Friday, May 25, 2018
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Frankel won't give plea in confusing court date

HAMBURG (NYT) - Martin R. Frankel, a Connecticut businessman accused of looting more than $200 million from insurance companies he acquired, made a concerted effort here yesterday to avoid extradition to the United States.

Bearded and wearing a heavy wool overcoat over khaki pants and a wrinkled plaid shirt, Mr. Frankel arrived in handcuffs at a Hamburg courtroom where he faces German charges of using false passports and evading customs duties on about $5 million worth of diamonds.

Mr. Frankel, formerly of Toledo, fled the United States last spring, shortly before his mansion in Greenwich, Conn., was discovered burning and police found smoldering documents indicating fraud. The Federal Bureau of Investigation chased him for the next several months across Europe, narrowly missing him in Rome and finally tracing him to a hotel here.

Acting on a request from the FBI, German police arrested Mr. Frankel in August and have kept him in a local prison.

German officials have approved Mr. Frankel's extradition to the United States, where he faces more than 30 charges of fraud and the possibility of spending the rest of his life behind bars. But they want to prosecute Mr. Frankel on local violations first.

Yesterday, Mr. Frankel made it clear he wants to stay in Germany as long as possible.

"In Germany, it is against the constitution to put people in jail for the rest of their lives," Mr. Frankel said shortly before the proceedings began. "It would obviously be better to stay in Germany."

Mr. Frankel immediately perplexed the presiding judge by refusing to plead guilty or issue any statement in his defense. Then he announced that he needed to call four witnesses - two women who accompanied him to Europe, as well as a friend in New York City and a friend who had helped him in Rome.

After mulling his request, the judge postponed the proceedings until tomorrow morning. He told Mr. Frankel's lawyer, Dirk Meinicke, that he was "astounded" by the defense team's lack of preparation.

Mr. Frankel is a graduate of Whitmer High School and was a stockbroker in Toledo for six years.

Known for staying indoors for weeks at a time and consulting astrology charts before making investments, he left Toledo in 1991 just before he was stripped of his stockbroker's license by the U.S. Securities and Exchange Commission.

The SEC action was taken when Mr. Frankel was sued in federal court in Toledo by two investors who said they were unable to recover more than $360,000 they gave Mr. Frankel to invest.

At the time, Mr. Frankel was operating the business from his ranch home in the Lincolnshire neighborhood of Toledo.

He once sold shares in what he called "The Frankel Fund" and persuaded more than 30 people to invest a total of more than $1 million in the investment pool, records show.

After his court troubles in Toledo, he left town, eventually ending up in Greenwich.

In comparison with the charges Mr. Frankel faces in the United States, the charges against him in Germany are almost technicalities. When the police arrested him last year, they said they found at least eight forged passports.

The police said they found a stash of diamonds, which Mr. Frankel reportedly had brought to finance his stay in Europe. According to the charges presented yesterday, the diamonds were worth nearly $5 million and were liable to a customs duty of about $1 million when they were brought into the country.

In addition to refusing to make any response at all to the charges, Mr. Frankel balked when asked to confirm his full name and place of birth.

Mr. Meinicke argued that his client could not speak in his defense because he feared providing information that could help prosecutors in the United States.

"You have to understand that my client is in an extremely difficult situation," Mr. Meinicke said. "He is facing a sentence of 200 to 400 years in prison, and my client has to consider the effect of statements here on the broader case."

Asked by one of the judges what he wants to demonstrate with his witnesses, Mr. Frankel said he expects them to lie.

"They would have exactly known all the facts," Mr. Frankel said. "I am assuming that they would lie, but at least I could confront them."

In an interview after Mr. Frankel was led back to jail, Mr. Meinicke said he was almost as nonplussed as the two judges on the court. "The problem is with the client," Mr. Meinicke said, "because he keeps changing his mind about what he wants."

The Blade staff contributed to this report.

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