A con man conned in Winona

Carl Fratzke fell for one of the oldest cons in the book. Then he came up with one of his own.

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.

To fool or be fooled: Carl Fratzke learned that Winona can be one lonely place
City Pages Photo Illustration
To fool or be fooled: Carl Fratzke learned that Winona can be one lonely place

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.

As it turned out, that was Fratzke's last con. By May 2001, five of Fratzke's victims had finally had enough, swallowed their embarrassment and marched down to the Winona Police Department to file complaints.

As the legal net began closing in on him, Fratzke realized that he too had been taken, even though it required a fair amount of persuasion for the message to sink through. "We didn't find out about any of this until about four months before it all came to a head," the family member says. "Finally I did some research and showed him all the articles about these Nigerian cons. After reading all that stuff, he just said, 'Oh, shit.'"

How could Fratzke, by all appearances a reasonably intelligent, educated and competent businessman, fall for the con in the first place? That remains a mystery. No one, even in his own family, seems to have much insight, other than to suggest that he had a gambling streak and liked the idea of a big score.

Having squandered his life savings and stolen from his friends, he simply kept believing. In one journal entry written shortly before his arrest (and cited in the criminal complaint), Fratzke despaired, "At least three times I was within a hairs breath [sic] of getting my money."

As it turns out, it's not uncommon for victims of fraud to maintain an irrational belief in the con. In the new book Drake's Fortune, author Richard Rayner details the case of Oscar Hartzell. During the 1920s and '30s, Hartzell scammed as many as 100,000 Midwesterners out of their life savings, claiming he could get them a piece of the Sir Francis Drake estate in exchange for an up-front investment.

When Hartzell's fraud was revealed, many of his victims stood by him. They were unable to accept that they had been duped, the facts be damned. As Raynor observes, "The con man's will to deceive is matched and enabled by his suckers' urge to believe."

The parallels don't end there. Like Fratzke, Hartzell started out as a victim of the con before becoming a swindler himself. Unlike Fratzke, however, Hartzell proved especially adept. He stole the con out from under the noses of his victimizers, improved it, and then strung out his own victims for more than two decades.

According to FBI special agent Paul McCabe, it is not uncommon for victims of financial fraud to turn to crime themselves. "We see it all the time. When you arrest these people, they know they've done wrong but they're frustrated because they've lost so much money," he observes.

In the end, Fratzke pleaded guilty to one felony count of theft by check and two counts of felony theft by swindle. Judge Collins sentenced him to a minimum of 240 days in the Winona County Jail, placed him on 20 years' probation, and ordered him to adhere to an as-yet-unspecified restitution schedule. Whether he will be able to pay off his debts is unknown. After his arrest, Fratzke and his wife Rosalie divorced. She got the house in the settlement. The rest of his assets were squandered in the scam. According to MacLean, Fratzke has only worked sparingly since the fraud was uncovered two years ago.

Ironically, the Fratzke family member says incarceration may prove to be something of a relief for Fratzke. "This pretty much destroyed him, so I don't think going to jail is going to be that big a deal for him," he says. "For the last three years, he's been serving a prison sentence in his house. You know, Winona is a small community. After you've had your name plastered all over the newspaper, you don't even want to go out in public any more."

As wretchedly as events turned out for Fratzke, it could have been worse. During the endgame of some Nigerian-based cons, marks are urged to travel to the capital city of Lagos to seal the "deals." Once there, they are sometimes kidnapped, bribed, even murdered. Since 1995, according to a U.S. Secret Service report, at least 15 Americans have been killed or disappeared after being sucked into such cons.

McCabe says he recently heard the story of one unlucky American victim who traveled to Nigeria in an effort to recoup some losses. "He wound up at the front gates of the American embassy, completely naked," he says. "They'd taken everything: passport, money, clothing. Everything."

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