Newport Beach : 60-Day Prison Sentence Imposed in Realty Fraud

A federal judge ordered a Newport Beach businessman to spend 60 days in prison and repay the $1.5 million the man admitted swindling from investors in two Palm Springs area real estate developments.

Among those defrauded by Jack Dean Franks were baseball Hall of Fame member Harmon Killebrew and former U.S. Rep. Ralph Harding, who each invested $100,000 in a project to build 18 luxury homes in Rancho Mirage.

“Even at this moment, I do not purport to understand the full complexity of all the financial activity in which Mr. Franks has engaged,” U.S. District Judge Laughlin E. Waters said. He said the Franks case was one of the most complicated he had ever heard.

Waters said high interest rates in 1981 and 1982 hurt Franks’ real estate venture. But he said Franks suffered from “an aura of infallibility” when he used investors’ money to support his lavish life style.

Waters imposed the 15-year maximum sentence on Franks, 44, and then suspended all but 60 days. Waters also placed Franks on five years’ probation and ordered him to maintain a “modest life style” until his debts are repaid.