Mississippi Trial Date Set in Decade-Old Frankel Case

More than a decade after it was filed, a federal judge in Mississippi has set a tentative trial date in a lawsuit stemming from scams run by a notorious financier who looted $200 million from insurance companies and created a charity that claimed to have Vatican connections to further his scheme and cover his tracks.

Former Mississippi Insurance Commissioner George Dale sued numerous people and entities in 2001 over Martin Frankel’s pyramid scheme that bilked insurers in five states during the 1990s. Insurance regulators in Tennessee, Oklahoma, Arkansas and Kansas joined the lawsuit. In 2002, the Vatican was added as a defendant, but claims against the church were dropped last month.

The lawsuit is tentatively scheduled for trial in April 2013 in Jackson for the remaining defendants, including several Frankel associates. Frankel, who fled the U.S. but was later caught in Germany and pleaded guilty to fraud in 2002, is in jail. He is not a defendant in the lawsuit. His assets, including 21 cars, an airplane and two mansions were auctioned to provide restitution.

The suit has been drawn out in part because the Vatican is recognized as a sovereign state, presenting legal hurdles for the plaintiffs.

Alan Curley, an attorney representing Mississippi authorities, said the plaintiffs stood by the allegations against the Vatican and dropped it from the lawsuit only to avoid an even longer fight over jurisdiction.

A Vatican attorney suggested otherwise. “As shown by the pertinent facts and the insurance commissioners’ decision to dismiss their own case with prejudice, the Holy See had nothing to do with Frankel’s scheme to acquire and loot insurance companies,” Vatican attorney Jeff Lena said in a statement.

Frankel bought small insurance companies in the 1990s, often using third parties to hide his involvement. Mississippi regulators called a hearing in 1999 after becoming suspicious of some of his companies.

Topics Lawsuits Trends Mississippi