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Frazier says he's not guilty of racketeering

A Washington man accused of defrauding elderly clients in Southern Oregon of up to $310,000 through the sale of fake annuities pleaded not guilty to racketeering and other charges at an arraignment Tuesday in Jackson County Circuit Court.

If convicted, Michael Kenyon Frazier, 50, of Spokane Valley, could face up to 20 years in prison.

"The main allegation is racketeering, which is a Class A felony," said Paul Beneke, Frazier's lawyer.

Frazier turned himself in to Medford police on March 3 and remains lodged in the Jackson County Jail on eight counts of first-degree aggravated theft and charges of securities fraud, selling unregistered securities and selling securities without a license. Frazier's $250,000 bail amount was reduced to $175,000 by Circuit Judge Patricia Crain.

Frazier's pretrial hearing is slated for March 24, Beneke said.

Frazier formerly lived in Sutherlin and had offered investment seminars through his business, Frazier Financial Services, for seniors at various retirement homes, senior centers and convention centers across Southern Oregon since 2002, police said.

Frazier's presentations often lacked specifics on where clients' money would be invested, and investigators suspect he used the funds to pay off earlier investors and to remodel his home.

An investigation was launched in July 2007 when an unhappy investor called the Oregon Department of Consumer and Business Services, division of finance and corporate securities, to report suspected fraud. The client had invested money in an annuity Frazier offered in June 2004, but never received any payments.

Medford police said they uncovered at least eight separate instances in which Frazier took money but didn't provide the promised services. Eagle Point police also were investigating a complaint.

In all, state and local investigators suspect Frazier defrauded multiple victims in Jackson County and at least one other victim in Josephine County. Each investor lost tens of thousands of dollars, for a total that likely amounts to $200,000 to $310,000.

Frazier, who formerly owned an insurance agency in Sutherlin and founded Frazier Financial as a retirement planning company in 2001, lost his license as an insurance agent in 2005 for misappropriating money that customers gave him for an annuity, state records show.

In 2002, he took $15,000 from an elderly couple he was friends with and planned to pay off $17,000 he owed in back taxes, disciplinary records from the Consumer and Business Services' insurance division show. He repaid that money while under investigation, and, at the 2005 hearing, touted a clean disciplinary record with no complaints in his first two decades in business.

Reach reporter Sanne Specht at 776-4497 or e-mail sspecht@mailtribune.com.

Frazier says he's not guilty of racketeering