Scam artist leaves trail of aliases
By Todd Lewan, AP National Writer
He's a man of many names.
On his birth certificate, he is Martin Richard Frankel. This identifies the guy accused of pulling off one of the largest frauds in modern finance, an operator who built a phantom empire by bilking small insurance companies out of at least $215 million.
This fellow disappeared in May. This fellow's name did not. It has appeared in lots of places: police blotters, court papers, IRS affidavits, FBI most-wanted list and more than a few newspaper headlines.
Sometimes it appears at the bottom of a photograph of a man in a button-down white shirt, with pasty cheeks, a half grin, greasy hair parted on the side and slung over a high forehead, squinting eyes barely visible behind the glare of thick, Woody Allen-ish spectacles.
It also appears, in bold lettering, on an arrest warrant, issued by the U.S. District Court of Connecticut, dated May 16.
"YOU ARE HEREBY COMMANDED," it reads, "to arrest Martin Frankel, aka Michael King, aka David Rosse (or "Ross"), aka Eric Stevens, aka Steve Rothschild." The document failed to mention at least two other Frankel aliases: Robert Guyer and Fausto Fausti.
Ted Bitter, a tool-and-die maker who hired Frankel as his broker 14 years ago in Toledo, Ohio, is only surprised that Frankel didn't use more aliases. "He's a pathological liar," Bitter says. "Marty's the kind who likes his own lies so much, he starts believing them."
Frankel also liked to borrow things. Sometimes he borrowed other people's money. Sometimes he borrowed their names. Sometimes he asked nicely. Sometimes he didn't bother to ask.
He was wily, with an imagination fertile enough to dream up a phantom insurance and philanthropic empire that duped investors from California to the Caribbean, from New York City to Vatican City.
Yet he wasn't that imaginative with aliases. Most, if not all, of the names Frankel used belong to people he had met or learned of through acquaintances.
Beginning in the late 1980s, his penchant for deception evolved into a pattern and, finally, into an obsession — an obsession that created, at last count, six Martin Frankels.
STEVE 'MARTY' ROTHSCHILD
No one ever actually saw this Steve Marty Rothschild.
He first appeared around 1987 as a name in Martin Frankel's notebook. Later, he showed up in business correspondence written by Frankel. Finally, he gained his own mailing address:
Steve Marty Rothschild
3415 Stanhope Drive
Toledo, Ohio 43606
No one, in fact, knew that Steve Marty Rothschild existed until a private investigator found an envelope in Frankel's trash. The PI had been hired by Frankel's former boss whose wife took up with Frankel.
The real Stephen Rothschild, a Toledo lawyer, had no clue, either. In 1989, he was hired by a friend, Ted Bitter, to recoup $65,000 Bitter had entrusted to Frankel — a stock investment that had vanished.
"During the course of our investigation," says Rothschild, "we came across some documents that had the name Rothschild on them. We laughed. It was typical of what we'd already learned about Frankel."
Rothschild and Frankel aren't exactly twins. Frankel stands 6 feet tall, weighed 135 pounds, "the kid who didn't fit in at school," his friends said. Rothschild is 5 feet 6 inches tall, 200 pounds, outgoing, assertive.
"I don't think Frankel ever tried to take over the identities of the people whose names he used," says Rothschild. "Now THAT would have been creepy."
ERIC STEVENS
Eric Stevens came into being sometime around 1989, after Frankel began romancing his ex-boss's wife.
This personage was more than just a name on a business envelope: He came across as an experienced bond trader eager to employ a novel and lucrative strategy to improve the returns on insurance company assets.
Eric Stevens didn't dress like a slick broker. He wore faded jeans, thick glasses, T-shirts. His hair was unruly. A Bill Gates run amok.
Working out of the home of Martin Frankel's parents, Stevens set up a bogus trust fund, Thunor Trust, and teamed up in 1991 with John A. Hackney, a Tennessee bank executive, to persuade small Southern insurance companies to wire him money to invest through a company he called Liberty National Securities, Inc.
Though the two wouldn't meet for another eight years, Stevens' soft, nonstop telephone patter about "protecting people's sacred assets" won over Hackney and at least seven insurance firms in five Bible Belt states.
They transferred at least $215 million (insurance regulators say it could have been as much as $350 million) to an impressive sounding address: 82 Wall Street, Dept. 1105, New York, N.Y. 10005.
It was nothing more than Eric Stevens' mail drop.
ROBERT GUYER
Eric Stevens was given a number of brief respites from life between 1991 and 1998. During those breaks, Martin Frankel became Robert Guyer, president of Liberty National Securities.
None of the insurance companies that were wiring huge sums of money to Liberty National bothered to check the Robert Guyer name at the bottom of the company's correspondence.
Or the Robert Guyer signature on a September 1998 contract to handle the insurance companies' portfolios.
And then, in May 1999, a fax arrived at the Michigan office of the real Robert Guyer, the real president of the legitimate Liberty National Securities. Guyer had met Martin Frankel in the 1980s when they had worked at the same brokerage.
The fax, from several of the Southern insurance firms, posed an eye-popping question: Where was the $950 million they had on account at his firm?
John Czarnecki, Guyer's lawyer, says his client had no knowledge Frankel was doing any of these things. "He didn't know what they were talking about."
MICHAEL KING
Michael "Mike" King was born to the life of royalty.
In 1991, he appeared like a tornado in the wealthy New York suburb of Greenwich, Conn., paying cash for two pieces of prime property: a $3 million mansion at 889 Lake Ave. and an adjacent $2.6 million house.
The driveway soon bristled with leased limos, BMWs and Mercedes. Live-in chefs worked around the clock to accommodate his nocturnal, gourmet tastes. Young women from places like Switzerland, Russia, Alaska and Asia traipsed in and out of the Lake Avenue homes at all hours.
King met his ladies by trolling through Internet personals, calling dating services and placing personals ads in the Village Voice. He frequented The Vault, a Manhattan club that caters to sadomasochists. He collected a riding crop, ropes and sadomasochistic literature and pornographic videos.
He turned his estate into a fortress, with armed bodyguards, a 6-foot fence, surveillance cameras and floodlights. Inside, he built a financial whiz kid's Xanadu, complete with 80 trading terminals linked to the New York Stock Exchange, satellite dishes, four computer servers and 25 monitors with sexually explicit messages on screens.
Among King's neighbors the rumors swirled: His guards were carrying satchels of money and grenades. He's going to buy more homes on Lake Avenue and connect them with covered walkways. He's going to replace his windows with bulletproof glass.
DAVID STEVEN ROSSE
David Steven Rosse was not the partying type. He was quite serious about finance. And he was not, like Martin Frankel, a Jew. In fact, he aggressively courted the Roman Catholic Church.
He dazzled church officials by receiving them at his estate, by paying for tickets on the Concorde, by offering them rides on his private jet.
Rosse stacked the shelves of his Lake Avenue library with Catholic literature. He poured over the life of St. Francis of Assisi, renowned for aiding the poor. He told people he watched movies about St. Francis all the time.
He promised to donate $50 million to Catholic charities. When Monsignor Emilio Colagiovanni, who serves on a board that provides legal counsel to Pope John Paul II, flew to New York to meet Rosse, the American millionaire claimed he wanted to set up a charitable foundation inside the Vatican.
After consulting with Monsignor Giovanni Battista Re, the Vatican's third-highest official, Colagiovanni agreed to help Rosse set up a charitable foundation outside the Vatican, according to reports.
In 1998, Rosse did so — in the British Virgin Islands, a corporate tax haven. The charity's name? The St. Francis of Assisi Foundation. Among its list of trustees? Walter Cronkite and Lee Iacocca, whose names were used without permission. Its legal counsel? Washington power broker Robert S. Strauss, former U.S. ambassador to the Soviet Union.
Only Strauss acknowledges participating in "certain transactional matters" for the phantom foundation, according a statement by Ernst & Young, the accounting firm handling the charity's investment. It no longer does so, it added.
Colagiovanni says he had pledged to donate $50,000 from his own foundation to help Rosse. Did he ever send the money? The monsignor isn't telling.
Footnote: Martin Frankel borrowed the name David Steven Rosse from one of his $10,000-a-month bodyguards. The real David Rosse is suing Frankel for "emotional distress" and using his name without consent. Rosse could not be reached, and his lawyer did not return messages left on his answering machine seeking comment.
FAUSTO FAUSTI
Fausto Fausti has a bank account in Switzerland. It's not clear what his nationality is, what color hair he has, what he does for a living, where he goes on vacation.
One thing the IRS knows: Fausti is one rich son-of-a-gun.
In April, a month before firefighters found piles of documents burning in two fireplaces in the ransacked and empty mansion at 889 Lake Avenue, the amount of $3 million was transferred to Fausti's Swiss bank account.
The sender? Martin Frankel, via the People's Bank in Bridgeport, Conn.
Martin Frankel's propensity for using other people's names most certainly damaged quite a few insurance companies, embarrassed the Vatican and left U.S. financial regulators scratching their heads.
It may also have created some inconvenience for the one individual whose name Frankel (the one now on the lam) couldn't possibly have used for an alias: a Greenwich neighbor of Frankel's who has the misfortune of also being named Martin R. Frankel.
— Associated Press Writers Denise Lavoie in Greenwich, Conn., and Jim Fitzgerald in White Plains, N.Y., and Randy Herschaft, an AP investigative researcher in New York, contributed to this story.
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