Frankel, Martin - "Fugitive Financier"
THE CON: Martin Frankel snapped up small insurance companies, many of them in states with lax regulation, and pocketed the premiums. The nation’s biggest insurance fraud spanned five states and totaled $208 million.
THE DAMAGE: $208 million
THE OUTCOME: Frankel began his 17-year prison sentence in 2004. He also gave up $88 million on personal assets and led investigators to another $30 million hidden in Swiss bank accounts.
The "Fugitive Financier"
Martin Frankel ran the biggest insurance fraud in U.S. history, snapping up small companies and squeezing every last cent from them. He stole from insurers in five states and, before fleeing the country in 1999, acquired millions through his con. But it was a smoke alarm – set off in a failed attempt to destroy evidence – that alerted authorities to both the scope of his crime and his fugitive status.
Before Frankel was the “fugitive financier,” he ran Franklin American Life Insurance from his grand, 4-acre estate in Greenwich, Connecticut. He bought up small insurance companies, mostly in Southern states with limited regulation, and squirreled the premiums away in a Swiss bank account. Among the many partners in his con – 16 of whom were convicted – was a former Roman Catholic Church official in Italy who pretended the scheme was a charity endorsed by the Vatican.
Later, Frankel claimed it was philanthropic impulses – a deep desire to fight world hunger – that drove him. But his opulent lifestyle told another story, from a collection of 30 black Mercedes and BMWs to closets filled with the sable fur coats he bought for girlfriends.
Whatever his reasons for seeking wealth, Frankel knew when to cut his losses and leave town. In 1999, when regulators in Mississippi started to get suspicious, he disappeared. As a last precaution, he asked an assistant to destroy any evidence of the fraud. But that job was never completed; a smoke alarm brought the fire department to his mansion. When firefighters saw the plastic bags filled with shredded documents, they called in detectives. The investigation turned up a wealth of damning evidence, including a to-do list that Frankel wrote of the tasks he needed to complete – from “Launder money” to “Get $ to Israel, get it back in.” Frankel also consulted the stars for clues to his fate; among the charred documents, there was an astrological chart with a pointed question: “Will I go to prison?”
It took just four months for investigators to track Franke l to a motel room in Hamburg, Germany, where he was found with nine fake passports and hundreds of diamonds. While imprisoned, Frankel attempted to saw through the bars in the window of his cell. In a bid to avoid extradition, he argued that his human rights were in jeopardy because life behind bars in prison amounted to a death sentence. Unmoved, the German authorities handed him over to U.S. marshals.
Frankel gave up $88 million in personal assets and led investigators to $30 million more in Swiss bank accounts. Regulators in the states where he operated his fraud sued him for $600 million. In 2004, Frankel began a 17-year prison sentence.