about the origin of his client's troubles).
It seems Fratzke was lured into a standard variation of one of the oldest con games going, a so-called advance fee fraud, in which scam artists contact their marks with a promise of incredible returns on a relatively modest up-front investment (thanks to the Internet these communiqués, which invariably contain an element of urgency, have become ubiquitous).
According to one Fratzke family member who did not wish to be identified, Fratzke's swindler claimed to be a treasury department official with the Nigerian government. The pitch worked like this: The Nigerian government, the "official" wrote, had millions of dollars of outstanding debt to a foreign company. For an up-front fee, the official promised to put in the fix to have the debt reassigned to Fratzke's company. The official gets his cut, Fratzke gets his millions, and the other company...well, who cares?
Fratzke swallowed it whole. From the late 1980s until 2001, he regularly wired money to the scammers. All totaled, Fratzke poured an estimated half-million dollars of his own money into the deal. Despite draining his IRAs and savings accounts, he never saw a nickel in return.
By the winter of 2000, Fratzke was desperate. He still believed in the Nigerians, but needed more money. So he hatched a plan. Between March and April of that year, Fratzke contacted friends, business associates, and family members to invite them in on a more traditional deal.
Fratzke told prospective partners that he had a line on a $500,000 lot of closeout gloves, which he had arranged to sell to Wal-Mart for $1.2 million. The problem, he said, was that he didn't have enough money to make the buy. If people invested, though, he could double their money in 30 days.
Within a month, Fratzke had raised at least $200,000 from seven investors. According to prosecutor MacLean, the real amount was probably higher, because Fratzke also solicited money from family members and others who declined to press charges.
There was no glove deal.
Fratzke simply poured the proceeds back into the Nigerian con, wiring the money overseas and waiting for a return that never came. Amazingly, he was able to keep his creditors (and his own doubt) at bay for the next year. According to court records, he offered a variety of excuses and explanations for his failure to come through with the promised returns.
By the winter of 2001, Fratzke had grown increasingly reckless. That February, he wrote approximately $50,000 of worthless checks to pay for wire transfers to his Nigerian "partners." The proprietors of the wire transfer service, Yellow Cab of Winona, knew Fratzke, so they didn't demand that his checks clear before wiring the money. As a result, MacLean says Yellow Cab nearly went bankrupt.