Swindler sent to Connecticut residential program for ex-cons

AP News
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Posted: Oct 01, 2015 5:56 PM

NEW HAVEN, Conn. (AP) — Insurance swindler and former international fugitive Martin Frankel on Thursday was ordered into a residential program for ex-convicts, his second stop since being released from federal prison last month.

Frankel was sentenced in 2004 to 17 years behind bars for devising a plot to cheat insurance companies out of $200 million to pay for a luxurious lifestyle that included a mansion in Greenwich, fancy cars and diamonds the size of nickels.

He was released to a halfway house in Massachusetts last month but was sent back to prison after authorities say he violated the rules at that home.

During a hearing Thursday in U.S. District Court, Frankel agreed to spend the next six months in a military-style program in Hartford run by the Salvation Army. "They are wonderful people," Frankel told Judge Janet C. Hall.

Public defender Tracy Hayes said Frankel viewed the Massachusetts halfway house as "almost another jail" because it had bars on the windows and that is what led to his problems there.

Frankel was sent to prison for defrauding insurance companies that he purchased in several states through a trust set up to hide his involvement, since he had been barred from securities trading because of a similar scheme he committed years before in Ohio.

Each month, Frankel and his associates drew up phony statements showing company investments paying off. He set up a bogus Roman Catholic charity, the Saint Francis of Assisi Foundation, to own the insurance companies.

In 1999, he set off an international manhunt when he disappeared from his Connecticut mansion. He was arrested in Germany four months later. He pleaded guilty to 24 federal charges of fraud and racketeering, and cooperated with authorities in prosecuting other defendants in the case.

Prosecutors said he was motivated by greed, sexual desire and a lust for the high life. His lawyers said he was mentally ill.

The scheme left a trail of victims, including policyholders, the insurance companies, their employees and the public because fraud drives up premiums, officials said.

Frankel remains under a court order to pay more than $200 million in restitution. Authorities recovered some of the money, in part by auctioning hundreds of diamonds Frankel obtained with the ill-gotten gains.

Frankel was one of 17 defendants in the case.