THE FRANKEL-STEIN MONSTER
Sightings from The Catbird Seat
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September 11, 1999
Martin Frankel
Wine, Women and Song With Your Money
by John Montgomery
It happens to all of us occasionally. You’re sitting across the desk from some guy trying to sell you insurance, a car loan, or perhaps some investments. He starts throwing figures and financial jargon around. You’re lost. You thought you understood what was going on when you walked in the room, but now you wish you’d paid more attention back in math class. You’re hoodwinked and hornswoggled, but you don’t want the guy to know that, so you keep nodding and smiling.
Finally he gets to the bottom line and you’re so anxious to get the hell out of there that you sign where he says and slink home, hoping you haven’t just committed yourself and your entire family to a lifetime of poverty.
That’s what you hope, but you have that sinking feeling in the pit of your stomach that you’ve been slimed by a slick, slithering slut.
Surely Martin Frankel’s clients had that same feeling. Martin, who’s from Connecticut, was arrested in Hamburg, Germany this week after four months on the lam from charges that he embezzled $218 million from insurance companies he owned. Most of the insurance policies were the small burial type that cover funeral expenses, sold to elderly or military people. He also stole as much as $1.98 billion from the St. Francis of Assisi Foundation, which he established in the British Virgin Islands.
If you went to Catholic school, you will remember St. Francis. He renounced his wealthy lifestyle and preached the necessity of a poor, simple existence based on the Gospels.
Martin had no such beliefs to get in the way of his lifestyle. He lived in two lavish mansions that he bought for $5.6 million in cash, along with round-the-clock personal chefs and a fleet of 20 cars. The cops found $10 million in diamonds, gold and jewelry on Martin when they arrested him. And as you might expect, Martin surrounded himself with a entourage of hot young women who were presumably attracted by his good looks and honesty. In fact, some investors used to call him the “Hugh Hefner of High Finance.”
In 1997, police investigating the hanging death of a member of Martin’s harem at his mansion found a 2-foot leather riding crop and bondage-related videos near her body. The death was ruled a suicide. She must have been getting ready to ride a horse to warn St. Francis about Martin.
But don’t get too angry at Martin. His story has a happy ending – for us, not for him. If you’re tired of seeing jailed defendants strutting around on TV like cocky, smirking bastards, cheer up! You’ll be delighted to know that Martin, now a resident of Hamburg’s tough Holstenglacis prison along with a pack of drug suspects awaiting trial, is described by his attorney as being “nervous, depressed, frightened, uncomfortable, confused” and worried about possible retribution from “unspecified groups or people.”
And who might these unspecified bullies be? The investors he screwed, the girls he screwed, the state insurance regulators who are going to have to pick up the tab, the policy holders who won’t get their burial claims paid, and the Catholic nuns who intimidate little children with tales of St. Francis.
If I were Martin, I’d really be worried about the nuns.
www.johnmonty.com/cotw/cw990911.htm
May 19, 2002
California Law Offices of Tom Easton & Jonathan Levy
Contact: Jonathan Levy, Tel. 513-528-0586, Jlevy1@cinci.rr.com
For Immediate Release:
Vatican Lawsuit Liability exceeds
$1 billion in USA Courts
The Vatican, which has long claimed immunity to lawsuits, is now facing claimants seeking more than $1 billion.
Insurance commissioners from Mississippi, Missouri, Tennessee, Okalahoma, and Arkansas have joined Holocaust victims and victims of pedophile priests in filing lawsuits against the Vatican and Vatican Bank. The Insurance commissioners are seeking over $600 million in a RICO (Anti Racketeering) lawsuit that has named several top Cardinals including two former Papal Nuncios to the United States and the Vatican Secretary of State, Cardinal Sodano, as co-conspirators with convicted financier Martin Frankel in an unsuccessful attempt to launder an incredible $150 billion in insurance assets.
Frankel who has plead guilty to 20 counts of wire fraud and one count each of securities fraud, racketeering, racketeering conspiracy and a forfeiture charge has been cooperating with the government in retrieving $200 million in missing insurance assets. Frankel faces 150 years in prison and will be sentenced next year.
Vatican officials allegedly received pay offs from Frankel and his associates in exchange for use of a Vatican operated charity as money laundering conduit. A Vatican monsignor, Colagiavanni, who also is facing racketeering charges, assisted Frankel in taking over unsuspecting insurance companies. Cardinal Laghi, former Vatican Nuncio to the USA, received $100,000 from Frankel. The Vatican Bank, which is controlled by Cardinal Sodano, issued a key letter of credit that Frankel used in his insurance schemes.
The Vatican’s legal problems in the US first arose in November 1999 when California attorneys Tom Easton and Jonathan Levy filed a class action lawsuit seeking return of gold and funds looted from Yugoslavia during WWII and laundered by the Vatican bank post war. The wartime treasure is valued at several hundreds of millions. Earlier this year sexual abuse victims in the US sued the Vatican and now the insurance commissioners are seeking restitution and penalties of over $600 million. All the lawsuits are pending.
According to co-counsel in the WWII case, Jonathan Levy, all the cases have an excellent chance of beating Vatican immunity defenses: “The Vatican used up its goodwill long ago, it has violated too many international laws and laundered too much money for anyone to believe its wholesale denials anymore. They stand to lose more than a billion dollars due to a lifestyle of crime and corruption by their top officials.”. . .
Press Release, May 2001
IRS-CI AUCTIONS 1995 COMMANDER 114TC AIRPLANE
This plane is being auctioned off by the IRS-Criminal Investigation. The seizure of this airplane is associated with the proceeds of alleged money laundering and fraud related to the Martin Frankel case out of Connecticut.
In December of 1999, David Rosse, pleaded guilty to racketeering conspiracy charges. He was Martin Frankel’s employee, responsible for security. As part of his plea agreement, he was obligated to identify assets related to the case, which would be subject to forfeiture. This 1995 Aero Commander 114TC Airplane, which had been purchased in Rosse’s name, was one of the assets identified.
Martin Frankel allegedly conspired with others in a $200 million fraud against several insurance companies. In May of 1999, he fled to Europe and spent three months as a fugitive until he was arrested in Hamburg, Germany, in September 1999. German authorities extradited him to the United States to face a multi-count indictment including RICO (Racketeering Influenced and Corrupt Organizations Act), RICO conspiracy, wire fraud, and securities fraud. Frankel is being held without bond, pending his trial.
To date, the U.S. Attorney’s Office for the District of Connecticut, has seized approximately $30 million in cash, gold, diamonds, cars, real property, and other personal property. An additional $30 million has been seized and frozen in overseas accounts at the request of the U.S. Attorney’s Office. These funds will likely be subject of civil proceedings in the respective foreign jurisdictions.
In Edison last month, 21 of Martin Frankel’s luxury cars were sold for $757,000 at auction.
Airplane Preview: May 15, 2001, from 9:00 a.m. – 4:00 p.m. at Miami Aviation Corp., 14980 NW 44 Court, Opa-Locka, FL 33054.
Auction: May 16, 2001, at the Broward County Convention Center: 1950 Eisenhower Blvd., Port Everglades, FL 33316.
Bidding on this plane requires a $25,000 cashiers check deposit made out to U.S. Customs Service/EG&G Technical Services. Phone bidding is also available on the airplane. Phone bidder information is available by calling Gary Poulsen at 305.621.2306.
For information on this and other Department of Treasury public auctions, please visit the Treasury web site at www.treas.gov/auctions/customs or call the Public Auction Line at 703-273-7373.
Department of Treasury sales are conducted by EG&G Technical Services throughout the United States and Puerto Rico.
The U.S. Department of the Treasury and EG&G Technical Services formed a public/private partnership in 1990 to manage custody, transportation, storage, maintenance, and disposal of federally seized property in a cost-effective manner….
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For some VERY INTERESTING sightings of EG&G, a Carlyle Group company, GO TO > > > Down The Rabbit Hole
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December 28, 2001
Three charged in insurance
fraud investigation
By PEGGY HARRIS, Associated Press Writer
LITTLE ROCK, Ark. (AP) — Three Tennessee insurance executives accused of participating in a $215 million fraud scheme allegedly masterminded by Connecticut financier Martin Frankel were being sought by Arkansas authorities, a state insurance fraud investigator said Thursday.
Affidavits for the arrests of Gary Atnip, Billy D. Williams and Wade A. Willis, all officers at Tennessee-based Franklin American Life Insurance Company, were filed in Pulaski County Municipal Court, said Marty Nevrla, director of the Arkansas Insurance Fraud Investigation Division.
Nevrla said the three men participated in part of Frankel’s scheme by illegally transferring nearly $5.3 million from Old Southwest Insurance Company in Jacksonville to Franklin American, the parent company of Old Southwest.
Atnip, 50, of Columbia, Tenn.; Williams, 46, of Bell Buckle, Tenn.; and Willis, 40, of Franklin, Tenn., transferred the money without the permission of the Arkansas insurance commissioner, in violation of state law, Nevrla said. The money eventually ended up in Europe, where Frankel fled during an investigation of his multi-state business activities, Nevrla said.
The Arkansas Insurance Department is pursuing one felony charge against each of the three men. The maximum penalty for conviction is five years in prison and a $10,000 fine.
Frankel is accused of hiding behind associates to create Thunor Trust, the holding company for insurance companies in Arkansas, Mississippi, Missouri, Oklahoma and Tennessee. Regulators in those states are seeking more than $600 million in damages from Frankel in civil cases.
Frankel was later returned to Connecticut, where he faces federal charges of racketeering and conspiracy. He has pleaded innocent and his trial is scheduled for September 2002.
May 11, 2002
Five States Sue Vatican in
Insurance-fraud Case
Associated Press
JACKSON, Miss. – The insurance commissioners of five states are suing the Vatican, alleging the church was involved in a $200 million-plus insurance fraud scheme run by now-jailed financier Martin Frankel.
The federal lawsuit, filed Thursday by the commissioners of Mississippi, Tennessee, Missouri, Oklahoma and Arkansas, accuses the Vatican and Monsignor Emilio Colagiovanni of racketeering and fraud.
“We’re not trying to embarrass the Vatican; we’re just trying to do what we have to do under the statutes,” said Lee Harrell, Mississippi’s deputy insurance commissioner.
The Vatican said it had no immediate comment on the lawsuit.
The lawsuit says that in 1998 Frankel tried to use the church as a front to purchase insurance companies. It says Frankel was to give $55 million to the Vatican as a charitable foundation. The Vatican would keep $5 million and Frankel would retain control over the remaining $50 million.
While Frankel is not a defendant in Thursday’s filing, the suit says that from 1990-1999 he devised numerous schemes to commit fraud, including setting up false insurance companies.
Colagiovanni, a senior member of the Vatican government at the time, helped propose the scheme to senior Vatican officials, the lawsuit says.
Because the Vatican assisted Frankel in the attempted purchase of U.S. insurers, the suit says, the Holy See carried on commercial activities in the United States, activities that were not sovereign and not religious.
The insurance commissioners are already seeking more than $600 million in damages from Frankel in a lawsuit filed in 2000. Mississippi Attorney General Mike Moore has also filed criminal charges against him.
Frankel was arrested in Germany in 1999 and is jailed in Rhode Island awaiting trial in U.S. District Court in New Haven, Conn. on charges of racketeering, fraud and conspiracy.
Colagiovanni was arrested in August on charges of wire fraud and conspiracy to launder money in connection with a multimillion-dollar insurance scam.
May 15, 2002
Former Financier Pleads Guilty
By DIANE SCARPONI, Associated Press
NEW HAVEN, Conn. (AP) — Martin Frankel, the financier accused of looting insurance companies of more than $200 million and using it to live like an outlaw Hugh Hefner, pleaded guilty Wednesday to pulling off one of the most brazen swindles Wall Street has ever seen.
Frankel, 47, could get up to 150 years in prison and $6.5 million in fines at sentencing next year, though federal prosecutors said they will probably give him a break if he helps recover the missing money.
Defense attorney Jeremiah Donovan admitted the government had a “ton of evidence” against Frankel.
“I sure hope he’s a free man one day,” Donovan said.
A pale and gaunt Frankel politely answered “yes” or “no” as he was led through the plea bargain by the judge. Originally charged with 36 counts, he admitted to 24 charges of fraud, racketeering, conspiracy and other offenses.
Prosecutors set the total loss in the fraud at $208 million. To date, the government has recovered $70 million to $80 million, including $30 million Frankel told authorities was hidden in a Swiss bank account.
“The book is not closed in this case,” U.S. Attorney John Danaher said afterward. “Those involved in it should not rest, because we won’t.”
The case went public on May 5, 1999, when firefighters went to Frankel’s Greenwich estate and found a blazing file cabinet and two fireplaces stuffed with burning documents.
Among the papers, authorities said, was a to-do list with “launder money” listed at No. 1. Also discovered was an astrological chart intended to answer the question, “Will I go to prison?”
Four months later, after an international manhunt, Frankel was captured at a hotel in Hamburg, Germany, with nine fake passports and 547 diamonds. He was returned to the United States last year.
A short, skinny figure with thick Woody Allen-ish eyeglasses, Frankel began cultivating his image as a brilliant money manager as he worked out of his parents’ home in Toledo, Ohio. Authorities said he dropped such names as Lee Iacocca and Walter Cronkite to dupe investors across the country.
Frankel was accused of gaining control of small insurance companies in Arkansas, Mississippi, Missouri, Oklahoma and Tennessee and stealing cash from the company reserves. The FBI said he put the money in banks around the world.
He ran the scam from a two-mansion compound in Greenwich that he turned into a warren of offices with more than 80 computers and wide-screen televisions tuned to financial news channels. BMWs and limousines came and went at all hours, and armed bodyguards were posted outside. Floodlights, a 6-foot fence and surveillance cameras made the estate look like a fortress.
Authorities said Frankel spent money on private planes, luxury cars, expensive wines and gifts for women he met through personals ads and other means.
The 6-foot, 135-pound Frankel had a bevy of women living in one of the mansions. Some were former lovers who, once relegated to ex-girlfriend status, stayed on to work at the securities brokerage Frankel ran out of the other mansion.
One woman who was drawn to Frankel through a personal ad, Frances Burge, hanged herself at the compound in 1997 at age 22. Frankel told police he had decided not to have sex with her because she was overweight.
Three others charged in the indictment are awaiting trial: aides Mona Kim and Sonia Howe, and accountant Gary Atnip. Another aide, German national Kaethe Schuchter, is wanted by the FBI.
Emilio Colagiovanni, an Italian monsignor with Vatican connections, is also accused of trying to use his connections to launder stolen insurance company money through a bogus charity Frankel set up. He is charged with fraud and conspiracy and is living with a cousin in Ohio while he awaits trial.
Insurance regulators from several states are seeking more than $600 million in damages from Frankel in civil cases, and have also sued the Vatican, alleging the church was involved in Frankel’s schemes. The Vatican has denied that.
EDITOR’S NOTE — Associated Press writer Donna Tommelleo contributed to this report.
The Frankel File
Some of the players in Martin Frankel’s empire who face federal charges
Martin Frankel, alleged architect of scheme to defraud insurers
– Expected to go to trial on wire fraud, securities fraud, racketeering and other charges
Kaethe Schuchter, Mr. Frankel’s liaison to New York society
– Indicted with Mr. Frankel, but believed to be living in Germany
Karen Timmins, office assistant who met Mr. Frankel through a personal ad
– Pleaded guilty to helping to conceal money-laundering activities
Sonia Schulte Radencovici, former lover who allegedly helped bilk insurers
– Expected to go to trial in October on multiple charges
Gary Atnip, executive in Mr. Frankel’s insurance empire
– Expected to go to trial in October
Mona Kim, office assistant who allegedly helped Frankel buy gold
– Expected to go to trial in October
Robert Guyer, figurehead of Mr. Frankel’s brokerage firm
– Pleaded guilty to securities fraud charges
John Hackney, ran Mr. Frankel’s insurers
– Pleaded guilty to conspiracy and money-laundering charges
David Rosse, Mr. Frankel’s bodyguard
– Pleaded guilty to racketeering conspiracy
John Jordan, lawyer who helped Mr. Frankel
– Pleaded guilty to conspiracy and money laundering
Monsignor Emilio Colagiovanni
– Arrested on complaint accusing him of wire fraud and conspiracy to launder money
Note: Radencovici, Atnip, Kim and Monsignor Colagiovanni have pleaded not guilty. Mr. Frankel pleaded not guilty to the criminal charges in March 2001, shortly after he was extradited from Germany.
Source: The Wall Street Journal.
Copyright © 2003 Dow Jones & Company, Inc. All Rights Reserved.
June 20, 2003
Frankel Accountant
Gets Prison Time
NYSSCPA.org News Staff
NEW HAVEN, Conn. — An accountant who helped financier Martin Frankel carry out a multimillion-dollar insurance scam was ordered Thursday to serve more than 10 years in prison and make $208 million in restitution, The Associated Press reported.
Gary Atnip pleaded guilty in December to federal money laundering and conspiracy charges.
Atnip is scheduled to be sentenced later this month on state charges in Mississippi and Tennessee, where he lives, and also faces civil charges.
Atnip was chief financial officer of several insurance companies owned by Frankel. He admitted helping transfer $200 million from those companies to Frankel, then concealing the moves from government regulators.
Atnip was paid $1 million by Frankel, prosecutors said.
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June 26, 2003
Frankel case accountant
sentenced again
The Associated Press
FRANKLIN, Tenn. —— An accountant was sentenced in state court Wednesday to 10 years in prison after pleading guilty to funneling more than $18 million from an insurance company to former financier Martin Frankel, whose scheme defrauded insurance companies in five states.
Gary Atnip, 51, had already been sentenced to 10 years and one month in federal court in Connecticut.
The sentence imposed Wednesday in Williamson County Circuit Court mirrors the federal term and will be served concurrently. The sentences also require Atnip to serve three years probation and pay a total of $208 million in restitution.
Guidelines require Atnip to serve at least nine years.
Atnip acted as chief financial officer of various insurance companies Frankel acquired from 1991 to 1999, including the Tennessee-based Franklin American Life Insurance Co.
Atnip pleaded guilty in March to two state counts of computer fraud that occurred in November 1991 when he admitted he transferred the money from American Life to another securities company that he knew would be raided by Frankel.
Frankel paid Atnip $1 million for his help with the various companies, federal prosecutors have said.
Atnip didn’t speak in court, and defense attorneys Michael Sheehan and Martin Sziegis declined comment as they left court with Atnip after the hearing. He is currently free on bond. He has been ordered to report to a federal detention facility by July 31 to begin his term.
Atnip has requested his time be served in Montgomery, Ala., or Pensacola, Fla., to be closer to family, although any decision is left to the Federal Bureau of Prisons, Partee said. Federal prosecutors have asked that Atnip be placed in a low-security camp, according to federal sentencing documents.
Atnip also was sentenced Tuesday in Mississippi to the same terms as the federal and Tennessee sentences, prosecutors said. He also has civil charges pending.
He is still awaiting sentencing on 24 federal charges of securities fraud and racketeering.
June 29, 1999
One Man’s Ties Aided a
Scheme To Bilk Insurers
By JOSEPH KAHN AND KURT EICHENWALD (NYT)
Financier Martin R Frankel was aided by Thomas J Corbally, businesssman consultant at Kroll Associates, in orchestrating spectacular insurance fraud that siphoned more than $300 million from insurance companies.
Corbally says he was duped into helping Frankel put veneer of credibility on his business dealings and had no inkling of suspected criminal plans, and pledges to cooperate with FBI and Federal authorities seeking answers about role in connecting Frankel to influential politicians, lawyers, businessmen and Catholic leaders year before insurance empire collapsed.
His ties to powerful people made him valuable contributor to Kroll, well-known private investigative agency usually enlisted by corporate America to scrutinize potential business partners and adversaries, and claims that he was duped has placed the company in an awkward position.
Kroll, retained in 1998 to scrutinize Frankel, quickly found potential problems with his operation. The inquiry apparently failed to uncover role of Corbally, who worked directly with president Jules B Kroll for almost 20 years, earned commissions on business he brought in, and had office at company’s Manhattan headquarters…
©New York Times, 1999
For more, GO TO > > > Kroll, the Conspirator; Marsh & McLennan: The Marsh Birds
# # #
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Last Update October 5, 2006 by The Catbird Seat