By Shereen Siewert

WAUSAU — The former principal developer in the stalled Riverlife Villages development is accused of defrauding a childhood friend of more than $3 million in a Ponzi-style financial scheme in Florida, according to federal court documents.

A lawsuit filed May 8, 2018 in U.S. District Court for the Middle District of Florida, accuses Michael Frantz and his former corporation, Frantz Community Investors, of using millions of dollars pegged for a real estate development to pay off bad debts from other projects. A copy of the complaint and associated documents is embedded below.

Court filings show Frantz and James Raders of Melbourne, Fla. were childhood friends who remained close into adulthood. In the fall of 2015, Frantz approached Raders about “high return” real estate investment opportunities. Frantz allegedly claimed to have a net worth of around $27 million, even going so far as to delivering a “misleading financial statement” to prove it, Raders alleges. Frantz also claimed Raders’ proposed investment would see about a 12 percent return.

After several meetings, Raders says he agreed to liquidate his investments and life insurance policies totaling more than $3 million and wire the money to Frantz for investment purposes. Frantz received the money — Raders’ life savings — in March 2016 by wire. But Frantz did not invest his friend’s money as promised and instead “stole Raders’ money,” the complaint reads. In the months that followed, Frantz refused to identify how the funds were used and refused to pay Raders back despite repeated promises to do so, according to court documents.

After Frantz repeatedly dodged demands for payment, Raders hired Wolz Corporate USA to perform a litigation search that revealed that Frantz was already being sued by numerous companies and individuals.

The resulting 69-page search document, which is included in federal court filings, shows that Frantz in 2015 and 2016 “deceived Raders by failing to inform Raders that Frantz was in financial trouble in his real estate investments and that Frantz could not possibly have complied with the promises he was making to Raders,” the complaint reads. Instead, Raders now believes that his funds were used to pay off other creditors from “troubled real estate projects,” court documents state.

The total investment Raders allegedly provided was $3,103,306.80. The case is currently in mediation.

Wausau Mayor Rob Mielke has repeatedly insisted that Frantz was properly vetted before the city entered into an agreement with him and his company. But the lien search outlines a long list of legal and financial troubles, several of which date back well before Frantz’s relationship with Wausau began.

To settle a 2014 Illinois lawsuit, for example, Frantz agreed to pay one plaintiff, Paul Anthony Baxter, $250,000 by Oct. 14, 2015. When Frantz failed to meet that deadline, the court ordered a $257,536.40 judgement against him on Feb. 10, 2016 — just 13 days before members of the Wausau City Council approved Frantz’s company as developer for the multi-phase, $100 million Riverlife Villages project. Each lawsuit cited in the latest case is public record and can be accessed through a basic court or lien search.

The city’s commitment to the project included about $2.75 million in grants and loans for the first phase alone. A pre-development loan of $372,462 was backed by a “personal guarantee” from Mike Frantz and his wife, according to a May email from City Attorney Anne Jacobson.

On a broader scale, the city has so far committed to about $3.3 million in borrowed funds for riverbank improvements and a pedestrian bridge in the riverfront development area, along with an additional $6.4 million in borrowed funding for infrastructure, Third Street housing and park improvements, according to city documents.

Despite Mielke’s insistence that no missteps were taken by the city in the Riverlife Villages situation, city leaders have already improved the vetting process for future public-private partnerships. Economic Development Director Chris Schock in May unveiled an updated application for potential city partners which now asks crucial questions of both developers and shareholders with at least a 20 percent stake in any proposed project that would require taxpayer investment. The new application poses questions about current and former bankruptcies, lawsuits, criminal charges and outstanding tax liens and requires applicants to explain those situations in detail before a partnership is approved.

Those changes were adopted in the wake of a March Wausau Pilot and Review investigation that revealed a second key partner in the city’s Riverlife project, Jason Sharkey, had been embroiled in a multi-million dollar fraud scheme in Colorado. Sharkey is a former partner of Frantz in Quantum Ventures, LLC, though he voluntarily withdrew from the project after news of his criminal history surfaced. The Sharkey investigation was prompted by a Google search and verified through a number of paid background check services, court documents, and interviews.

Members of the Wausau City Council on Tuesday officially ended the city’s relationship with Frantz, who until then had spearheaded the highly anticipated $100 million dollar project on the east side of the Wisconsin River. Two new interested parties have come forward with potential plans to take over the development but are only likely if the roughly $3 million in liens filed against the project are satisfied, city officials say.

Amended Frantz Complaint

litigation search

31 replies on “Former Riverlife developer accused in $3 million Florida fraud”

  1. Mielke is either an absolute clown or just plain and grossly incompetent. Okay……both.
    On the west side of Wausau, I see a new, large apartment complex going up (near Briq’s) and the new (is it ENT?) medical building going up across from Menards. BOTH of these projects were started not very long ago and are going full speed ahead and/or nearing the finish line. Yet we have the absolutely clueless gaggle at city hall overseeing a project that has only foundations poured and over $3 million in construction liens. AND…for how long has king bug sprayer and that fraud Schock been wanting to give Frantz “a second……third chance”? I guarantee you they only decided to finally cut ties with Frantz AFTER they found out about ANOTHER law suit against him. This entire clown show taking place at city hall is embarrassing. Unfortunately, the only ones embarrassed are the taxpayers/voters of the city of Wausau.

    1. To be fair, once the problems came to the surface, it puts the brakes on everything. You can’t simply pull the plug on a moment’s notice and hand off the project to someone else. Yes, they should have seen these problems before they happened, but there isn’t a lot that they can do to speed up the process at this point.

      1. Did I say they should’ve “pulled the plug and handed off the project to someone else”? No. Furthermore, I also never said they SHOULD do anything to “speed up the process at this point”. Well, other than some firings and resignations, what else can be done right now? The people in charge of this crap fest are busy doing two things: Trying to cover their asses and doing damage control. Both quite badly.

  2. Clearly the Economic Development committee has failed as an oversight body for the City Staff.

  3. Will be nice to expose the downtown clique special interest that’s directing the two pumpkins to these grandiose projects at the expense of tax payer.
    “20 percent stake” ??? What is this, a home owner’s 1st Mortgage? Most financial institutions will laugh at you. You cannot even tell a swindler from an investor.
    Fix the roads, collect the garbage and stop pretending you know what you are doing. Wausau now has the highest debt in all over Wisconsin.

  4. Boy, I know I will sleep better tonight knowing that the application process has been improved!! “The new application poses questions about current and former bankruptcies, lawsuits, criminal charges and outstanding tax liens and requires applicants to explain those situations in detail before a partnership is approved.” What a joke!!! Do you think a criminal is going to answer any of these questions honestly? We need someone to dig in to every person interested. Perhaps take a lesson or two from Shereen Siewert on how to investigate. Michale Frantz belongs behind bars, Chris Schock should be fired and Mayor Mielke should step down before we move forward on this project.

    1. The city should not be involved with any of these unwanted projects. They should offer free land as long they build something on it. Close this chapter and be done.

      Do you think they are going to stop at $27 million in two years? Not to mention the other $10s of millions from previous years. Most likely their next focus will the ABC building. With all the rentals in one location, in 5 to 10 years that area will be drug dealing heaven.

    2. I totally agree. But let’s go one step further. Let’s subject those we elect to extra scrutiny. Let’s look st their voting records. Are they big spenders our do they watch the public purse like it was their own? The final power lives with the city council. The mayor and his staff can only advise, its the council that consents.

    1. Not really! Schock was hired under pressure from the downtown clique to save their miserable antiquated businesses with a failing mall. Being under that pressure to please the clique, he would create and buy time with any charlatan or money man with lots of promises at the expense of tax payers. I like his latest touch where the whining clique is now a potential developer. That whole downtown with the city leaders are one big joke of submissive conflict of interest.

  5. Six different projects — some recently completed, others just starting — will add at least 474 housing units.

    Since projects on the East Side are creating loft apartments, a play ground, row housing on 3rd St. and the WOW has been completed and serving the community, the rive walk, work on the river banks, the bridge, docks, and foundation have been completed and the original developer has lost his option and is still facing legal challenges on many fronts… I fee the best course of action is to move forward with the River Life Project, complete what has been started and celebrated the fact that the play ground under the Bridge Street bridge is nearing completion, that we own the plans, that we have three parties interested, and we have already secured the budget items and the council has strengthened the vetting process. The city has been dinged, but certainly able to complete this and the other ventures…

    Thanks for doing all the research Madame Editor.

  6. People that never earned their living in the private sector should not be commenting how wonderful it is to waste tax payers hard earned dollars by useless government employees pretending to be entrepreneurs.
    Rumors has it, most of these projects are going to soon be subsidized from government employees very early retirement funds and pensions.
    Apparently these employees are very understanding in sharing their excessive tax funded exclusive benefits.

    1. Dear Ron:
      FYI, all the people work hard, some work smart, but it is still difficult… in our mixed economy of private and public jobs and funding, elected officials are hired to do many jobs… I VALUE their efforts, but not when they are underfunding education, the rebuilding of our infrastructure, shared reviews for cities and states, and screwing over our universities and health care. We all have work to do to make sure that our tax dollars are used wisely… insulting others doesn’t do a damn thing to work through the current situation…

      Based on what? I worked in the private and public sector, for certain jobs, you have to work in the public sector… education, police work, the military, university, but I also worked in other areas… I paid my taxes, earned my positions, went through back ground checks and my pension dollars have been funded companies and purchased stocks, our government is responsible for services, safety, our infrastructure and public employees have every right to want the best use of funds, outran dollars are just as hard earned, veterans served, firefighters and police, emergency units, teachers, doctors and nurses work hard everyday… in both the public and private sector… who are you to decide who is useless… could you explain what part of my post isn’t true or valid?

      Rumors has it, yep!

      Many projects are going to subsidized from government employees retirement funds and pensions. Doesn’t your company provide health cate benefits and pension plans? Why not?

      Public employees earn their benefits. If you could qualify, then you could get the benefits, which have been eroded as the state government has moved against due process and the first amendment rights of free speech and the worker right to form unions and sign contracts.

  7. Now that’s what I like to hear Ron. Like the saying goes ” anyone in government should have to wear there sponsers names on there clothing so we always know who they are playing for”

    1. The fact they win the elections in local government is a testimony of public support, when big donors tip the scale like then we have agendas that aren’t good for the city or county.

      1. How about when big profiteers tip the scale? For someone that is always complaining how the national one percenters are getting free rides, you sure know how to promote the local one percenters in getting tax payers subsidized $600.000 “high end” apartments. Convenient Democrat?

      2. Ron: http://www.pewsocialtrends.org/2015/12/09/the-american-middle-class-is-losing-ground/
        When Have I ever complained about 1% getting a free ride… I oppose the tax rates that create deficits and debt, the funding cuts for local education, cities, counties, and our UW system and the income inequality… you do realize we have nearly 500 apartment units being built… many will be affordable for lower incomes, who is getting a subsidized $600,000 apartment? I want to see the projects completed.

  8. Failing to vet Mike Frantz and sticking with him though 2016 and paying his bills for him; through 2017 and again paying his bills for him; and for the better part of 2018 even after lien filing notices were received is such an unbelievable failure, it is easy for it to become the focus of people’s ire. But, let’s not forget that the Frantz project is only $2.74 million in a $27 million TID budget for projects along the riverfront and downtown business district during the same period.

    The management of the TID money bears more scrutiny. More than $10 million was used (or soon will be used) for trails, riverbank reconstruction, a pedestrian bridge, a skywalk for the parking ramp to the Dudley Building, the extension of Fulton Street and Riverside Park. None of those “investments” will generate any tax revenue to repay the borrowing used to fund them.

    Then, there is the $7.95 million–100% of the project costs–to build Wausau Chemical a new facility. With no private money involved, it will take more than 30 years for the taxpayers to break even on the new building alone. But also, a part of the deal, the city is acquiring a Superfund site that will have to be reclaimed at public expense.

    Again, the 2.5-year long dance with Frantz is an error for the record books. But there is a lot more and costly mismanagement to the saga of Tax Incremental District #3 and its successor TID #12 than most people realize.

    1. Keene,
      Failing to vet Mike Frantz… is something to be looked into,
      and sticking with him though 2016 and beyond… was about legal time tables,

      and paying his bills for him; through 2017 and again paying his bills for him; and for the better part of 2018 even after lien filing notices were received is such an unbelievable failure… is the city paying his bills? Is this not legal matter? Was the work completed? Don’t we still own the blueprints and the plan?

      What do you know and how much has the city paid?

      But, let’s not forget that the Frantz project is only $2.74 million in a $27 million TID budget for projects along the riverfront and downtown business district during the same period.

      The management of the TID money bears more scrutiny. More than $10 million was used (or soon will be used) for trails, riverbank reconstruction, a pedestrian bridge, a skywalk for the parking ramp to the Dudley Building, the extension of Fulton Street and Riverside Park. None of those “investments” will generate any tax revenue to repay the borrowing used to fund them.

      These are improvements and they will create a more vibrant, but the increased traffic will affect business numbers in the downtown.

      Then, there is the $7.95 million–100% of the project costs–to build Wausau Chemical a new facility. Yep, get toxic chemicals off the river and clean up the land… important health issues and a further improvement of the river side… but it will be paid off!

      So make your case and tell me where you stand on completing the various projects? Park under the bridge? Move the chemical company? Clean up toxic land? Finish the apartments on the river? Finish the row houses? Finish the sky walk? Finish the YMCA expansion?

      1. “get toxic chemicals off the river” Are you referring to 3M or the flow of Panta in the parks? Majority of Wausau’s citizens care less of the downtown or riverfront. Most do shop on line or Rib Mountain. The majority of downtown is a hangout for useless early retired government employees, Wausau’s desperate housewives and many nice simpletons.

      2. Ron: Wausau Chemical could be a Superfund sight… that is serious and I would want that company near the river and upstream form the lake and other communities.
        Are not part of this deal at this time!
        How do you know the majority of the citizens don’t care about the downtown for river district? Where they shop?
        Do you now or ever have anything to say about the issues and can you comment without smearing others.

      3. Mr. Enk, if you drive downtown you will notice that Chernobyl has more people walking around and for some reason the mall is dead. For $27 million in two years we got nothing while Rib Mountain keeps getting all the large, new, improved version of downtown’s antiquated monopoly.

  9. I’ll some it up, this town sucks. My wife and I are in our early 40s, we both work for a living and we are working on getting out of here. What does this town offer??? A river walk and a restaurant, overpriced ski hill that would cost my family of 4 over $200 dollar a day to go to?? Come on

  10. You guys care I get it but it’s like beating a dead horse. All the paying jobs are in Schofield, Weston, Rothschild plus anyone moving to the area doesn’t buy a home in Wausau it’s dead like you said. Why pay taxes that are high only going to get worse, correct me if I’m wrong. I don’t work in this town, wife works elsewhere both professionals pay is better 5 miles away. It’s frustrating beyond belief all this millions in debt talk crooked city officials, main Street clique, I moved here for a nice small town it’s sad.

    1. Seems you have gotten in with a negative group… ask around and participate in all the good things that we have. Doesn’t mean the other communities are not good!

      1. The “positive” individual collects his multiple pension checks from hard working tax payers, working two jobs to make ends meet. Posts encouraging wasteful spendings by government as a positive accomplishment.

  11. I don’t have time for negative groups yo. Just got done meeting new superintendent. I volunteer at kids school, work full time plus side jobs to make ends meet, go to church on Sunday. Just upset im going to have to move because I don’t want to pay even higher taxes for stupid decisions. Your right some things are good, good people, festivals, but the bad heavily outweighs the good. If everyone on here wants to get together and go to a city meeting and tell them what’s up , email me. Otherwise I’m done going around the bush about the same junk. Seems the city can do whatever they want with no penalty, penalty is for the pesants like us.

  12. Ron:
    The “positive” individual shops at the downtown shops, attends activities on the 400 Block, attends play and performances at the Grand Theater, goes to the CVA, listen to music at the many restaurants and during the Blues Festival, goes to the Library, and searching for parking spaces, the many events, music, movies on the 400 Block, and people walking about and along the river path, travel on the river and dock at the bridge facilities, biking, dogs, and more… people playing in the water fountains… ice skating in Winter… hardly an area that had a nuclear meltdown and has high level radiation.

    Ron, do you understand what a pension is? It is like Social Security… the worker puts in funds and the employer matches the funds, after the appropriate length of time… the worker can retire and collect from the program… a pension is a deferred payment for work performed… no work, no pension and the worker earns the pension and pays taxes… multiple pension checks can be collected if you have successfully payed in long enough… the pension funds are collected and invested to be paid later…
    and yes, encourage investment by government as a positive accomplishment… infrastructure, river walks, housing, parks, education, utilities, water and all the other things necessary for a city to function… I demand that the leadership be fiscal responsible and that legal responsibilities must be followed and that random angry and negative comments a what is “useless”

  13. Maybe we should just focus on facts. This month, the City of Wausau finally parted ways with would-be developers Mike Frantz and Dave Barker. The city exercised a clause in the development agreement to fire the developers because they were not paying their bills.

    In December of 2016, MIke Frantz couldn’t pay his bills. He had five unpaid invoices from Mudrovich & Associates totaling $290,078.50. Instead of exercising the clause, the city advanced the $290,078.50 to Wausau RiverLife, LLC, another one of Mike Frantz’s LLC that no longer exists, so that the bills could be paid.

    In July of 2017, Baker Tilly and Ayers & Associates.had year-old invoices that were unpaid by the developer. Again, instead of exercising the contract clause, the city advanced the money–this time paying Baker Tilly $68,884 and Ayers $13,500 directly.

    Think about this for just a moment. Seventeen months into the project, Mike Frantz could not issue a check for as little as $13,500. That should have been a clear signal that he had no money.

    That would have been a good time to exercise the clause regarding inability to pay subcontractors and get a new developer. Instead, city officials staunchly defended Frantz, reassured the public that his financing would soon be in order and allowed him to run up a $3.5 million tab in unpaid bills.

    City officials ignored a series of “red flags” over a two year period. By any definition, that is an inexusable failure.

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