A St. Joseph woman is facing up to 20 years in prison for defrauding her employer of $540,000 in a phony billing scheme.
Kris Fratzke, 53, appeared in the U.S. District Court of Michigan last week where she pleaded guilty to wire fraud and filing a false tax return, according to online court documents.
Fratzke was the chief financial officer of Flare Fittings, a manufacturing company in Kalamazoo. Between 2013 and 2019, she created a shell company she called Mid America Fittings to appear to be an actual supplier of materials to Flare Fittings, according to a news release from the U.S. Attorney’s Office.
She then created phony invoices for the shell company and paid them using her authority over the finances of the company. In this manner, she issued 235 checks, totaling over $540,000, to the shell company and then deposited that money into her personal account and used the funds for personal expenses, according to the U.S. Attorney’s Office.
The tax charge relates to Fratzke not declaring this income to the Internal Revenue Service.
The federal wire fraud charge carries a maximum possible sentence of 20 years in prison, a fine of twice the fraud proceeds, plus mandatory restitution. Filing a false tax return carries a maximum penalty of three years in prison, a $250,000 fine and other penalties, according to online court documents.
Fratzke is scheduled to be sentenced at 3 p.m. Oct. 5 in the Western District Court of Michigan.