Frankel Plea-Bargains As Five Commissioners Sue Vatican For Fraud
Jailed financier Martin Frankel entered a guilty plea May 15 on charges that he embezzled money from seven life insurance companies he owned in five different states.
The plea came just days after insurance commissioners in those states sued the Vatican and others in Federal court in Mississippi for allegedly helping Frankel defraud state officials and bring those companies to financial ruin.
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Frankel, standing before Senior Judge Ellen Bree Burns in federal court in New Haven, pled guilty to one count each of securities fraud, racketeering and racketeering conspiracy and to 20 counts of wire fraud in bleeding more than $200 million from the seven companies, says John A. Danaher III, U.S. Attorney for Connecticut.
Frankel admitted he controlled a racketeering business to gain control of the cash reserves of the companies, which he then shifted to a brokerage firm. Frankel “and others” then stole those assets, Danaher says.
Danaher says the federal investigation is continuing. Seven of his former associates have previously entered guilty pleas for their part in the fraud, he notes.
On May 9, insurance commissioners of Mississippi, Missouri, Tennessee, Arkansas and Oklahoma filed suit in the U.S. District Court for the southern district of Mississippi, charging that church officials in Rome were involved in an elaborate scheme run by Frankel that looted the seven companies.
By law, each of the states must cover any insurance claims through state guaranty funds that bankrupted companies are unable to pay for residents in their states. In a statement, Mississippi Insurance Commissioner George Dale said it was his duty to pursue recovery from any persons or entities that contributed to the insolvency of the seven insurers.
“The law charges me to recover for the stolen money that ultimately may have to be paid by the taxpayers,” he said.
The commissioners suit also names Thomas Corbally, a New York consultant; a former Vatican official, Msgr. Emilio Colagiovanni; a church foundation, Monitor Ecclesiasticus; and several former associates of Frankel.