Swindler Martin Frankel Gets Another Chance At Hartford's Salvation Army Center

Oct. 02--NEW HAVEN -- Martin Frankel, an insurance swindler who stole $200 million to keep a collection of girlfriends in jewels and furs at his Greenwich estate, will spend the next six months at a residential Salvation Army program in Hartford -- if he keeps a promise to abide by the rules.

As a condition of his release in early August from a 17-year prison sentence, Frankel -- who a psychiatrist once testified "doesn't appreciate how frustrating he is to others" -- was ordered to spend six months in a Massachusetts halfway house. The halfway house operators quickly sent him back to prison for breaking the rules and displaying a generally bad attitude, according to information presented in court.

He got another chance during a hearing Thursday before U.S. District Judge Janet C. Hall. His public defender, probation officer, prosecutor and others agreed to allow him to transition back to society through the Salvation Army's residential program for adults.

Frankel, who wore a yarmulke over long shaggy hair and a beard that hung to his chest, sounded enthusiastic.

"They are wonderful people," he said.

Tracy Hayes, Frankel's public defender, said Frankel's difficulty in Massachusetts apparently grew from his discomfiture over the barred windows and generally jail-like appearance of the halfway house.

"It's almost another jail," Hayes said, "or at least that's how Mr. Frankel viewed it."

Frankel was released in August from federal prison at Fort Dix, N.J., where he ended up after orchestrating one of the country's most notorious insurance frauds in the 1990s.

In a rambling statement at his sentencing in 2004, he asserted that his historic swindle, which destroyed seven insurance companies, began as an attempt to help a former fiancée.

It ended with a global manhunt. As federal lawmen and insurance regulators from around the country closed in on Frankel, he converted $10 million to diamonds, chartered a plane to Rome, and tried to disappear with two of the women friends he recruited to his home through advertisements in alternative publications.

After four months on the run, FBI agents tracked Frankel and his jewels to a posh hotel in Hamburg, Germany. He was apprehended in September 1999.

Frankel was a discredited stockbroker from Toledo when he moved to Greenwich in the mid-1990s and remade himself as the owner of a network of small Southern insurance companies.

The FBI and insurance regulators said he used a variety of aliases and shell corporations to drain millions from 11 small insurance companies he controlled in five southern states. Rather than investing the money in government bonds, as he asserted, the FBI said Frankel stashed it in a Swiss bank and used it to underwrite an extravagant lifestyle.

Frankel spent lavishly on furs, autos and jewels for his female housemates. He paid a large staff of drivers, household helpers and security guards. And he indulged himself: He is said to have discarded bars of soap after a single washing.

The scheme blew up when Mississippi insurance regulators became suspicious of his attempts to use a purported Vatican-connected religious foundation he created to purchase more insurance companies. Seeing regulators close in, Frankel laid plans for an escape, investigators say.

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