EX-SQUARE DEAL OFFICIAL INDICTED

July 15, 2000 12:00 am

MEDFORD The U.S. Attorney in Medford announced this week that Jeffrey J. Frank, 48, former chief executive officer of Square Deal hardware stores in Brookings and Crescent City, had been indicted on fraud charges.

Attorney Kristine Olson said Frank, of Portland, was named in an eight-count indictment. It was the culmination of an investigation that started in 1997, she said.

The stores closed after they filed for bankruptcy. Employees lost their jobs and their pension benefits, she said.

At the time, there were complaints from customers who said they purchased items that were not supplied. The complaints were referred to lawyers, but there was never an announcement of a resolution of the complaints.

The former Square Deal building in Brookings has since been sold to Kerr Hardware.

The indictment accuses Frank of embezzlement from an employee stock ownership plan; three counts of mail fraud; two counts of interstate transportation of stolen property, one count of bankruptcy fraud and one count of money laundering.

Frank appeared in court, pleaded not guilty, and was given a Sept. 19 trial date in the U.S. Court in Medford. During the interim, he was given a conditional release.

If convicted he could face hundreds of thousands of dollars in fines and years in prison, Olson said.

For example, the maximum punishment for mail fraud is five years in prison, and a fine of up to $250,000.

The U.S. Attorney said the investigation was made by the Labor, Pension and Welfare Benefits Division of the Department of Labor, and by the criminal division of the Department of Internal Revenue.

It centered on Franks involvement with the establishment of an employee stock ownership plan, and the purchase of the L.C. Bliss Cattle Corp., Inc. Bliss owned the Square Deal stores. The stores were the employees retirement benefit, the U.S. Attorney said.

With the closure of the stores, the employees lost both their retirement and their jobs, she said.

This indictment is a direct result of perseverance and hard work by the Department of Labor and the I.R.S. The case agents sifted through voluminous financial records and interviewed numerous witnesses in order to present a clear pictured to the grand jury of Franks complicated financial dealings.