State gets $2.5M piece of funds seizure in fraud case
State gets $2.5M piece of funds seizure in fraud case

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By Don Mecoy

Published: January 19, 2008

Oklahoma will receive $2.5 million from the $72 million in assets federal authorities seized from a convicted swindler who defrauded insurance companies in five states including Oklahoma, state Insurance Commissioner Kim Holland said Friday.

Martin Frankel defrauded seven insurance companies of more than $200 million then fled the United States in 1999. Frankel spent four months on the run before his arrest in Germany. Upon his return, he pleaded guilty to stealing from insurance companies in Arkansas, Mississippi, Missouri, Oklahoma and Tennessee.

Insurance commissioners from those five states sued Frankel in 2000 for more than $600 million.

Those states also filed suit in 2002 against the Vatican for more than $200 million for its alleged role in Frankel's scheme.

In Oklahoma, Frankel took about $4 million from the Farmers and Ranchers Life Insurance Co. The state's portion of the seized assets corresponded with the percentage of the total amount stolen by Frankel.

Frankel pleaded guilty to insurance fraud, racketeering, and money laundering and has been sentenced to nearly 17 years in federal prison.

The Internal Revenue Service and FBI seized and sold Frankel's assets, and the resulting funds were placed in forfeiture accounts.

The funds were recently ordered to be turned over to the receivers of the insolvent insurance companies.

With the $2.5 million received from the forfeiture, the state has recovered more than $3.8 million of the funds taken in the Frankel case.

"This case demonstrates our commitment to work collaboratively with other states and federal authorities in the pursuit of criminal enterprises,” Holland said.

Holland directs a 12-person Anti-Fraud Unit that investigates insurance fraud statewide. The Oklahoma Insurance Department also leads the Federal and International Enforcement Coordination Working Group of the National Association of Insurance Commissioners.

Related Topics: Trials, Criminal Trials