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Ex-CIO Dale Frantz led a double life
- — 15 December, 2010 05:53
Former Auto Warehousing Co. CIO Dale Frantz. Before former CIO Dale Frantz was sentenced last week to nearly six years in prison for stealing more than $500,000 from his employer, he wrote the judge in his case a letter.
The letter began: "My name is Dale Frantz and I am a thief."
Frantz the one-time CIO of Auto Warehousing Co. (AWC) in Tacoma, Wash. was "a rising star" who was paid $250,000 a year in salary and bonuses. Thirteen employees at the auto processing company reported to him, and he was trusted by his company and recognized by his peers for his efforts in managing technology .
Among other things, Frantz established himself as an out-of-the-box IT leader, taking his company from PCs to Apple , a move Computerworld reported on extensively . In fact, the public accolades were something prosecutors cited to illustrate the level of trust he had achieved at AWC.
But Frantz, 46, was more than a CIO: He led a double life as an incompetent thief, according to court records.
AWC was the third company Frantz stole from in his career, and it seemed as if he was always getting caught.
At AWC, Frantz either wrote up fake invoices or altered them in a way that inflated prices. He also worked with a co-conspirator to create a fake company to generate invoices for services that were never delivered.
"I have struggled with stealing throughout most of my adult life," he wrote in his letter to Tacoma federal court Judge Robert Bryan just before his sentencing Friday on a charge of wire fraud.
Frantz was being truthful, court records show.
In 1991, Frantz was fired from his job at Great Lakes Chemical in Indiana. He had ordered computer equipment with company funds that he sold for personal profit, according to Jenny A. Durkan, the U.S. attorney for the Western District of Washington, and Thomas M. Woods, assistant U.S. attorney. That information was included in their sentencing memo to the judge.
After he was fired from Great Lakes, Frantz landed a job with another company, Pro Audio, in Indiana. The company later discovered that Frantz had "deposited into the bank on numerous occasions significantly less money than the company had earned on that day." He also forged checks.
During an 18-month period, Frantz deposited $200,000 in his account, even though his annual salary at Pro Audio was less than $32,000.
"I never understood why I have the compulsions to steal in times of financial distress rather than seek out alternatives," said Frantz in his letter.
In 1996, Frantz was convicted of theft and sentence to four years in prison for his actions at Pro Audio. He filed for bankruptcy, listing more than $375,000 in debt.
Prosecutors said that after his release from prison, "Frantz, with repeated promises that he was a changed man," approached Auto Warehousing Co. and "the company decided to give Frantz another chance."
AWC told prosecutors that Frantz's "recommendations for hardware, software, and IS related purchases were given high priority in terms of expenditures, operations, and business strategy. Frantz carried significant leverage with senior management and his opinions and recommendations were taken very seriously. "Dale Frantz was a trusted senior leader at AWC," according to court records.
But while he took IT operations at AWC in new directions, he couldn't do the same for his life. He continued to steal. An audit by AWC found that he had stolen more than half a million diollars form the company between 2007 and 2009.
AWC confronted Frantz, who tried unsuccessfully to convince the company not to report him to the authorities. He said he was bankrupt, and a decision to prosecute would end any possibility of his ever paying the company back, said prosecutors.
After he was charged in June, Frantz promptly pleaded guilty. The money he stole wasn't recovered. Frantz's house went into foreclosure.
"I was relieved on the day I was terminated from AWC," Frantz wrote to the judge. "Relieved of the pressure of the job, but more importantly it meant that the double-life of 'successful executive' and 'embezzler' was over," he said.
Frantz told the judge that he was making changes, the first of which "was to accept full responsibility for my actions." He went on to say he has been in therapy and "for the first time in my life I've been able to honestly deal with the failures in my life.
"I have created a nightmare scenario for my wife and family," wrote Frantz. "Our personal finances are devastated."
His bankruptcy petition in July was denied because of the criminal case, meaning "the full weight of all of our debt will rest solely on my wife's shoulders while I'm gone."
Prosecutors were unrelenting. "Dale Frantz lost the benefit of the doubt long ago," they wrote. "He has now victimized three straight employers."
Frantz's family, his parents, wife and children, wrote poignant letters of support. One letter came from Mark Whitehill, a licensed psychologist who had been treating Frantz over the past year.
Whitehill wrote to the court that the "tragic irony is that Mr. Frantz's criminal conduct occurred in an individual with many skills that he has used for the betterment of organizations and others. Frantz, he said, has truly lived a 'double life.'"