Story originally printed in the Winona Daily News or online at www.winonadailynews.com
Published - Tuesday, February 11, 2003
Winona man pleads guilty in $750,000 scam
Nigerian scam artists took Winona businessman Carl Fratzke for $750,000. Unfortunately, a third of that money didn't belong to him.
On Monday morning in Winona District Court, Fratzke, 59, 412 W. Fifth St., admitted to using a scam of his own to raise $207,000 from seven friends and bouncing a $49,259 check at a local business to send to the Nigerian con men.
Testifying before Judge Lawrence T. Collins, Fratzke said he also drained more than $500,000 from his own savings and retirement accounts before he recognized the fraud for what it was.
Fratzke, president of Fratzke Sales, pleaded guilty to two counts of theft by swindle and one count of theft by check.
In March and April 2000, Fratzke approached seven Winona-area people, individuals he described as friends, and offered them an "investment" opportunity that would double their money in a month. He claimed he had a chance to purchase $500,000 worth of gloves that he had arranged to sell to Wal-Mart for $1.2 million.
There was no such glove deal. Fratzke admitted he sent the money to individuals he believed to be officials in the Nigerian government who had invited him to participate in a scheme that promised to yield "quite substantial profit."
"They sent me a facsimile of the check they were going to send me," Fratzke testified. "They said, 'This is coming.' "
In February 2001, Fratzke wrote worthless checks for $49,259 to the Winona Yellow Cab Co. for money orders that where wired overseas to his Nigerian contacts. When the checks were returned, the owners of the cab company went to the police.
"After the (Yellow Cab) thing, the whole thing collapsed right there," Fratzke said. "I didn't know until the bubble burst and the money didn't come."
In the end, Fratzke didn't realize a cent from the scheme.
Winona County Attorney Chuck MacLean said that over the years "hundreds, perhaps thousands" of people had fallen for the Nigerian scheme. The scam promises the eventual victim a sizable percentage of tens or hundreds of millions of dollars for supposed assistance in getting the funds out of the country. Once the scammer has gained his mark's confidence, the mark will be asked to send money for fees, bribes or other expenses in order to bring the multi-million dollar gambit to fruition. When the victim becomes suspicious, the Nigerian accomplices and the money vanish.
The scheme, often referred to as the "419 scam," the name drawn from the section of the Nigerian penal code that deals with it, has been investigated many times, MacLean said. The scam that involved Fratzke has been investigated by federal authorities, he said, and Fratzke has been classified as a victim in the scam. Since there is no extradition agreement between the United States and Nigeria, the authorities have decided not to attempt to prosecute the Nigerians involved.
On March 31, Fratzke will be sentenced for the crimes he committed while attempting to satisfy the demands of the con artists.
He remains free on bond awaiting sentencing.
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