Frankel's Fleet of Mercedes, BMWs, Volvos Set for Auction Block
Edison, New Jersey, March 30 (Bloomberg) -- Picture yourself in a black, 1999 Mercedes S600, nestling into a heated leather seat and gunning a 12-cylinder engine with only 8,180 miles.
This luxury car could be yours next week, complete with title and a bit of lore about its original buyer, Martin R. Frankel, the former fugitive financier accused of orchestrating the largest insurance fraud in U.S. history.
Federal authorities seized 33 vehicles bought by Frankel or his companies before he fled his Greenwich, Connecticut mansion in May 1999. Frankel, 46, was arrested in Germany four months later and has been extradited to face a racketeering trial. Now, 21 of his cars and a Harley Davidson motorcycle are ready for the auction block.
``Mr. Frankel liked to live a high lifestyle, and these cars reflect that lifestyle,'' said Stephen Bellingreri, a spokesman for the Internal Revenue Service's Criminal Investigation Division.
Among the vehicles available for purchase next Thursday are three Mercedes S600s, a Mercedes S500, a BMW 540I, and two Volvo S70s. Most are black. All were gleaming today as reporters inspected them in an Edison warehouse owned by EG&G Technical Services, a Germantown, Maryland-based contractor that sells seized assets.
``You might get a deal on these cars, but you won't get a steal,'' said Britney Bartlett, an EG&G spokeswoman. ``We expect to get between $400,000 and $600,000 for the lot.''
If Frankel is convicted, proceeds of the sale will go to the insurance companies he allegedly defrauded. Authorities accuse Frankel of looting $215 million from small insurers in Mississippi, Arkansas, Tennessee, Missouri, and Oklahoma.
Frankel allegedly ran his empire through a financial trust, a brokerage house, and a Catholic charity with ties to the Vatican. Working from his four-acre estate in Greenwich, he allegedly had the help of several girlfriends and other women who benefited from his largesse. Authorities say he bought cars, fur coats, and $16 million in diamonds and gold.
Smoldering Documents
When authorities closed in, Frankel fled on May 5, 1999, and left documents burning in his fireplace and a file cabinet. He hid in Italy and Germany, where he was arrested in a Hamburg hotel with nine fake passports and 547 diamonds. He was convicted on German passport and tax evasion charges, serving half of his three- year term before his extradition in March.
After Frankel fled the U.S., authorities seized about $30 million in cash, gold, diamonds, cars, and other property. The government is selling the cars now, before his trial on charges of racketeering, wire fraud, and securities fraud, because they would depreciate in value, Bellingreri said.
Bellingreri said that Frankel had kept some of the cars for himself and had a worker who maintained them. Government affidavits say that Frankel bought most of the cars for his girlfriends or employees, and that one worker handed out motor- vehicle titles on the day he fled.
That day, the Greenwich Fire Department was called to his mansion and found smoldering papers, including a to-do list that included ``launder money'' among its chores.
Six Convictions
Frankel also left a string of angry state insurance regulators, who are seeking more than $600 million in damages. Six of his associates have already pleaded guilty, and he will go to trial in September in New Haven, Connecticut with four other former co-workers.
A native of Akron, Ohio, Frankel was barred from the securities industry in 1992 after the Securities and Exchange Commission accused him of misusing a fund that invested money from retirees.
Mar/30/2001 13:32 ET
For more stories from Bloomberg News, click here.
(C) Copyright 2001 Bloomberg L.P. |
