BRIDGEPORT, Conn. - Four associates of jailed financier Marty Frankel, a Toledo native, were indicted yesterday on federal charges of helping him defraud seven insurance companies of more than $200 million.
The superseding indictment alleges that Frankel, previously accused of masterminding the fraud, got help from four people, including Sonia Howe, formerly of Toledo and a onetime fiancee of Frankel who worked as his bookkeeper until he fled the country in May.
She is accused of running a trust that allegedly controlled the insurance companies.
Also indicted were John Jordan, counsel to the firms; Gary Atnip, chief financial officer of the companies, and Mona Kim, an employee of Frankel.
Frankel disappeared from his home in Greenwich, Conn., in May, 1999, after regulators began questioning transactions handled through his company, Franklin American Corp.
Authorities said Frankel, who was arrested three months later in Hamburg, Germany, “systematically drained” money from the insurers through a web of companies, offshore charities, and Swiss bank accounts. The new indictment accuses Ms. Howe, 40, of sending bogus monthly statements to the insurance companies.
“These statements falsely represented that the insurance company assets were being profitably invested in government and other securities,” according to U.S. Attorney Stephen C. Robinson.
Ms. Howe, who is charged with racketeering and money laundering, allegedly knew the statements were false because the funds had been stolen and transferred to Frankel's Swiss bank account. She was arrested in Charlotte, N.C..
Frankel, who is serving a three-year prison term in Hamburg for diamond smuggling and possession of false passports, faces no new charges beyond his earlier indictment in October, 1999.
Mr. Jordan, 44, and Mr. Atnip, 49, are charged with racketeering for allegedly helping Frankel control the Thunor Trust, which anonymously owned the insurance companies.
Mr. Jordan of Nashville and Mr. Atnip of Brentwood, Tenn., are charged with concealing from regulators and the insurance companies that Frankel secretly ran a brokerage firm that sheltered insurance assets.
Ms. Kim, 35, is accused of money laundering for allegedly helping Frankel wire-transfer $16 million to buy gold coins.
Six other associates of Frankel have pleaded guilty for their roles in his alleged schemes.
Frankel was convicted in a Hamburg court in June of failing to pay import duties on about $8 million worth of smuggled diamonds and possession of nine false passports.
Assistant U.S. Attorney Kari A. Dooley said Frankel is expected to be extradited by March to New Haven, Conn., to face federal charges.
Frankel also has been named in a federal lawsuit by the states of Mississippi, Arkansas, Missouri, Oklahoma and Tennessee.