Martin Frenkel's case


When Hamburg police officers broke into a local hotel in search of a world-famous fraudster, their attention fell on red-haired Cindy Alison, while 44-year-old Martin Frankel, a skinny and nondescript person, somewhat reminiscent of Woody Allen, did not interest them in the least. ...

Meanwhile, it was this man who was the author and performer of one of the largest and most sophisticated scams in US history. In his briefcase, they found cash for 250 thousand and another 2 million diamonds. But what is this compared to the 200 million he was accused of stealing?

Martin was born in 1954 in the town of Toledo, Illinois. His father was a respected judge. The child himself showed his talents at school, only now he had a very real phobia for tests, which prevented him from graduating from college. After completing his studies, Frankel decided to become a financier, and he learned about the stock market business from publications in the business press. On those around him, Martin made the impression of an experienced analyst for whom there were no secrets about market fluctuations.

Only his uncertainty did not allow him to make any deal himself. Perhaps the hypnosis treatment soon bore fruit, because it is difficult to consider an indecisive swindler who cranked up a fraud for two hundred million dollars. An interesting detail - Martin admired Robert Vesco, the legendary swindler, instead of rescuing an investment fund that siphoned the last juice out of him, and then hid for a long time.

In 1986, Frankel organized his own investment fund, which attracted about a million. The swindler easily entered trust, people saw in him not a fraud, but rather a clumsy financial genius, a shy intellectual. In 1991, the fund collapsed, thanks to the activities of partner Martin, and Frankel was forever banned from trading on the stock market.

However, in 1989, another fund was organized by the swindler in a false name - the Creative Partners Fund. The money raised in the fund made it possible to create their own trust, Thunor Trust, in 1991, which was engaged in the purchase of distressed insurance companies.

In the first of these, about $ 4 million was invested, it ceased to be problematic, and Frankel got access to liquid securities that any organization of this kind had to ensure future payments to clients. Thus, the Franklin company, which turned out to be the first in the list of victims of the fraudster, had 20 million dollars of such reserves.

The funds were used to pay depositors to investment firm Creative Partners and to end its operations, and the remaining funds were used to acquire new insurance companies. Seven years of successful activity led to the fact that in 1998 the prosperous First National Life Insurance company with assets of 100 million was acquired for 48 million. As a result, the sum of all assets of the Frankel trust at that time reached 434 million.

But this was not enough for Martin, he decided to expand his empire by attracting the Catholic Church itself as patrons. The fraudster believed that no one would suspect a charitable foundation under the auspices of the Vatican for fraud. Frankel made acquaintance with prominent religious figures, to whom he also announced his desire to donate 50 million to the church.

As a result, a charitable foundation named after Francis of Assisi was created in the Virgin Islands, through which the fraudster laundered money. In 1999, the supervisory authorities became interested in the activities of insurance companies, from the account to whose account money was constantly transferred, soon a suspicious picture of what was happening was revealed. Immediately it became known about the unseemly role of the foundation with a religious signboard.

While the government was restoring the full picture of the scam and the destroyed papers, Frankel fled to Europe with two girlfriends, where he was arrested in 1999. There he received three years in prison and a fine for a fake passport and diamond smuggling and fully agreed with the sentence, fearing extradition to his homeland. All seven insurance companies that Frankel acquired were, of course, bankrupt.

The fraudster was extradited to the United States, where he pleaded guilty to 24 counts. Monsignor Colagiovanni, the former head of Francis' foundation, was also arrested, and he and the Vatican were charged with financial crimes. A civil lawsuit was also filed against the Swiss bank SCS Alliance, which funneled the money into Frankel's offshore accounts.

A special investigation by the Accounts Chamber of the US Congress placed the main responsibility for the incident on the bodies of individual states, which were supposed to regulate insurance activities, and in front of which Frankel worked openly for several years. The scam, according to the auditors, went so far not only because of Frankel's talents, but also because of the indecision and inaction of the relevant government agencies.


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