Martin R. "Marty" Frankel (born 1954) is an American financial criminal who conducted a series of investment frauds in the late 20th century, causing hundreds of millions of dollars in losses. He was caught in 1999, and in 2004 was sentenced to 200 months in prison based on over $200 million in proven losses to

insurance companies Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to protect ...

he bought then looted their

actuarial reserves In insurance, an actuarial reserve is a reserve set aside for future insurance liabilities. It is generally equal to the actuarial present value of the future cash flows of a contingent event. In the insurance context an actuarial reserve is the ...

; the sentence was reaffirmed in 2006.

Personal life

Marty Frankel was born to Leon and Tilly Frankel in 1954; he was Leon's fourth child and Tilly's second, and was raised as Jewish. He attended the

University of Toledo The University of Toledo (UToledo or UT) is a Public university, public research university in Toledo, Ohio, United States. It is the northernmost campus of the University System of Ohio. The university also operates a Health Science campus, ...

but never graduated.

Career

Frankel used

astrology Astrology is a range of Divination, divinatory practices, recognized as pseudoscientific since the 18th century, that propose that information about human affairs and terrestrial events may be discerned by studying the apparent positions ...

to make financial trading decisions. In addition, he usually could not bring himself to actually make trades, causing trouble for him with the

brokerage firm A broker is a person or entity that arranges transactions between a Purchasing, buyer and a sales, seller. This may be done for a commission (remuneration), commission when the deal is executed. A broker who also acts as a seller or as a buyer b ...

s he worked for. After being fired by his boss John Schulte in 1986, Schulte's wife and brokerage partner, Sonia, left the marriage to join Frankel as his business and life partner. Frankel set up Winthrop Capital using the phony name of James Spencer. He also set up The Frankel Fund with Douglas Maxwell, but remained reluctant to buy or hold his chosen investments. Frankel moved to Florida in 1987, and attracted Palm Beach investors, but the Frankel Fund lost money on trades, and Frankel was using shareholder accounts to pay expenses, including rent, stock-quote services, and personal spending money for himself, his sister, and his mother. By mid-1988, he was also raiding some investor's accounts to cash out other, worried investors who were pulling out their money. He transferred the remaining funds to his personal account and told his remaining investor that the fund had collapsed due to Maxwell's bad trades and embezzlement. Frankel gave the funds to an attorney, but the funds were then turned over to the

Securities and Exchange Commission The United States Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street crash of 1929. Its primary purpose is to enforce laws against market m ...

. Frankel moved back to Toledo and started a new firm, Creative Partners, while the SEC was investigating him, using the name Rothschild International Investments and a

Swiss bank account Banking in Switzerland dates to the early 18th century through Switzerland's merchant trade and over the centuries has grown into a complex and regulated international industry. Banking is seen as very emblematic of Switzerland and the countr ...

to separate Creative Partners from his own name and ongoing investigation. By this time, his former boss's wife, Sonia Schulte, was divorcing. Sonia Schulte set up a brokerage in direct competition with her husband's and directed her clients to Creative Partners; meanwhile, Frankel set up another company, Donar Corporation, which paid for Sonia Schulte's new house, and paid Sonia's divorce and custody lawyers over $300,000 out of the Swiss bank account. After paying a fine and agreeing to be barred from trading by the

in 1992, Frankel used several aliases, including David Rosse. In an attempt to use the

Roman Catholic Church The Catholic Church (), also known as the Roman Catholic Church, is the List of Christian denominations by number of members, largest Christian church, with 1.27 to 1.41 billion baptized Catholics Catholic Church by country, worldwid ...

to discourage questions of legitimacy, Frankel founded the St. Francis of Assisi Foundation in the

British Virgin Islands The British Virgin Islands (BVI), officially the Virgin Islands, are a British Overseas Territories, British Overseas Territory in the Caribbean, to the east of Puerto Rico and the United States Virgin Islands, US Virgin Islands and north-west ...

, with a nominal mission of investing in insurance companies in order to fund hospitals. Among people solicited to join the Foundation board was retired ''

CBS Evening News The ''CBS Evening News'' is the flagship evening News broadcasting#Television, television news program of CBS News, the news division of the CBS television network in the United States. The ''CBS Evening News'' is a daily evening broadcast featu ...

'' anchorman

Walter Cronkite Walter Leland Cronkite Jr. (November 4, 1916 – July 17, 2009) was an American broadcast journalist who served as anchorman for the ''CBS Evening News'' from 1962 to 1981. During the 1960s and 1970s, he was often cited as "the most trust ...

; when he declined to join, his name was used anyway. An official of the

Roman Curia The Roman Curia () comprises the administrative institutions of the Holy See and the central body through which the affairs of the Catholic Church are conducted. The Roman Curia is the institution of which the Roman Pontiff ordinarily makes use ...

Monsignor Monsignor (; ) is a form of address or title for certain members of the clergy in the Catholic Church. Monsignor is the apocopic form of the Italian ''monsignore'', meaning "my lord". "Monsignor" can be abbreviated as Mons.... or Msgr. In some ...

Emilio Colagiovanni, agreed to sign a letter falsely stating that the Foundation received funding from the

Vatican Vatican may refer to: Geography * Vatican City, an independent city-state surrounded by Rome, Italy * Vatican Hill, in Rome, namesake of Vatican City * Ager Vaticanus, an alluvial plain in Rome * Vatican, an unincorporated community in the ...

Arrest and conviction

Frankel fled the United States in May 1999. He went by private plane to

Rome Rome (Italian language, Italian and , ) is the capital city and most populated (municipality) of Italy. It is also the administrative centre of the Lazio Regions of Italy, region and of the Metropolitan City of Rome. A special named with 2, ...

and then to

Hamburg, Germany Hamburg (, ; ), officially the Free and Hanseatic City of Hamburg,. is the List of cities in Germany by population, second-largest city in Germany after Berlin and List of cities in the European Union by population within city limits, 7th-lar ...

, where he was arrested on September 4. He was first tried and sentenced in Germany to three years in jail for passport fraud. He was then extradited to the U.S. in 2001. Monsignor Colagiovanni was arrested in

Cleveland, Ohio Cleveland is a city in the U.S. state of Ohio and the county seat of Cuyahoga County, Ohio, Cuyahoga County. Located along the southern shore of Lake Erie, it is situated across the Canada–United States border, Canada–U.S. maritime border ...

on August 30, 2001. In May 2002, Frankel pleaded guilty to 24 federal counts of

securities fraud Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information.wire fraud Mail fraud and wire fraud are terms used in the United States to describe the use of a physical (e.g., the U.S. Postal Service) or electronic (e.g., a phone, a telegram, a fax, or the Internet) mail system to defraud another, and are U.S. fede ...

, and related

racketeering Racketeering is a type of organized crime in which the perpetrators set up a coercion, coercive, fraud, fraudulent, extortionary, or otherwise illegal coordinated scheme or operation (a "racket") to repeatedly or consistently collect a profit. ...

and

conspiracy A conspiracy, also known as a plot, ploy, or scheme, is a secret plan or agreement between people (called conspirers or conspirators) for an unlawful or harmful purpose, such as murder, treason, or corruption, especially with a political motivat ...

. Fifteen of Frankel's associates, including Colagiovanni, also pleaded guilty to related crimes; Sonia Schulte pleaded guilty to

money laundering Money laundering is the process of illegally concealing the origin of money obtained from illicit activities (often known as dirty money) such as drug trafficking, sex work, terrorism, corruption, and embezzlement, and converting the funds i ...

and racketeering. By the time Frankel was first sentenced in December 2004, sixteen of his accomplices had been convicted. Frankel told the judge that most of his behavior was to earn enough money to provide for Sonia Schulte (by then Sonia Howe) and her two children; after this, the judge asked "So, you stole $209 million in order to take care of the children?" Frankel then explained that he could not end the scheme without it coming apart, and asked the judge to consider that deterrence should not be a factor in his sentencing because "If somebody is mentally ill, you shouldn't punish them because it won't stop other mentally ill people from doing it." Frankel was sentenced to 200 months (16 years 8 months) in federal prison; a state court in Tennessee also sentenced Frankel to 16 years, which was allowed to run concurrently on the condition that he assist officials in recovering lost assets looted from his Tennessee insurance companies. Per the Bureau of Prisons Inmate Locator, Frankel (inmate number 14142-014) was released on October 27, 2016, after serving roughly 12 years of his 17-year sentence. Frankel was initially released from prison to a halfway house in Massachusetts in 2015, but was returned to prison for an additional 6 months for violations of the rules at the halfway house. He was then released to a halfway house in Hartford, CT only to once again be ordered to serve 6 more months for violations at that halfway house. He was then released to a reentry facility in Brooklyn. Several states put Frankel's insurance companies into receivership when it was discovered the companies' primary assets were investments in Frankel's own shell company; among the states affected were Arkansas, Mississippi, Missouri, Oklahoma, Tennessee, and Virginia.

In popular culture

In 2008, the episode " The Martin Frankel Case", of the television series '' American Greed'', covered the fraudulent behavior of Frankel. Also corrupt crimes season 1 episode 34

References

External links

''Booknotes'' interview with Ellen Joan Pollock on ''The Pretender: How Martin Frankel Fooled the Financial World and Led the Feds on One of the Most Publicized Manhunts in History'', April 14, 2002.Court TV Series "MUGSHOTS: Martin Frankel" full video
(45 minutes, air date: 2001) at ''

FilmRise FilmRise is an American media company, headquartered in New York City, that operates a film and television studio and a free ad-supported streaming television (FAST) network. As of November 2024, the FilmRise app has reported more than 31.5 milli ...

'' {{DEFAULTSORT:Frankel, Martin 1954 births American brokers 20th-century American Jews Crimes in Connecticut Crimes in Tennessee Fugitive financiers Living people People from Greenwich, Connecticut People from Palm Beach, Florida Businesspeople from Toledo, Ohio American white-collar criminals Place of birth missing (living people) American people convicted of money laundering American people convicted of fraud American businesspeople convicted of crimes 21st-century American Jews