Frankel Gets New Attorney for Appeal

Martin Frankel, the fraudulent financier who was sentenced to nearly 17 years in prison for stealing more than $200 million from seven insurance companies in the 1990s, has been appointed a new attorney for his appeal case.

Frankel, now 55 and housed at the Federal Correctional Institution in Big Spring, Texas, pleaded guilty to federal charges of fraud and racketeering in May 2002, and was sentenced to 16 years and eight months in jail in December 2004. Frankel, who's been in prison since being captured while on the lam in Germany in 1999, is scheduled to be released on Sept. 7, 2015, according to federal prison records.

The U.S. Court of Appeals for the Second Circuit ruled Dec. 21 to appoint an attorney, Marsha R. Taubenhaus, to represent Frankel in his ongoing appeal case. This reversed an earlier decision to remove Frankel's court-appointed attorney as a sanction for Frankel's "misconduct," according to the court's decision.

Frankel has already asked that two other court-appointed attorneys be dismissed, and then filed "scandalous allegations" against one of the attorneys, according to the court's decision. "For that reason, this court concluded that Frankel had forfeited his right to a third [court-appointed] attorney," the court of appeals wrote about an earlier decision. However, the court reversed that decision and found that Frankel had not waived his right to an attorney, so reinstated Taubenhaus.

Attempts to reach Taubenhaus were not immediately successful.

Frankel, formerly of Greenwich, Conn., controlled a racketeering enterprise that included Thunor Trust and Liberty National Securities Inc., a brokerage house. Frankel used Thunor Trust to buy insurance companies in the 1990s, then funneled the insurers' assets to Liberty National, where instead of investing the funds, Frankel pocketed at least $200 million, prosecutors said (BestWire, Sept. 6, 2002).

In 1999, then-Mississippi Insurance Commissioner George Dale, who has been credited as the first regulator to discover evidence of Frankel's alleged scheme, questioned why three insurers in the state were using just one brokerage house for all of their investments.

In May 1999, a suspicious fire was discovered at Frankel's home. Soon after, Internal Revenue Service criminal investigation agents and other federal and local law enforcement agencies put together evidence that Frankel had devised the scheme in which more than $200 million had been siphoned from the seven insurance companies. A day before the fire had been set, Frankel fled to Europe, where he spent three months as a fugitive before being arrested by German authorities in Hamburg.

On March 2, 2001, Frankel was extradited from Germany, and the U.S. Attorney's Office in Connecticut, in a multicount indictment, charged him with violations of the Racketeer Influenced and Corrupt Organizations Act, RICO conspiracy, wire fraud and securities fraud. On May 15, 2002, in the United States, Frankel pleaded guilty to the wire fraud, securities fraud and racketeering charges (BestWire, May 16, 2002).

State insurance regulators from Arkansas, Mississippi, Missouri, Oklahoma and Tennessee were appointed by courts to liquidate the insurance companies that Frankel defrauded. The seven companies are: Franklin Protective Life Insurance Co., Family Guaranty Life Insurance Co. and First National Life Insurance Company of America, all in Mississippi; Franklin American Life Insurance Co., Tennessee; International Financial Services Life Insurance Co., Missouri; Farmers & Ranchers Life Insurance Co., Oklahoma; and Old Southwest Life Insurance Co., Arkansas.

Bill Koch, Frankel's defense attorney, had requested a sentence of about 10 years, arguing that Frankel was mentally ill. Frankel is diagnosed with a mental disorder and narcissistic tendencies (BestWire, Dec. 13, 2004).

Sixteen others involved in Frankel's scheme have also been convicted.

Among those convicted was a woman romantically linked with Frankel, Sonia Howe, who pleaded guilty in October 2002 to money laundering and violating federal RICO in connection with the case (BestWire, Oct. 28, 2002). In September 2002, an Italian priest with ties to the Vatican, Emilio Colagiovanni, pleaded guilty to preparing to help Frankel buy at least two insurance companies before regulators stopped the transaction from happening (BestWire, Sept. 6, 2002).

(By Meg Green, senior associate editor, BestWeek: [email protected])