Frankel gets 3-year German jail term, fine of $1.6 million

9/28/2000

HAMBURG, Germany - A German judge yesterday sentenced fugitive financier Marty Frankel to a $1.6 million fine and three years in prison, which the ex-Toledoan hopes will help him avoid prosecution in the United States for insurance fraud.

The 45-year-old Whitmer High School graduate faces charges in America accusing him of masterminding the biggest insurance fraud in American history.

Yesterday's sentencing clouds U.S. prosecutors' attempts to extradite Frankel to face charges in the United States, because it gives him more time to convince German authorities that if he is sent back, he likely would spend the rest of his life behind bars.

He has claimed that would be tantamount to a death sentence.

"The German constitution clearly states that it can't send a person to a country where he can be executed or have no chance of getting out of prison," a handcuffed, unkempt Frankel said before his sentencing hearing yesterday.

U.S. prosecutors say he looted hundreds of millions of dollars from cash reserves of insurance companies and used the money to pay for a luxury lifestyle of mansions and women he met through personal ads.

With American authorities on his trail in May, 1999, Frankel set fire to incriminating documents in his Connecticut mansion and fled to Europe, prosecutors have alleged.

The skinny, bespectacled financier took with him 500 diamonds worth more than $5 million to finance his life on the run.

After his October arrest at a riverside Hamburg hotel, Frankel was charged with tax evasion for not paying the hefty tariff on the gems.

He also was charged with carrying nine false British and Greek passports.

With yesterday's German sentence, American prosecutors from Connecticut to Oklahoma are gearing up for the fight to extradite Frankel to the United States.

That includes Mississippi, where state officials allege Frankel stole the largest chunk of money: nearly $200 million.

"What I hope with the guilty plea is they'll hurry up and extradite him," said Lee Harrell, a Mississippi assistant attorney general.

"We hope to show him some Southern hospitality," Mr. Harrell added with a sarcastic laugh.

"Our state penitentiary will provide him free room and board."

That invitation may have to wait until his German prison sentence expires.

Ruth Wedgwood, a law professor at Yale University, said most countries traditionally do not extradite criminal defendants once they're serving jail time in those countries.

"Once they're sentenced, in almost every imaginable circumstance, the country is going to want them to serve that sentence," said Ms. Wedgwood, a former assistant U.S. attorney who has significant experience in international extradition.

German prosecutor Hans-Gerd Meine said the extradition process would be delayed until the German case had run its course.

That course of action includes a potentially lengthy appeals process.

U.S. prosecutors are hopeful that German authorities will return Frankel to the United States in the near future.

Before Frankel's surprise guilty plea last week, the Hamburg state government already had approved his extradition to the United States.

"We expect to have him back here," said John Russell, a spokesman for the Justice Department in Washington.

"I don't know when, but that's negotiable . . . between us and the German government."

Representatives from the State Department would not comment yesterday about negotiations for Frankel's return.

Until Frankel is returned to America to face possible conviction and much harsher prison sentences, U.S. prosecutors say they don't expect he'll discuss whether he has any looted cash.

Yesterday's sentence further complicates the financial issue.

Although Frankel's known assets have been frozen, the German court fined Frankel $1.6 million for tax evasion.

To Mr. Harrell of Mississippi that's money that belongs to the insurance companies. He said his state has already hired lawyers in Germany to negotiate the return of Frankel's fine money.

"This is our money, and he shouldn't be forfeiting it," Mr. Harrell said.