Financial Swindler’s Diamonds Sold Off

A cache of 822 diamonds seized from fugitive financier Martin Frankel was sold for nearly $9 million in an auction intended to provide restitution to the victims of his schemes, officials said Thursday.

Hundreds of bidders, including retailers and suitors seeking deals on engagement rings, gathered at the Jacob K. Javits Convention Center in Manhattan for the two-day diamond auction -- the largest ever held by the U.S. Treasury Department.

The largest of the gems, a 15.67-carat round diamond as big around as a nickel, sold for $297,500 to an Internet bidder. The other diamonds were mainly loose stones, with a few rings and one pair of earrings.

Shaun Haacke of San Jose said he paid $3,400 for a .85-carat diamond to give to his fiancee.

“That’s a thousand less than I was willing to pay,” he said. “As soon as it’s set, I’ll propose.”

Prosecutors said Frankel looted more than $200 million from insurance companies that mostly sold funeral policies to the poor.

He was arrested in Germany after disappearing from his Connecticut mansion in 1999, triggering an international manhunt.

Frankel, 50, pleaded guilty to fraud and racketeering in 2002 and will be sentenced today in New Haven, Conn.

His lawyer, Bill Koch, said he would seek a reduced sentence based on Frankel’s mental state and the harsh prison conditions he suffered in Germany.

Frankel, who is Jewish, was housed in the same prison where Jews were executed during World War II, Koch said.

Other Frankel assets have already been auctioned off, including two mansions, 21 cars and SUVs, a Harley-Davidson motorcycle and an airplane.