The Pretender How Martin Frankel Fooled the Financial World and Led the Feds on One of the Most Publicized Manhunts in History

by Pollock, Ellen

• ISBN13: 9780743204194
• ISBN10: 0743204190
• eBook ISBN(s): 9780743222037
• Edition: Reprint
• Format: Paperback
• Copyright: 2002-10-02
• Publisher: Free Press
• More Book Details
• Purchase Benefits

Summary

This is the unbelievable-but-true account of Martin Frankel -- a timid, two-bit investor with a dark side who pulled off one of the greatest financial scams of the century and led the FBI on a four-month global chase before finally being caught.The Pretenderchronicles how a bumbling thirty-year-old Midwesterner, a lifelong gawky misfit, built an intricate, fraudulent moneymaking scheme that bilked insurance companies out of $200 million. Transforming himself from mama's boy to corporate mogul, Martin Frankel entered a world peopled with desperate businessmen, political power brokers, masterful con artists, vulnerable women, vindictive husbands, and charitable priests -- and spun his web of lies deep inside the power centers of Washington, D.C., New York, and the Vatican. But such success and excess aroused the suspicions of the authorities, and Frankel vanished from his opulent mansion-leaving behind a mysterious fire and some very confused law-enforcement officials-and ran for his life across Europe.

Author Biography

Ellen Joan Pollock is a senior special writer of page one features at The Wall Street Journal, where she has worked for more than twelve years. She has focused on personalities from George W. Bush to Michael Jackson to Ronald Perelman, and spent several years covering the Whitewater scandal. She is also the author of Turks and Brahmins. She lives in New York with her husband and daughter.

Table of Contents

Cast of Characters	ix
Prologue: The Fire	1	(6)
A Real Job	7	(16)
Marty's First Fraud	23	(18)
A Creative Partnership	41	(17)
A Special Trust	58	(13)
Phone Pals	71	(16)
Domestic Bill	87	(26)
Mounting Pressure	113	(12)
Mr. Corbally and Mr. Strauss	125	(11)
Getting Religion	136	(21)
Enter the Consultants	157	(13)
A Credibility Gap	170	(10)
Unmasked in Greenwich	180	(3)
Trouble	183	(14)
Escape Plans	197	(10)
A Summons to Mississippi	207	(13)
On the Road	220	(23)
Betrayal	243	(6)
Epilogue: The Homecoming	249	(6)
Notes	255	(11)
Acknowledgments	266	(3)
Index	269

Excerpts

Prologue: The Fire

It was about seven P.M. on a Tuesday in early May 1999 when George Hannigan's beeper went off as he was pulling into his driveway in Greenwich, Connecticut. The message summoned him to 889 Lake Avenue, in the exclusive "back country" section of the wealthy suburb.

The house at 889 Lake Avenue can't easily be seen from the street. Inspector Hannigan, a fire inspector who was Greenwich's arson expert, had to drive past an apparently unmanned guard hut into a leafy cul-de-sac before he got a good look at the imposing stone mansion. Two fire engines and a police detective had preceded him. The firemen had pried open a sliding door at the back of the house and were already searching for occupants in the heavy smoke that filled its first floor.

They found no one at home. The alarm was still beeping when Hannigan entered, and it seemed as if every five seconds a phone rang somewhere in the house, much of which appeared to have been partitioned into offices. Everywhere were mountains of large plastic garbage bags stuffed with shredded documents. The place looked as if it had been ransacked. In the foyer a dented filing cabinet lay on its side. A table had toppled over and a lamp was on the floor. Scattered about were brand-new suitcases, sales tags still attached, and unused cardboard packing boxes. Three small fires, one in the living room and two in the kitchen, were still burning. The firemen quickly doused them.

The firefighters and police had been summoned by a company monitoring the alarms in the house. When the fire alarm first sounded, an attendant at the command center had phoned the house. A woman answered and explained that although there was some smoke, everything was under control and there was no fire. After some lighthearted conversation back and forth about having to work late, the attendant asked for a password, a routine procedure. Suddenly there was some panicked conversation between the woman and her companion at the house. Apparently they did not have the password. They hastily got off the phone. The alarm company then alerted the police and fire departments, according to standard protocol.

Hannigan had never seen anything quite like the scene at 889 Lake Avenue, but by walking through the house he could pretty much piece together what had happened in the moments before the fire trucks showed up. Clearly, someone had left in a hurry. There was food in the oven, and the oven was still on. The table in the kitchen was set for two, with half-eaten food on the plates.

From the number of plastic bags scattered about, Hannigan judged that whoever was in the house had been shredding for several hours. At least three shredders had been put to work -- not typical office shredders, but elaborate $3,000 German models, the same type used by the FBI, that could shred documents into unusually tiny pieces. Clearly, the people working the shredders had gotten tired of feeding the machines and decided that burning would be more efficient.

They had lit fires in two fireplaces, one in the kitchen and a second in the living room, where wooden stick matches and matchbooks were scattered over the tile floor. Empty cardboard boxes and piles of ash in the fireplaces were evidence that many papers had already been burned. But the people in the house had had trouble burning documents as well. File folders placed on a fire don't burn easily, because there is little room for air to circulate between pages. Hannigan could see that the missing occupants had sought to alleviate that problem by adding shredded documents as an accelerant.

The situation had gotten out of hand, Hannigan concluded, when someone got lazy and dragged a large reclining chair into the kitchen, pulling it too close to the flames, where it was severely scorched. Hannigan found residue from fire extinguishers, and the canisters themselves, on the kitchen and living room floors, proof that the burners had done their best to control the fire themselves.

They clearly had not yet finished their work, for near the fireplace was a box of papers waiting to be burned. Among a large number of financial documents was a mutual fund magazine, another magazine with the cover line "Playing the Spy Game: Banks, Bankers and Insurance Learn to Use Computer Intelligence," and a book,Great Sex,by Alexandra Penney, the author ofHow to Make Love to a ManandHow to Keep Your Man Monogamous.

Most curious, Hannigan thought, was a fire set in a file drawer lying in the middle of the kitchen floor. The people burning papers must have panicked after the alarm sounded, he decided. They had simply set alight some of the remaining documents where they were, and fled. Taking a closer look, Hannigan found that many of the documents in the drawer were burned around the edges but not completely destroyed. His first reaction was pride in his firefighters, who had been trained not to use more water than necessary on possible evidence. But when he looked at the business names and addresses on the papers, he grew suspicious. The addresses, he saw, were in residential areas and couldn't possibly be right. The names of some of the firms and investment funds listed were a little screwy, too, as if the companies had been given names resembling those of better-known institutions. To Hannigan, it just didn't add up.

He took a close look at a printer that was connected to the phone system and had spewed out the names of people called from the house. Hannigan recognized some of the names: financial firms; people he knew from high school who had gone to work in the business world. He had only been on the scene for a few minutes, but he suspected that the crime in this strange house was not arson but fraud, a big fraud.

Turning to Detective Steve Carlo of the Greenwich Police Department, he said, "You need help." Carlo responded that someone was on his way to do fingerprinting. That, Hannigan knew, wasn't going to be enough.

"You've got to call your boss, you need to call your chief, the FBI, the ATF, and probably the SEC and the NBA and the NFL," Hannigan replied. "Anything with three initials in it, you call them."

"Why?" asked Carlo.

"Because I'm telling you, this is the biggest case you're ever going to work on in your life," Hannigan said.

• • •

By the next day, the Greenwich police had a search warrant and cops swarmed into the house, gathering evidence of a crime they still couldn't identify. They discovered security cameras everywhere. Some had even been focused to spy on whoever was working in the offices. There were push-button locks on some doors, and thumbprint locks on others. While combing through the garbage, one detective found a receipt for sophisticated night-vision equipment.

In the basement was a setup that seemed to belong in an office building, with more than fifty computer hard drives and a complex phone system -- hardly a typical Greenwich home office. Computer servers were linked to a T-1 fiber optic line and several satellite dishes on the back lawn. Some twenty-five computers were wired to receive up-to-the minute market data. Much of the equipment in the basement was connected with a trading room in what had been the living room. There, towers of computers were set up around a large swivel chair and desk. To the right was one of the many phones, which rang incessantly for several days. Every time police personnel answered one, there was silence on the other end of the line.

Two detectives peeked into a bedroom, where they found a stash of condoms and a brochure from a hospital or clinic with instructions about how to treat herpes. In another they discovered pornographic magazines and dildos scattered across the floor, as well as other sex toys whose purpose the detectives didn't know.

Upstairs, the master bedroom had been carefully emptied, but the detectives noted that five-inch rings had been sunk into the bed's wooden frame. They obviously were meant for tying up people.

The detectives busied themselves outside as well. They interviewed a woman who had peered across the fence from next door. She had extremely short red hair, multiple body piercings, and a large tattoo of a spiderweb. She explained that she rented her house from Sundew International, which also owed 889 Lake Avenue. The next day, a moving van pulled up to her house and she vanished.

Two detectives cut open the lock on a shed, expecting to find lawn mowers and gardening equipment. Inside were even more boxes of financial documents. And there were yet more in the three-car garage, which had been converted into offices as well.

The house appeared to be the headquarters of a massive securities trading operation, but the police couldn't figure out why its occupants had fled so suddenly. Still, some of the documents hinted that something puzzling was amiss. The investigators found information about the extradition policies of several countries, including Brazil, and a survey of anonymous banking practices abroad.

One charred document was a "to do" list. Number 1: "Launder money." Number 2: "Get $ to Israel, get it back in." And then there were astrological charts, set up to answer these questions:

1) Will I go to prison?

2) Will Tom turn me in?

3) Should I leave?

4) Should I wire money back from overseas?

5) Will I be safe?

The charts offered no obvious replies, and two days after the fire, the FBI was summoned to try to come up with the answers.

Copyright © 2002 by Ellen Joan Pollock

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Excerpted from The Pretender: How Martin Frankel Fooled the Financial World and Led the Feds on One of the Most Publicized Manhunts in History by Ellen Joan Pollock
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