Frankel Resentenced for Nearly 17 Years for $200M Insurance Fraud

March 27, 2006

A federal judge in New Haven, Conn. ordered Martin Frankel to serve the same sentence he got in 2004 for stealing $200 million from insurance companies, nearly 17 years in a federal prison.

The former financier was ordered resentenced after a Supreme Court ruling last year gave judges more leeway in their use of sentencing guidelines.

During a brief hearing in U.S. District Court, Judge Ellen B. Burns said she saw no reason to alter the sentence.

“It seemed to me, that was the appropriate sentence to impose,” she said.

Frankel, 51, wearing baggy brown prison scrubs and large glasses, stroked a long gray beard that he grew in prison as Burns reread the 200-month sentence. He spoke only briefly, asking Burns to note that he is at risk in prison.

Burns said she would. Defense attorney William Koch elaborated after court, saying the highly publicized case, which inspired two books, made Frankel “particularly vulnerable” to physical assaults in prison.

He will be eligible for release in 2015, according to the U.S. Bureau of Prisons. He was being held last Thursday night at the Wyatt Detention Facility in Central Falls, R.I., and was to be returned to the federal prison in Otisville, N.Y.

Frankel was convicted of taking over and looting insurance companies in Arkansas, Mississippi, Oklahoma, Missouri and Tennessee.

He bought the insurance companies through a trust set up to hide his involvement, since he was barred from securities trading because of a similar scheme he committed years before in Ohio.

He claimed that he was investing the companies’ assets, but instead stole the $200 million to pay for a two-house compound in Greenwich, luxury cars and several girlfriends, some of whom he met through ads for kinky sex.

Prosecutors said Frankel was motivated by greed, sexual desire and a lust for the high life.

Frankel fled the country in May 1999 shortly after a meeting with Mississippi regulators, who questioned his management of several insurance companies.

He was arrested in Germany four months later and pleaded guilty to 24 counts of fraud and racketeering in 2002.

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