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Thursday, 16 May, 2002, 10:42 GMT 11:42 UK
Guilty plea from $200m fraudster
Martin Frankel in court in New Haven, Connecticut
Frankel: siphoned $200m from firms in five states
A former financier who swindled insurance companies in five American states out of more than $200m before going on the run is pleading guilty to 24 federal charges including racketeering, securities fraud and conspiracy.

Martin Frankel, 47, could face a sentence of 150 years in jail and $6.5m in fines, though prosecutors have said they will back a lower penalty if he helps recover some of the stolen funds.

Martin Frankel
Frankel in detention in Hamburg in 2000
Frankel used the proceeds of one of the biggest frauds in American history to fund a life of luxury, including the purchase of big houses, expensive cars, vintage wines and presents for women.

Appearing pale and gaunt at his trial, and answering questions quietly and politely, Frankel's lawyer Jeremiah Donovan called him "a very contrite man".

Decade of crime

The court case marks the culmination of an investigation that began when incriminating documents were discovered after a fire in Frankel's home - including a handwritten list of tasks beginning with "launder money".

Frankel then escaped, sparking a four-month international manhunt until he was finally arrested by German police in September 1999 carrying nine passports and 547 diamonds. He was finally extradited back to the US in March 2001.

Jeremiah Donovan and his wife
Frankel is "a very contrite man", says his lawyer
That finally brought the end to a career in crime more than a decade old.

Despite being banned for life from securities trading in 1992 - after complaints that $1m had disappeared from a fund he managed - Frankel was able to set up Liberty National Securities, an unlicensed brokerage.

'Ton of evidence'

Over the next few years, his company gained controlling stakes in insurance firms in Arkansas, Mississippi, Missouri, Oklahoma and Tennessee and quietly milked their reserves of $208m.

Criminal streak
1989: Frankel begins insurance racketeering venture
1992: Banned from securities trading
Sets up unlicensed brokerage
May 1999: Fire in Frankel's home alerts authorities to his crimes
Frankel flees, sparking a manhunt.
Sept 1999: Arrested in Hamburg, Germany; subsequently jailed
March 2001: Extradited to US on 36 counts of corruption
May 2002: Charged on 24 counts; pleads guilty

He ran the operation from Connecticut, the state in which this federal trial is being conducted.

Mr Donovan admitted there was "a real ton of evidence" against Frankel.

"I sure hope he's a free man one day," he said.

Sentencing for the federal case is set for next year. Meanwhile, Frankel is expected to be taken Tennessee and Mississippi later this year to face the charges in those states.

So far, about $70m worth of cash, property and assets owned by Frankel has been recovered - $30m in a Swiss bank account that Frankel told authorities about.

See also:

02 Mar 01 | Business
'$3bn man' extradited to US
05 Sep 99 | Americas
FBI catches '$3bn man'
23 Jun 99 | Americas
FBI chases $3bn man
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