Fugitive Financier Indicted on 36 Counts in U.S.

Five months after his disappearance sparked an international manhunt, money manager Martin R. Frankel was charged with stealing more than $200 million from several Southern insurance companies.

A U.S. federal grand jury that was convened in June returned a 36-count indictment Thursday against Frankel, 44, who was captured by German police at Hamburg’s Prem Hotel in September. The charges range from money laundering to racketeering.

Hugh Keefe, who withdrew as Frankel’s U.S. lawyer last week after federal authorities froze all of the fugitive’s assets, said the indictment will make it easier to extradite Frankel.

The indictment--the first against Frankel by the U.S. government--charges him with 20 counts of wire fraud, 13 counts of money laundering and one count each of securities fraud, racketeering and conspiracy.

Each wire fraud charge carries a maximum penalty of five years in prison; each money-laundering charge is punishable by up to 20 years in prison, as are the racketeering and conspiracy charges. The securities fraud charge carries a maximum term of 10 years in prison.

If convicted on all charges, Frankel faces a maximum of 410 years in prison.

The indictment accuses Frankel of running a “racketeering enterprise” that bought up insurance companies. Frankel then allegedly siphoned the insurers’ cash reserves and used them to purchase mansions, cars, diamonds and gold.

Prosecutors claim that from sometime before mid-1991 through May 1999, Frankel and unnamed associates concocted a scheme to defraud insurance companies. The indictment alleges that as part of the scheme, the cash reserves from the insurance companies would be invested with Frankel operating as Liberty National Securities Inc., his unlicensed brokerage.

After he received the assets, Frankel “converted, stole and embezzled the majority of funds for the personal use and benefit of himself and others known and unknown to the grand jury,” according to the indictment.

Frankel disappeared from his fortress-like mansions in Greenwich, Conn., in early May. Days later, firefighters responding to an automatic alarm found the homes littered with smoldering documents and a “to do” list upon which item No. 1 was “Launder money.”

Frankel had been barred from securities trading years earlier. He worked from his compound in the New York City suburb, equipped with numerous television sets, computers and the high-tech tools of international finance.

When it appeared his financial dealings were about to be exposed in early May, investigators say, Frankel fled to Europe with a wad of cash and a cache of diamonds, living first in Italy and later in Germany.

Frankel was arrested in Hamburg, Germany, on Sept. 4. He remains in prison there.

Frankel has said he plans to fight extradition, although his lawyers in the U.S. and Germany have withdrawn from the case, saying Frankel has no money and cannot pay them.

Keefe, Frankel’s former attorney, said Thomas G. Dennis, chief federal public defender in Hartford, was appointed to represent Frankel earlier this week.

Neither Dennis nor Frankel’s new lawyer in Germany, Dirk Meinecke, could be reached for comment.

*

Associated Press and Bloomberg News were used in compiling this report.