Former owner of old Woodburn City Hall charged with fraud and theft by Clackamas County

CLACKAMAS COUNTY JAIL - Business owner James Frackowiak was arrested April 2 and charged with fraud and theft.Clackamas County Sheriff's detectives are seeking further victims in a fraudulent investment scheme operated by the former owner of Woodburn's old City Hall, James Frackowiak.

Frackowiak was arrested and booked into Clackamas County Jail April 2, accused of felony fraud and theft of hundreds of thousand of dollars from an elderly Clackamas County couple. Detectives began an investigation of Frackowiak after the couple's granddaughter alerted the Clackamas County Sheriff's Office to possible fraud in April 2017, according to a sheriff's office press release April 26.

Frackowiak is accused of running a fraudulent insurance scheme since 2007, when he first met and befriended the victim couple, according to the sheriff's office. He ran his insurance business under the names Plan It Financial and Frack Insurance, and in 2013 created Frack Income Fund LLC, an insurance fund which promised investors an 8 percent return after five years. The victim couple invested in Frackowiak's funds, losing money each time they surrendered their policies and paying a large commission to Frackowiak, according to the sheriff's office.

Detectives believe Frackowiak used the couple's money on his own businesses Plan It Financial and Frack Burger, which both closed in 2016.

The Clackamas County Grand Jury filed a secret indictment against Frackowiak in Clackamas County Circuit Court in Oregon City March 29. He was charged with three counts of securities fraud worth $50,000 or more and eight counts of aggravated theft worth $10,000 or more.

Frackowiak was released from Clackamas County Jail April 3 with a first pretrial hearing set for May 15.

Frackowiak's companies and business dealings have broken the law several times in past years.

He lost the historic old Woodburn City Hall to foreclosure in 2017 and in 2016 his restaurant chain Frack Burger closed down amid a storm of lawsuits, including unpaid wages and sexual assault against an employee by a manager.

Frackowiak bought the old Woodburn City Hall on First Street and the derelict former gas station next door in 2012.

At the time Frackowiak said he planned to turn old City Hall into office space and move one of his Frack Burger franchises in to the ground floor. He even received a $25,000 grant from the state to redevelop the property.

Frackowiak eventually put the two properties up for sale as a package deal for $1 million, but in 2017 the old city hall property was foreclosed. Frackowiak owed over $23,000 in unpaid taxes and over $370,000 in unpaid obligations from the deed of trust.

Frackowiak ran his insurance business Plan It Financial out of the gas station for several years, until his business license was revoked by the Oregon Department of Consumer and Business Services for fraud March 13, 2017. The division found that on 12 occasions, Frackowiak and Plan It Financial deposited premium funds into business accounts instead of in a trust account, as required by state law. In addition, after not providing insurance, Frackowiak did not refund customers' premium payments within 30 days, which violated state law.

Frackowiak was fined $14,000 and ordered to return $4,275 in premium payments to customers he defrauded, according to a State of Oregon press release.

The old City Hall building was eventually sold to a developer from Gresham, but the service station at Grant and First streets remained in Frackowiak's ownership.

According to the Marion County Assessor's Office the gas station is now owned by Karen Frackowiak, and the property is currently listed for sale online for $250,000 by several realty agencies.

Detectives would like to hear from anyone who had dealings with the Frack Income Fund, LLC. Anyone with information is urged to contact the sheriff's office tip line, by phone at 503-723-4949 or by using the online email form at Reference CCSO Case No. 17-009525.

Patrick Evans



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